The cost of the service is $1.42 for local or Hollywood library titles, $2.15 for new releases, or a paid subscription of $4.81 per month.
With a population of 260 million people, Indonesia is a logical market to expand outside of Taiwan, said Daphne Yang, CEO of CatchPlay, which will provide the latest Hollywood movies, as well as local films to subscribers. “It’s the biggest market in Southeast Asia. Also, not just in population, it’s a very vibrant market in terms of social networks,” Yang tells. “It’s the number four Twitter country in the whole world [and] number four in terms of user base on Facebook as well. We think that level of involvement in social networking would definitely help entertainment content consumption. We see a lot of potential in this country.”
Indonesia has seen such online video players coming into the market as Neftlix, Hooq and iFlix in the past six months. “The market’s at a very early stage of development and it’s a land grab – it’s all about driving up consumption and then converting that to payment and using the telecommunications integration and carrier billing model as the way forward for that,” said Vivek Couto, executive director of research and consulting firm Media Partners Asia.
However, there are only 5.5 million fixed broadband users in the country, and the infrastructure is insufficient to provide for the growth of the OTT market, he said. But the number of mobile broadband users will be close to 90 million by the end of 2016, according to Couto. “While Indonesia lags Singapore and Hong Kong and is also trailing Thailand and Malaysia, there is growing investment in next-generation fixed and mobile infrastructure, but progress is slow, especially outside Jakarta,” said Couto.
“There has been an increasing trend of OTT adoption in Indonesia,” says Harsh Upadhyay, analyst at Singapore’s Analysys Mason. “This growth suggests that interest from end users has been high.” But he also highlights that fixed and wireless high-speed coverage “is not entirely available even in big cities of Indonesia.”
CatchPlay thinks the key to entering the Indonesian market is to find the right partner, in their case the telecommunications giant Telkom, which is the top IPTV service provider in Indonesia. Over the past nine months, it has reached 1.6 million subscribers for its IPTV service, explains Yang. As was evident in the blocking of Netflix at the beginning of the year in Indonesia due to content deemed inappropriate by Telkom, the telecommunications giant holds the power in the bargain. Yang said its new service would be provided only to adults who have a password to the Telkom’s Indihome IPTV service.
The Indonesian government has also brought out suggested regulations in the past few months regarding OTT services. Foreign companies should set up permanent business establishments, pay taxes and evaluate joint ventures with local OTT players, they suggest. In the recent draft regulation, the government is also trying to restrict access to certain content and services.
Said Upadhyay: “The regulation also specifically mentions the objective of protecting Indonesian telecom operators, and hence raises important questions around net neutrality and competition. The regulation threatens the openness of the Indonesian OTT market and is likely to discourage international OTT providers from offering services to Indonesians.”
