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Vidio’s winning strategy with local content power
Globally, over-the-top (OTT) market is dominated by three international players, namely Netflix, Disney+ and Amazon Prime. However, an anomaly occurs in Indonesian market wherein Vidio, a local player, is reigning over even the global platforms, at their own games.
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em>The COVID-19 pandemic changed the entire landscape of the film industry as it shifted the audience’s preference toward streaming platform over going to the cinema. “People have grown comfortable watching [movies] at home,” American film consultant David A. Gross told the New York Times on Dec. 9. Globally, over-the-top platforms are dominated by three international players, namely Netflix, Disney+ and Amazon Prime. However, an anomaly occurs in the Indonesian market wherein Vidio, a local player, is reigning over even the global platforms, at their own games. Vidio managing director Monika Rudijono spoke to The Jakarta Post’s Deni Ghifari on Dec. 9 about the company’s position, condition and business strategy.
Question: How did Vidio come about?
Answer: In 2014, Adi Sariaatmadja had an idea of making a streaming platform for Emtek Group. The initial plan was just making contents from Indosiar and SCTV available online, that’s how it started.
But then our turning point happened in 2018 when we broadcasted the Asian Games, that’s when we started becoming a household name. Seeing that success, Emtek Group then decided to make Vidio one of its main investments.
From there, Vidio teams conducted comparative studies to foreign platforms and from there, we learned that sports could become one of the main pillars for over-the-top (OTT) platform. Sports could bring in subscriptions because audiences want to see them live.
And we can see from the FIFA World Cup 2022 alone, which we broadcasted this year, our daily-active users from the sports segment increased by 280 percent and more than 14 million unique users watched the event.
Can you describe the market competition?
Vidio always knew that global players would enter the Indonesian market with their quality contents and thus, we, as a local player … If we play by their book, we won’t have a differentiator.
With our combined experience in television, we understand what kind of contents the Indonesian audience likes. In 2019, we started producing our own original series with the belief that local content is just as important as sports.
To that end, local contents became our unique selling point and market differentiator and surprisingly, these contents attracted a quite equal number of subscribers as sports did.
In Indonesia, local-contents consumption rate is at 34 percent. Mind you that is significant given it stands as the majority vis-à-vis contents from Hollywood, Korean, anime, etc.
What kind of contents do you have on your platform and what are the sources of Vidio’s revenue streams?
Basically, we have four content pillars: they are sports; original productions; then there are licensed contents that are comprised of Hollywood, Korean, anime, Indian, Mandarin, etc.; and the last pillar is TV content, in which we broadcast national TV stations such as Indosiar, SCTV, Trans TV, etc.
In terms of consumption time, TV contents are currently on top. Below that are sports, original contents and licensed contents, respectively. However, the difference is not that significant, and the rank may switch over time.
Based on those pillars, Vidio has two business models: they are advertising-based and subscription-based.
Meaning, people don’t necessarily have to subscribe to watch something on Vidio because we have free contents, from which we earn revenue from advertising. TV contents are examples of free contents.
In addition to advertising, we rely on subscription for revenue streams and at this point we are still focusing on those two. On top of that, we also focus on strengthening our content basis since that is the foundation of our current business model and we are striving to keep developing and expanding our features for future possibilities.
Do you think the current strategy is sustainable?
Our view is we are on the right track. However, we need to be mindful that sports as a content is not something that we own given we buy the broadcasting rights, hence our aggressive attitude in creating original contents.
We believe that original local contents are a central market differentiator. It’s true that all OTT produce their own original contents, but when it comes to local ones, no one is as serious as we are.
Firstly, from the amount of contents produced. Throughout 2022 alone, we released 37 web series, while our competitors came with only six to seven titles each. Assuming these 37 titles have eight episodes each, that’s nearly 300 episodes.
And we have six soap operas with around 30 episodes each, so that’s a total of 180 episodes. So, 180 plus 300, that’s one new episode every day of the year. That’s huge; it’s massive. We are that serious in churning out local contents.
It’s not just about number either; we make a serious effort in pushing the quality of contents we produce year by year. Last year we had one or two hits, but this year we have more, and they are far more consistent and that’s just about what we want to achieve.
How far do you control creative quality?
For original production, the name of the game is supply. The Indonesian film industry is growing fast but, in reality, we don’t have that many production studios, neither do we have that many filmmakers. Yes, we do have up-and-coming directors, but compared to India, for example, or Korea or the US, our figures are still low.
So, from supply side, it’s challenging in Indonesia. With that in mind, you might ask, ‘How come we managed to produce 37 titles?’ That’s because we have joint ventures with production houses. Among some, we have joint ventures with Screenplay Films, Sky Films, Amadeus Sinegmana and Wahana Kreator Nusantara.
These production houses are the ones that supply contents to our competitors as well. However, since we have close ties through the joint ventures, these studios favor us over the others. Thus, we can secure the downstream of the production itself.
But, in terms of creativity, we want our creators to create. Vidio does not want to dictate filmmakers. What we do is we share what works and what doesn’t for an OTT series; we give feedbacks to the creators.
Because we let creators create, you can see that the genres of our original series vary, from romance to action, and this is only possible because we give filmmakers the space to be creative.
OTT gives filmmakers the opportunity to work in a very different way given the format and our existence make them more productive due to high demands.
What is Vidio’s current position?
We are still focusing on growth because we see the market potential in Indonesia. However, we don’t merely just focus on increasing subscribers because we make sure that our subscribers actually watch Vidio -- actually consume our contents.
So, we don’t just focus on numbers. Yes, growth is important for us; but, on top of everything, making sure our users are active users is the most important.
