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Netflix, an American streaming service provider, is so popular that it has now become a verb. Netflix and chill, anyone? This phrase first became popular around 2014-2015, and the exact definition varies depending on who you ask. The popular opinion is that the phrase carries sexual undertones; ‘Netflix and chill’ is a more PG-friendly way to say ‘movie and sex.’ However, it is not unusual to receive an invitation to ‘Netflix and chill’ that entails exactly those: a gathering of friends to watch Netflix and chill together.

The fact that such a phrase has become part of our daily online and offline conversations illustrates just how big the company has gotten. And the main reason for that is because streaming services (or over-the-top (OTT) media services) have changed the way we consume content in a major way.

Convenience is the main USP. We can now watch what we want whenever we want to. We have more control over the content we consume than ever before, with so many choices from so many platforms. Gone are the days when we waited a week between episodes of our favourite shows; now we binge watch them.

Southeast Asia alone is estimated to have generated $600 million in overall subscription music and video revenue in 2019, and the figure is set to explode to an annual $3 billion by 2025. As the world battles coronavirus and imposes lockdowns, the appetite for content streaming at home across Southeast Asia has also increased. Consultancy Media Partners Asia estimates that Southeast Asia video streaming service subscribers will reach 14.7 million by the end of 2020.

In Indonesia, revenue from the video streaming segment is projected to reach $140 million in 2020. At the moment, there are roughly 13 million users in the country with 4.7% user penetration rate. The rate is expected to hit 9.0% by 2025.

The ongoing COVID-19 pandemic, which has forced us to seek more in-home entertainment, has led to a significant increase in users and subscriptions for many platforms. In fact, at the beginning of this pandemic, various streaming platforms in Indonesia offered free services for a certain period to encourage people to stay home.

GoPlay, for example, offered free access to Indonesian users from March 23 to 29 as part of its contribution to encourage people to stay home. Meanwhile, Vidio allowed users to freely access Indonesian films, such as Gundala, The Raid and Fiksi, from April 4 to 30 by simply downloading the application, registering and redeeming a voucher code.

Indonesian consumers are faced with many choices of local, regional and international flavours. The global and regional players include Netflix, Viu, HBO Go, iFlix and, most recently, Disney+. The local offerings include GoPlay and Vidio. All these services offer different product selections at various price points.

For example, Netflix hosts many international, local and regional movies and TV shows for different segments and have been partnering with local production houses, such as Falcon Pictures and Visinema Pictures, to exclusively air a number of Indonesian movies. Viu focuses more on Asian drama series and original movies, while Vidio airs a selection of exclusive sports programs and national TV streams. The new kid on the streaming block, Disney+, offers content produced by studios under the Walt Disney Company and many more.

What is particular about Indonesia is that while the growth of streaming services in the country is steady and significant, the market itself is far from mature. The Indonesian OTT services market is still largely untapped, which means plenty of opportunities for different OTT platforms to get chunks of the consumer pie. Not to mention, the concept of OTT services itself is still unfamiliar to many. Hence, OTT services companies have to formulate penetration strategies that differ from the ones used on more mature markets.

Indonesia, and Southeast Asia at large, is a very mobile-centric market. Thus, introducing cheaper mobile plans and adapt their product to fit lower-end smartphones are crucial for OTT platforms in capturing the Indonesian market.

Netflix, for instance, launched a mobile-only plan for Rp49,000 ($3.50) per month, which does not include data. This is quite a departure for the company, which has held firm on pricing in Western markets. Beyond that, Netflix is reportedly working to expand its payment options in countries with low credit and debit card penetration. For example, in the Philippines, users can pay for Netflix with mobile phone plans or prepaid cards available at convenience stores.

Meanwhile, GoPlay benefits from being part of Gojek’s ecosystem, making it automatically accessible to over 125 million existing users of Gojek. This also allows GoPlay to do cross- or bundling promotions with Gojek’s other services, such as GoFood or GoTix. Disney+ established a strategic partnership with Telkomsel, allowing them to offer a package that combines data and content. Disney+ understands that OTT services users in Indonesia are often restricted by data usage, and this bundle solves the issue.

Appealing to the local palate also includes the localisation of content. Sometimes, that means adding local content into their catalogue, which almost all of the available OTT services have done. Other times, it means releasing content made specifically for the Indonesian market. GoPlay recently announced five new original content, consisting of scripted series and reality shows. Earlier this year, the company also launched the Indonesian adaptation of the American TV series ‘Gossip Girl.’

As the global pandemic continues and the future of movie theatres remains uncertain, streaming services have become one of the primary choices for viewers to enjoy content. Filmmakers seem to have understood this as well. Over the past few months, we have seen several movies opting for streaming premieres, one of the most high profile being ‘Mulan’ which premiered in September on Disney+. Indonesian movies are doing it as well; ‘Guru Guru Gokil’ by BASE Entertainment was released exclusively on Netflix in August, while Disney+ has announced that there are seven Indonesian movies to premiere exclusively on the platform, including ‘Warkop DKI Reborn 4.’

Certainly, we would be doing streaming services a disservice if we merely consider it a substitute for movie theatres. OTT services offer a different experience altogether for filmmakers. For instance, these services are open to a broader spectrum of content with looser regulations, allowing a level of freedom filmmakers often find lacking in traditional movie theatres.

Shanty Harmayn, Producer of ‘Guru Guru Gokil’ understands the importance of OTT platforms in reaching a movie’s audience: “It is especially important when it comes to international streaming platforms that can access much broader markets relatively quickly. It is immediate by nature since the content is available on demand.” The challenge for filmmakers? “More competitive, because there are so many options,” Shanty added.

At the end of the day, Shanty is confident that streaming platforms and movie theatres can co-exist, “The co-existence of OTT services and movie theatres is the best combination for the development of the Indonesian film industry,” she concluded.

Streaming services were already experiencing a steady growth to begin with, but the ongoing pandemic definitely accelerates it. Traditional media, such as television, was already seeing a decline in popularity among the 18-34 segment, and streaming services capitalise on that. These OTT services are never meant to replace movie theatres or traditional media, but rather a complimentary option that meets customers’ different needs.

The industry landscape is full of potential, but ultimately consumers will only choose an option that fits their needs. Thankfully, the Indonesian market is diverse enough for industry players to continue thriving and developing despite the growing competition. Now we just watch and see, literally.