Vidio to Strengthen Strategy Amidst the Momentum of OTT Business Growth

The over the top (OTT) platforms are reaching its highest growth momentum. Social restrictions due to the pandemic, encourage people to look for alternative entertainment when they are at home. Video apps have become one of the most popular choices -- at least as mentioned by several surveys, including the recent one by The Trade Desk and Kantar.

Obviously, the industry players won't waste this opportunity, especially local players. Vidio, an OTT platform under Emtek, has recently become a hot topic. Apart from its impressive performance, with the constant position at the top of the rankings for apps in the entertainment/video category, they are also rumored to have planned some strategic actions.

It was rumored that the on-demand video giant Netflix was interested in investing in Vidio. But when we confirmed, the company replied that so far the information is market speculation. Meanwhile, company executives, in several interviews with the media, said that at this time Vidio was indeed open to obtaining external funding [beyond the injection of the parent conglomerate group].

Business growth

Vidio's Vice President Marketing, Rezki Yanuar, said that growth in terms of revenue in Q1 2020 increased by 3-4 times compared to the previous year. This is also driven by the number of users who heavily increased. The exponential traffic occurred around April 2020, at that time one of Vidio's strategies was to offer free access, also to facilitate changes in consumer behavior in the first phase of PSBB.

Vidio's Vice President Marketing, Rezki Yanuar / Vidio

The growth is also supported by the applied business model. There are two approaches, the first is free access to certain content [movies, series, TV streaming] with advertisements. Next, the premium access to exclusive content such as football match. The first model is considered to be a good bridge to convert new audiences, especially those who are unfamiliar with OTT services or [free] TV viewers.

"OTT is similar to e-commerce services in the past. At first, people were not familiar with the fact that shopping had to be charged for shipping, but now they are getting used to it. It's the same with OTT, when people get value or benefit from the shows that are presented, they can understand when they have to pay. to watch certain shows," Rezki said.

To date, Vidio already has more than 1.5 million paid subscribers. In addition to sports broadcasts, his team said that original content was the most popular. For this reason, they are quite aggressive in production this year,  there are currently 7 series ready to be aired. The aggressive move of local content is also seen as a way for Vidio to reach more Indonesian filmmakers.

Indonesia's OTT market

Indonesia's streaming app competition / DailySocial

The OTT industry is in fact, very competitive. The premature market results in massive penetration of foreign players. For local players like Vidio, unique selling points are crucial in order to bring more value to its users.

Responding to market competition, the Vidio team is quite confident that with their knowledge of the local content industry they believe they can better understand the entertainment needs of the Indonesian people. Moreover, Vidio has the support of one of the oldest media companies in Indonesia.

"The most significant OTT competition is content. Marketing and good products are useless without content that can fulfill user needs. For that, we have three pillars related to content, live streaming, sports, and original series/films," Rezki added.

Understanding of Indonesian culture is very useful as a strong capital for companies to compete. This includes the old habit of consuming pirated content. Vidio has an anticipatory step by having a special team that works with other digital platform providers such as Google or Facebook.

Collaboration with telco

Another strategy taken to expand its content coverage is to collaborate with other content producers. There are several collaboration agendas, but the Vidio team cannot reveal anything yet to the public. Fox Sports is an example of  Vidio's company partner to enter its content ecosystem. Sports shows such as F1 racing or MotoGP are considered to have a fairly good level of demand in Indonesia.

Collaboration is also intended to launch a monetization strategy. Vidio collaborates with some telecommunications and broadband companies as service distribution channels. In fact, the conversion of premium users from this partnership is quite large. In its form, Vidio access is used as an add-on to telecommunications/data services sold to customers. Also, payment options include paying for a Vidio subscription with a balance cut mechanism. Regarding this payment, the portion is quite large compared to others.

Business plan

Despite the rumors circulating about the fundraising plan, Vidio is indeed trying to become a stronger and independent business entity. He admitted that he aggressively escalating business since last year. The OTT market is very sexy, the company group also provides support, therefore, Vidio is getting serious working on its potential.

"Emtek as a group is well aware that even the future of the entertainment business is digitization. This is a strong reason to push Vidio to go further," Rezki said.

In general, there are several aspects to be accelerated as a strategy to grow the business. First, the content expansion. Second, product innovation -- including supporting live streaming activities, interactive quizzes for complementary events, and other gamification features. And third, Vidio seeks to increase marketing and distribution channels, not only to the smartphone platform but also to smart tv.

–Original article is in Indonesian, translated by Kristin Siagian