You know HOOQ? We don't either. But it's bringing the Asia Pacific OTT fight to Netflix
U.S. network giant hasn't even ARRIVED yet
Analysis Netflix is used to local spoilers blocking its international expansion as it enters new markets - in Canada it had to face off with Crave TV, in the Nordics it battled with ViaPlay and HBO Go and in the UK it came up against Sky’s Now TV. But in Asia, it faces perhaps its most formidable obstacle yet in HOOQ.
HOOQ was first announced on 30 January 2015 by Singapore-based regional telco SingTel in partnership with Sony and Warner Bros as a pre-emptive strike against Netflix before it arrives, and has just launched its inaugural service in the Philippines. India, Indonesia and Thailand are set to follow this month, ahead of SingTel’s domestic Singapore market, where it is the dominant telco.
But it will be in Australia where Netflix and HOOQ first lock horns directly. Netflix itself has earmarked 24 March as its launch date in Australia and New Zealand, while HOOQ plans to enter soon after.
HOOQ aims to optimise quality of service (QoS) by delivering just over networks owned by SingTel or its partners. This leaves Netflix with the advantage of not being tethered to any telco - and so free in principle to run over any access network, although it may initially concede something to HOOQ in quality of experience, at least until it builds out its own content delivery network (CDN) or makes suitable arrangements with third-party CDNs as well as local telcos, to ensure end-to-end QoS.
This is not so much an issue in North America and Europe and probably not in Singapore either, but could prove to be in other Asian markets, including India, where broadband coverage is still patchy and often unreliable. This factor contributed to disappointing take up for Netflix in Latin America and especially Brazil, where only 20 per cent of internet subscribers enjoy access speeds over 500 Kbps at the time of the launch.
In Australia we are looking at a fairly straight match-up, although the outcome may not entirely be replicated in the Asian markets where content tastes are different. Ironically Netflix could benefit from the piracy that is rife in the region, since this has enabled it to gain substantial brand recognition for its iconic series House of Cards and Orange is the New Black, which arguably have proved the most influential series in the history of pay TV, at least matching the impact of The Sopranos and Sex and the City for HBO. In fact, Netflix CEO Reed Hastings regularly describes his company as the HBO of the internet.
This highlights how content has become a kingmaker for Netflix and it was the great success of these series that rekindled its global expansion after a year lying fallow in 2013, following its launch in the UK and Ireland at the start of that year.
This content factor will ensure that Netflix succeeds in becoming a major player in the Far East, even if it concedes early mover advantage to HOOQ. But the latter is also coming in with a strong content play through having Sony and Warner Bros on board. At launch, HOOQ is offering 10,000 movies and TV shows from those two partners, including films like Spider-Man and Harry Potter, as well as popular TV shows like Friends and Gossip Girl. It is complementing this with a fairly extensive library of Indian, Chinese, Thai, Filipino, Indonesian, Korean, and Japanese content, which will be crucial for competitiveness in these respective markets.