According to its recent financial statement, Vidio’s net revenue surged by 34 percent year on year (yoy) in the first half of 2023 to Rp 477.9 billion (US$31.1 million).

However, the company faced a large financial setback with net losses swelling to Rp 510.5 billion in the first half of the year, doubling from Rp 226.5 billion in the same period last year.

Institute for Development of Economics and Finance (Indef) researcher Nailul Huda said the over-the-top (OTT) streaming industry is a fiercely competitive market, marked by price battles among platforms.

Even streaming giants like Netflix have voiced concerns about this cutthroat competition, he said, which caused the firm to lose subscribers for the first time in a decade in 2022.

“It will take quite a while for OTT platforms [to reach profitability],” Nailul told The Jakarta Post on Friday.

A report by local survey platform Jakpat showed that only about a third of Indonesian OTT viewers surveyed were willing to pay full price for a subscription, while the rest preferred a cheap subscription or free service, and do not mind advertisements.

Acknowledging the number of subscriber fluctuations, Jakpat highlighted that while subscribers of Vidio were satisfied with its service, they lacked enthusiasm. The report suggested that if competing services offered greater value, subscribers might switch platforms.

More than half of those surveyed used at least two streaming platforms and about a fifth of users in the survey also wished to cancel their subscriptions to save money.

Vidio is currently the largest streaming platform in Southeast Asia in terms of users, according to Singapore-based consultancy Media Partners Asia, beating global players such as Netflix, Disney+ Hotstar and Amazon Prime Video.

The firm recently reported that local content played a pivotal role in driving subscriber acquisition in the country. The report also showed that sports had maintained significance in Vidio performance, particularly in the first quarter of the year.

Nailul shared the sentiment, saying, “In my opinion, Vidio’s current strong dependence on the English Premier League makes it likely that subscribers will opt for long-term subscriptions, drawn by the allure of a complete season of matches.”

Singapore-based consultancy Momentum Works academy program head Nanette Litya concurred.

While she appreciated the business strategy and subscription model, she told the Post on Friday, "[Vidio] needs to rethink how to increase the customer LTV [lifetime value] in the long run.”

She said Vidio has a unique position, attributed to its affiliation with Emtek, a long-standing media giant.

Unlike its regional counterparts, Vidio's distinctiveness lies in its seamless fusion of sports content, local series and live TV streaming, all integrated into Emtek's established broadcasting network which is further amplified by the support of its own production house, Sinemart.

In comparison, major global contenders like Disney+ Hotstar, Amazon Prime Video, Hongkong’s Viu and even China’s WeTV had pursued partnerships with production houses to create successful limited TV series, Nanette said. But due to their nature of higher standards, the number of locally produced series has been limited.

Nanette said that the costly acquisition of sports content licenses is a key contributor to Vidio’s substantial financial losses.

The high costs involved in securing broadcasting rights for popular sporting events, coupled with the competitive nature of the industry, have posed a significant financial challenge for the platform, she said.

This ultimately impacted its overall financial performance and contributed to the notable decline in revenue.

Vidio managing director Monika Rudijono said that the company’s integration into Emtek’s network has helped it attain economies of scale when acquiring access to premium content.

“We're jointly acquiring the sports content, with licensing costs distributed among sister companies,” she explained in a statement to the Post on Friday.

Monika said the company is aware that Indonesian audiences tend not to use subscription-based products and services, but the firm has provided subscription packages that are more suitable to its user’s needs. 

While streaming companies have spent years pursuing subscribers to catch up with United States-based streaming giant Netflix, there was a big shift last year to focusing on profitability.

Notably, only Netflix turned a profit globally by the end of 2022, while others reported substantial EBITDA (earnings before interest, taxes, depreciation and amortization) losses.

Disney considered shutting down Disney+ in some regions and cutting back on the content offered. This move followed a $228 million reduction in losses across services, including ESPN+ and Hulu, a 13 percent decline from the previous year to $659 million, according to CNN.