- Disney+ localized its content strategy by launching special streaming services such as Hotstar in Indonesia to attract more subscribers.
- The platform's affordable subscription fees and business model make Disney+ more favorable over Netflix in these markets, some analysts say.
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Disney+, the video streaming platform launched by Disney in 2019, has been growing in popularity in Indonesia and it could overtake Netflix in markets across East Asia as it builds its subscriber base by strategizing opportunities rising from closed theaters during the pandemic.
Although Disney+ is in an early development stage in Indonesia, a country with 270 million people, its streaming service Hotstar had attracted as many as 2.5 million subscribers as of January 16, according to Hollywood Reporter.
Launched in September, Hotstar service offers movies, series, and content from Disney, Fox, Marvel, LucasFilm, Pixar, National Geographic, as well as more than 250 local Indonesian films.
Disney's local content acquisition strategy in Indonesia helped promote Hotstar across the country. Indonesia content offered made up 20% of all Disney+ Hotstar mminutes consumed in December 2020, according to researchers at Media Partners Asia (MPA), a regional consultancy firm.
The service, which adopts the Subscription Video on Demand business model, became popular when Disney partnered with Indonesia's wireless network provider Telkomsel, allowing the company to market Disney+ Hotstar with its mobile data plans.
The Hotstar average monthly subscription ranges from $0.80 to $1.40 for Telkomsel users and $1.10 to $2.60 for direct subscribers. Those subscription fees are less than Netflix's mobile plan which costs $3.60 per month while other Netflix services range between $8.10 and $12.50 in Indonesia.
Around 3% or slightly over eight million people of the total Indonesian population are subscribing to SVoD services, as opposed to 850,000 Netflix subscribers, the data shows.
Indonesia had an estimated 3.4 million streaming subscribers before Disney+ launched its Hotstar service in the country. This figure increased 106% to around 7 million as of January 16, according to MPA's report.
"The growth of SVoD in Indonesia, the most populous market in Asia after China and India, is encouraging but has a long way to go," MPA Vice President Anthony Dobson told the Hollywood Reporter, noting that just 10% of Indonesian households are currently streaming subscribers.
Disney's global SVoD expansion "has been a success to date" and could secure over 90 million subscribers in India if it can obtain key sports rights and continue to deliver local original content, MPA said earlier this month.
Other analysts also agree that both Indonesia and India are promising markets for Disney+ as they represented around 18.4 million of the streaming service's subscribers in 2020. India has the potential to become Disney+'s largest market with a massive population of 1.3 billion in the country, David Heger an analyst at Edward Jones told Fortune.
"What we've done in India will help illustrate how we have adapted our approach," said Chairman or International Operations and Direct-to-Consumer at The Walt Disney Company Rebecca Campbell during Disney Investor Day in December. "With a rapidly growing middle class and expanding discretionary spending, India is a promising market opportunity and we are uniquely positioned to succeed in India due to our existing presence with Star TV and Hotstar digital brands."
Even though Netflix has been around for over a decade, Disney+ obtained 86.6 million subscribers as of December 2, which is 44% of Netflix's total subscribers worldwide. Of the 86.6 million subscribers, 30% are Hotstar subs.
In December, Disney+ announced that it will launch in the South Korea and Hong Kong markets in 2021 as well as Eastern Europe markets.
—Disney (@Disney) December 10, 2020
Online video revenue in the Asia Pacific region is expected to reach $50 billion by 2024 due to a developed payment infrastructure and better access to local content, according to a 2020 report by Media Partners Asia.