Three multi-country SVOD plays - Hooq, Iflix and most recently freemium offering Viu – have launched out of Asia this year, opening another flank in the battle against online piracy.

Setting up legal services while distribution and payment networks are still taking shape, however, is proving to be hard work, hindering traction for businesses that need scale for long-term prosperity.

The team at Iflix is already far wiser for the multiple mistakes they have made since launching as a service just over 20 weeks ago, noted CEO Mark Britt (pictured), speaking in Hong Kong at last week’s Casbaa conference.

Based on his experience of how formidable piracy can be, one thing Britt would change, if he could, would be earlier market entry.

“It is fundamentally understanding just how challenging it is, and secondly, fundamentally understanding just how compelling piracy is as a customer proposition and, collectively in Asia, the lack of co-ordination we have,” Britt told delegates at Casbaa.

“What we would have done is start two years ago, and collectively start the piracy battle then, to make broadband a legal valuable lucrative business for all of us.”

Asia’s emergent SVOD sector, including local operators also with an eye on international expansion, have to contend with some sizable barriers on the road to growth, but some are tricker to address than others.

External obstacles around payment and bandwidth, for example, should resolve themselves in time, while SVOD providers can adopt workarounds in the meantime.

This week, Iflix will start offering cash on delivery in Malaysia, collected by motorbike couriers each month, in the hope that these customers will upgrade to a regular subscription.

“It’s hard, but solvable,” Britt said.

Business barriers

A bigger internal challenge, the panelists concurred, is coming up with sustainable business models that offer desirable programming at an affordable price for mass audiences in India and Southeast Asia.

“The bandwidth problem will be solved, in some cases faster than we ourselves can sort out great product, great customer experience, great payment channels,” said Peter Bithos, CEO of Hooq, which made its regional debut in February.

“I don’t think we need to worry about bandwidth,” added Bithos, former COO with Globe, the second-biggest telecoms company in the Philippines.

“If we fix our part, the telcos are going to fix their part,” he suggested, also speaking at Casbaa.

“They have to – it is essential for them versus their competitors, and it is changing so fast.”

The answer is focus, Bithos contended, arguing that SVOD companies in Asia must first get the fundamentals in place if they want to persuade people that OTT content is worth paying for, rather than trying to win consumers over with different packages and tiers

“It is complex enough to get the customer to understand how a service is better than piracy, better than zero…” he remarked.

“Maybe down the road three to five years from now, but I think we’ve got much bigger challenges, to just give the customers the tools in their hands.”

Both players face meanwhile face another layer of competition from Viu, a new freemium service recently unveiled by Hong Kong telco PCCW.

While Viu will operate primarily as a paid service in more developed markets, kitted out with various features, it will roll out as a simpler, mainly ad supported service in growth markets.

Viu, which made its debut in Hong Kong last week with an eight-hour window for select Korean dramas, is scheduled to launch in Singapore before the end of the year, ahead of a rollout across Southeast Asia in Q1 next year.

“It will vary by market which part is free, which part is premium…,” said Janice Lee, MD of PCCW Media, speaking at Casbaa on a separate session.

“If you look at a market like Indonesia, the subscription habit is building but you can’t ignore the increasing spend on advertising as the middle class grows, and as more products and consumer services want to access that growing base.”