Video Streaming Revenue Set to Soar in High-spending Singapore

Filippo Giachi, VP – Asia, Middle East & Africa

Singapore, one of the most developed economies in South East Asia if not the world, served by mature, modern telecommunications infrastructure that drives a thriving video streaming and online entertainment community.

Almost all of the territory’s 5.8m citizens (88%) use the Internet, with 92% doing so using their smartphones which they engage with for an average of three hours a day. Indeed, at 147% of its population, Singapore has one of the highest penetration of mobile phone connections on the planet.

While the smartphone represents their go-to device, Singaporeans are also more likely to own laptops or desktop computers (78%), tablets (47%), smartwatches or wristbands (25%), streaming TV devices (16%) and games consoles (21%) than any other country in South East Asia.

The territory has some of the best fixed, and mobile broadband infrastructure in the world squeezed into its 280 square miles, where the majority of the population live in apartment blocks whose proximity is well served by mobile network operators. Ookla’s speed tests conducted in January 2020 calculated the average speed of a cellular internet connection at 57mbps, with fixed Internet connections over a predominantly fibre optic networks averaging 200mbps.

Advancements in 5G Mobile Networks Underway

What’s more, MNOs in Singapore have been mandated to cover at least 50% of the city-state with a standalone 5G network by the end of 2022 according to Infocomm Media Development Authority (IMDA) and are already well advanced in their trials. The country’s telecoms regulator is currently awaiting feedback on wireless spectrum allocation proposals with a view to awarding licenses to SingTel, TPG Telecom and a joint venture between Starhub and M1 by mid-2020, at which point their respective roll-outs can commence.

Those 5G mobile networks will deliver greater reliability, faster download speeds and lower latencies which are better suited to video streaming, virtual (VR) and augmented reality (AR) and gaming applications for Singapore’s citizens, as well as fixed wireless access connectivity to rival fibre broadband links in bandwidth and performance. PwC believes that the advent of 5G will expedite the trend towards content personalisation in Singapore, making it more convenient and cheaper to access video content on smartphones and other mobile devices.

Towards a Mobile-first Video Streaming Generation

Smartphones are already the default device for Internet browsing in the country, however, with 57% of web pages served to mobile phones in 2019 (up 26% year on year), compared to 39% for laptops and desktop PCs, which declined 20%. Additionally, those in the 16-64 age category spend an average of almost seven hours a day accessing the Internet from those devices according to GlobalWebIndexi, far more than spend time watching TV (2.5 hours) or using a games console (45 minutes).

Statista has forecast that revenue from video streaming in Singapore hit US$75m in 2020, and is forecast to grow at a compound annual growth rate (CAGR) of 6% to reach US$94m by 2024 by which time 1.7m users will stream some form of advertising (AVOD) or subscription video on demand (SVOD) content. Such is the expected rate of penetration and growth, PwC’s Entertainment and Media Outlook 2019-2023 reportiiestimates that spending on OTT video will exceed that spent on cinema tickets by 2020 and traditional home TV and video by 2021.

Global and Local Players Vye Singapore’s Video Streaming Pie

Singapore’s healthy appetite for streaming video is also reflected in the fact that “movie” was the 3rd most popular Google search query in January 2020. Almost all 16-64yr olds watch some form of online video (96%) and 43% watch video logs according to GlobalWebIndex. Three-quarters of 16-64-year-olds use entertainment or video apps.

While Netflix was the tenth most downloaded mobile app in the country in 2019, it ranked first according to consumer spend (ahead of rival OTT video streaming app Viu in 5th place). Statista estimates Singapore also has some of the highest average revenue per user in the SEA region, standing at US$52 in 2020 and set to reach US$54 in 2024.

Regional players have a key advantage in delivering more local content, including sports coverage, compared to Netflix and Amazon Prime video, which target mainly English-speaking audiences. Nevertheless, and despite comparatively high monthly subscription charges starting at US$8 a month, Netflix has managed to accumulate many subscribers through partnerships with SingTel and Starhub that allow customers to pay for content through their postpaid mobile phone and residential broadband accounts.

Amazon Prime belatedly revamped its proposition in Singapore last October, pricing membership at US$3 a month to include access to its Video app and game streaming platform Twitch alongside online shopping delivery perks.

