Even the mighty Netflix, which has been present in the country for the last three years, still only has a wafer-thin slice of what is potentially a massive pie.
As the Vietnam Investment Review noted, the streaming giant’s tiny subscriber base of 300,000 in a country of over 90 million is not down to lack of demand.
Vietnamese viewers love OTT content – nine out of 10 Vietnamese use OTT services on a weekly basis, according to Nielsen – they’re just less keen on paying for it.
The illegal streaming industry is massive in the country and it’s holding back both international giants like Netflix as well as smaller, domestic providers. According to the latest industry data, there were 236 million visitors to illegal streaming sites in just the first half of 2017 – 29 times the number of visitors to legitimate services.
As well as being free, the quality of what is downloaded is exceptionally high, often rivalling the paid-for alternatives.
Plus, there’s a cultural issue with e-payments. Netflix and the like require payments via internationally recognised debit and credit cards, and while 40% of the population hold bank cards, 90% of business in the country is still conducted in cash, according to Banking Vietnam data.
Local OTT players are critical of action by authorities which they say is often half-hearted, leaves illegal sites still capable of being accessed and legitimate sites out of pocket .
“Our calculations show that about 50-60% of Vietnamese consumers access illegal websites, meaning authenticated websites miss out on more than half of the local consumers,” said Vu Anh Tu, executive vice president of FPT Telecom JSC, which owns the legitimate streaming service FPT Play.
Recognising this, many players like Keeng and Onme (backed by Viettel Group) or VTV Go (backed by Vietnam Television), and the five-year-old FPT Play (FPT Group), are not giving up. They see that once the illegal sector is curtailed, competition in the legitimate sector is likely to be fierce.
“To maintain FPT Play’s income, we currently run both advertisements and charge user fees,” Tu said.
“However, once local authorities tighten copyright management, there will be huge opportunities for FPT Play and similar services to develop. At the time, we will no longer depend on advertising income and people will be more likely to opt for non-cash transactions.”
Sourced from Vietnam Investment review; additional content by WARC staff