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Singapore-based video-on-demand (VOD) service Hooq raised an additional $25 million from its three founders—Singapore based telecom Singtel, Sony Pictures and Warner Brothers. The new funding was reported by TechCrunch, which cited a Singtel stock exchange filing detailing the investment. (Singtel is Hooq's majority stake owner, with 65% of the service.)
The $25 million came on top of $70 million already secured by Hooq, and sets the service up for an ongoing battle in the increasingly crowded VOD vertical in Southeast Asia.
Services like Hooq need deep pockets because they must take a long-term view of the market. Many Southeast Asia markets still lack widespread access to fast broadband and have data plans that are often too expensive for many consumers to use on streaming video.
Still, the potential for the VOD market in Asia-Pacific is massive. eMarketer estimates that there will be 1.10 billion digital video viewers in the region this year, and expects that figure to grow to 1.33 billion by 2020.
Hooq is already facing off with several other local over-the-top VOD services in the region, among them iflix, Viu and Tribe. But Hooq made it to many Southeast Asia markets early, having launched in India, Indonesia, Thailand and the Philippines in 2015. It added Singapore to its roster in November 2016.
But Hooq still has to figure out how to compete with US-based behemoths Netflix, which launched in several Southeast Asia markets in January 2016 as part of a global push, and Amazon, which expanded its Amazon Prime Video service to more than 200 countries in December 2016.
Right now, homegrown players have attempted to differentiate from US-based companies by offering more localized content. But that advantage may dissipate as Amazon and Netflix increasingly license local content or partner with native production companies as they have done in India.
Local companies like Hooq may be better at navigating the strict censorship rules imposed on online content by some governments in Southeast Asia. Netflix learned a lesson about censorship in the region the hard way after Indonesia's largest internet service provider, Telekomunikasi Indonesia, blocked its service in the country in early 2016, reportedly at the behest of government officials.
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