Other OTT streaming video providers focus on offering viewers a broader range of Singapore and Asia specific content. Mediacorp’s meWATCH for example - formerly known as Toggle prior to a rebrand in January 2020 – offers a library of on-demand VOD content in Malay, English, Korean, Mandarin and Chinese sourced from distributors including HBO Go and South Korea’s tvN Movies as well as Mediacorp’s free to air channels exclusive to Singapore.

Mediacorp also signed a partnership with iFlix in April 2019 added around 500 hours of its locally produced “Made in Singapore” English and Chinese content to iFlix’ existing VIP SVOD library (Singapore being one of the few SEA countries which iFlix does not currently operate in). Elsewhere PCCW-owned Viu offers a mixture of free and premium content, the latter costing between US$5 and US$7 a month depending on the length of the contract, and available via Singtel mobile phone accounts.

Hooq (a joint venture between Singtel and Sony and Warner) used to have a similar arrangement with its telco owner. But the company filed for liquidation this month [March 2020] despite amassing an estimated 80m subscribers across India, Indonesia, Thailand, Singapore, and the Philippines. Hooq management said the business was unable to deliver sustainable returns due to the high cost of producing original content (estimated at 65 productions to date) and consumers’ unwillingness to pay for it. The company has received around US$95m of investment put towards producing that content and capturing market share to date, including the US$70m put up by Singtel, Sony and Warner back in 2015.

Singapore Telcos Offer Video Streaming Add-ons with Carrier Billing Payment Option

That doesn’t mean Singapore’s largest telco no longer has a stake in its OTT video streaming market. Singtel is behind another VOD service CAST launched in 2016 which supports streaming and downloads of content aggregated from providers such as Fox+, Viu Premium and Netflix (but no longer HOOQ) with prices starting at US$5 a month, or US$59 a year.

StarHub and M1 too have their own services. StarHub launched StarHubs Go in partnership with HBO Asia in 2015, with subscriptions starting at US$10 and rising to US$25 depending on the content packages chosen. The telco’s fixed and mobile broadband postpaid customers can charge subscriptions to their existing monthly bills, while others can pay for via credit cards. It also added Go Max in 2019, priced at US$19.90 per month and available on two screens through a mobile app.

M1 partnered Televisions Broadcasts Limited (TVB) to offer its customers in Singapore exclusive access to the latter’s TVAnywhere+ platform via a mobile app in 2018. Subscriptions which offer concurrent streaming on up to three mobile devices simultaneously cost US$6 a month, billable directly through customers’ M1 mobile and home broadband accounts.

Local MNOs have a distinct advantage in that an unusually high percentage (66%) of mobile connections in Singapore are postpaid, which guarantees a more stable and predictable source of recurring revenue both for the carriers themselves and the OTT video streaming service providers delivering content paid for via direct carrier billing (DCB) through those accounts.

Alternative Digital Payments Growing in Singapore

Yet given the high proportion of the “banked” population - 98% of Singaporean adults have accounts with financial institutions and 49% credit cards – alternative forms of digital payments are already better established in a country where online commerce is already well advanced. Over half (57%) of adults make online purchases or pay bills online while two thirds (68%) of 16-64-year-olds use shopping apps.

The share of the US$5bn business to consumer e-commerce conducted on mobile devices, specifically in Singapore, is calculated at 42% (US$2.1bn) according to PPROiii. Online marketplaces Carousell and Lazada ranked in the top ten mobile apps by monthly active users in 2019 according to App Annie, with 51% of 16-64yr olds making online purchases using their mobile devices. Almost half (46%) also use banking apps, 57% employ their mobile phones to use or scan QR codes and transfer money to family and friends, while 27% use their devices as a ticket or boarding pass.

Looking forward: Opportunitines in Alternative Payment Methods

Yet almost three-quarters of B2C e-commerce spend is funded by credit card purchases, 9% bank transfers and 4% cash. That perhaps isn’t surprising in a developed country with a high median age of 42.2 years. However, younger citizens forging Singapore’s future are helping alternative methods of digital payments to flourish too. The country has a high use of electronic wallets (eWallets), which accounted for 11% of total B2C e-commerce spend last year and are invariably tied to smartphone apps, illustrating that telcos can continue to expand their role in the payments landscape if they can offer fast, convenient billing for the digital content as well as physical goods people want to consume.

iGlobalwebindex, Q32020
iiPwC: Entertainment and Media Outlook 2019-2023
iiiPPRO: Payments and E-commerce Report 2019/2020