Switching to on-demand TV

Filippo Giachi Vice president Asia-Pacific, Middle East and Africa, DOCOMO Digital

Grand View Research noted how smart TVs’ increased popularity has negatively impacted the cable TV market and the demand for set-top boxes and conventional television platforms around the world. The company estimates that the global value of smart TV sales will expand from $176 billion in 2020 to $292 billion by 2025, for example.

At a local level, telecoms analysts GlobalData estimates that household penetration of Pay-TV subscriptions in Vietnam (mainly cable TV services) will decline from 35.4 per cent in 2020 to 30.3 per cent by 2024. By contrast, internet video streaming subscriptions are expected to expand at a compound annual growth rate (CAGR) of 1.5 per cent over the same period as the nation’s fixed broadband penetration and capacity increases.

Fixed-line network connectivity has improved considerably in recent years, with average download speeds rising 41 per cent to reach almost 61Mbit per second by December, according to Ookla speed tests. The same is true of mobile networks, with cellular download speeds increasing nearly 14 per cent over the previous 12 months to reach 34.5Mbit per second. Industry trade body GSMA estimates that 64 per cent of all mobile connections in Vietnam are either 3G, 4G, or 5G-enabled.

People in Vietnam watch TV and movies on multiple devices. Still, it is the smartphone that is becoming the go-to device for many of its citizens, particularly younger generations. GSMA estimates mobile phone penetration in the country at 158 per cent, while far more of those aged between 16 and 64 (97 per cent) own smartphones than they do laptop or desktop computers (66 per cent) or tablet devices (32 per cent), according to GlobalWebIndex statistics for the third quarter of 2020.

It also estimates that the average time spent using the internet on all devices amongst Vietnamese aged 16-64 is six hours and 47 minutes, which is far longer than they do either watching TV (two hours and 40 minutes) or playing video games on a games console (one hour and 14 minutes).

Again, smartphones look like they play a significant role here, with 95 per cent of the same age group accessing the internet via mobile devices for an average of three hours and 18 minutes every day. That helped push the share of web traffic in Vietnam attributed to mobile phones up by 147 per cent between December 2019 and December 2020. It now represents 40 per cent of the total, whereas internet traffic on laptop and desktop PCs declined 30 per cent to account for 58 per cent last year.

The increasing appetite for downloading and streaming TV and video content via the internet has led to multiple companies launching subscription video on demand services in Vietnam. The most recent market entrant is VieON, a smartphone app developed and launched in June 2020 by the Vietnamese media, entertainment, and technology group DatViet DAC with BCG Digital Ventures’ backing.

VieON joins a long list of local Vietnamese providers offering similar platforms. These include K+, a joint venture between the Vietnam Satellite Digital Television Company and French broadcaster Canal+ that expanded its content delivery to allow its satellite subscribers to stream content onto their smartphones, tablets, and PCs with the launch of its MyK+ service in 2016.

Three of the leading cable TV providers in Vietnam – VTV, VNPT, and SCTV – also developed similar online content stores and streaming apps to address declining revenue from their other services.

Malaysia-headquartered provider iFlix first launched its platform in Vietnam in 2017, with Chinese providers WeTV and iQIYI also offering services. International players are also present, notably Netflix and Amazon Prime, through their comparatively high prices (between $7.70 and $11.20 a month in the case of Netflix) and lack of content customised for Vietnamese language speakers have limited their adoption to date.

Vietnamese telecommunications carrier FTP Telecom introduced FPT Play as early as 2013 before extending its content library with an exclusive partnership deal with US streaming service HBO Go in 2019. Vietnamese telcos Mobifone (MobiTV) and Viettel (Keeng Movies) also offer rival services.

Such is the volume of different OTT video services on offer Statista now forecasts that the value of the subscription video on demand market in Vietnam will expand by 28 per cent to reach $162 million by the end of the year and is expected to grow further at a CAGR of almost 17 per cent to exceed $302 million by 2025.