Tuesday, 17 July 2018

Netflix cosies up to telcos as it eyes Asian expansion

By Chris Kelly, Total Telecom
Tuesday 26 June 18

Original language content is fueling a surge in demand for mobile video content, according to Netflix's VP for business development

Close relationships between telcos and content providers will become increasingly important, as network operators look to devise new strategies to monetise the vast amounts of data that pass through their networks. In many ways, Netflix rise to promisnence can be seen as the perfect example of convergence between the media and telecommunications industries…

Close relationships between telcos and content providers will become increasingly important, as network operators look to devise new strategies to monetise the vast amounts of data that pass through their networks.

In many ways, Netflix rise to promisnence can be seen as the perfect example of convergence between the media and telecommunications industries.

Telcos around the world are starting to cosy up to Netflix and other content providers, in order to evolve new strategies to monetise data and drive customer engagement. 

For Netflix too, partnerships like these are extremely valuable, providing them with access to enormous, often untapped, markets.

"Partnerships are in our DNA," said Tony Zameczkowski, VP of business development at Netflix, during a panel session at ConnecTechAsia this week.  

"We have over 60 partnerships across the world with a series of telcos and pay TV providers. We have our own infrastructure too but it is critical for us to interconnect with operators," he added.

Zameczkowski said that it was in both party's interest to build conducive, long lasting partnerships.

"We want long-term partnerships with telcos. What we gain from them is that we can benefit from their extensive knowledge of their huge customer base. From their point of view, they get the experience of the international best practice that we have perfected over the ears, as well as the ability to drive data consumption on their networks," he explained.

Mobile consumption will be critical to the success of Netflix's business model in the years to come and nowhere is that truer than in South East Asia, where 70 per cent of the population access broadband via a mobile device.

In India, Netflix is working with smartphone manufacturers like Huawei and Xiaomi to pre-install the Netflix app on all new smartphones, providing extreme ease of access to hundreds of millions of potential customers.

South East Asia's economy is growing at a compound annual growth rate of 6 per cent, and by the year 2030, it is expected to represent the world's fourth largest economy. It also has 330 million internet users, 70 million of whom have been brought online within the last two years. Little surprise then, that Netflix has identified the region as a key area for growth.

"Netflix saw extremely high and immediate penetration when it first launched in Singapore, so obviously that is a huge market for us, but there are also more developing markets such as The Philippines and Thailand that are extremely important too," he said.     

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