How To Score the Next Billion+ Subscribers

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Major SVODs are looking outside the US in order to grow as the domestic market slows, but accessing emerging markets is not straightforward. A minefield of technical and business traps lie en route but the potential reward is billions of new viewers.

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If VOD penetration rates in just the two largest emerging markets — China and India — rose even to Hong Kong levels, it would mean an additional 1.2 billion viewers, calculates Zenlayer. That’s nearly double the combined populations of the United States and European Union.

The cloud service provider suggests that media and entertainment companies will need new strategies in order to succeed.

One reason is that consumers in emerging markets have different habits and preferences. For example, the use of mobile devices to view content is much more prevalent in emerging markets. That has implications on both the business side (e.g., subscription types and price points) and the technical side (e.g., IP transport and networking for direct connectivity with mobile ISPs).

Different regions pose unique challenges. Some are business-related, such as local entity requirements (e.g., Internet Content Provider licenses required in China) and complex compliance schemes (for instance, content regulations). Others are technical challenges, such as under-developed interconnectivity (limited peering, for example) and under-developed utility infrastructure (e.g., relatively low power reliability).

Connectivity itself is a whole other issue, especially if streamers are going to provide users with real-time personalized digital experiences.

Zenlayer argues for its edge computing infrastructure. Strategically locating Points of Presence (PoPs) solves for interconnectivity issues within emerging markets and enables regional availability. Making decisions as close to the user as possible — at least in-country — is essential given the fact that no matter what you do to accelerate your application, you will always be bound by the speed of light and physical distance.

A globally interconnected private backbone — another Zenlayer specialty — solves for interconnectivity issues getting into and out of emerging markets, it says.

“Direct interconnects between global and regional internet service providers make the average number of hops between source and destination just 1.5. And it enables a hybrid cloud deployment approach irrespective of emerging market public cloud infrastructure gaps.”

Other common issues include poor application performance, slow synchronization across regional cloud servers, and interruptions during cross-border downloads.

Carlos Morell, VP of M&E Services at Zenlayer, says, “While the challenges for media and entertainment companies looking to tap into the tremendous opportunity in emerging markets are significant, they’re not insurmountable.”