With millions of people stuck at home during the pandemic, either under orders or out of cautious fear, streaming services have seen a big surge in the number of subscribers--and the death of the cord has been etched in stone at this point. But it’s an aggressive and hungry playing field, and the competition is warlike.
Major global streaming services, mostly based in the U.S. and China, are experiencing high competition as markets become dense and saturated.
In the U.S., Netflix is currently the market-leader in the streaming industry with more than 150 million subscribers globally, followed by Amazon with more than 100 million subscribers. Disney+ service has surpassed 55 million subscribers since it launched late last year.
In the past few years, the U.S. market has seen several new streaming providers consolidate to win greater market share.
But China is in the same boat.
China’s tech giant Tencent is now negotiating to acquire video streaming rival IQiyi, which lost $1.5 billion in 2019. This deal would create a massive company with more than 220 million paid subscribers, mostly on the domestic market in China.
In June, Tencent announced it would be expanding outside of China by buying Malaysia’s Iflix video streaming service.
The main significance of the acquisition is that iflix is available in 13 countries across Asia including the key markets of Malaysia, Indonesia, Bangladesh, the Philippines, Thailand and Brunei.
But it’s not only Chinese behemoths eyeing Southeast Asia.
It seems that video streaming providers from both countries are looking to expand in this region, which could easily open up new geopolitical frontiers with streaming services becoming part of the ongoing U.S.-China tech war.
Netflix is believed to be the largest streamer in the region in terms of subscription revenue, iQIYI and Tencent are well placed to grow in the future, along with new entrants such as Disney Plus. All of them offer services at far lower rates than they do at home.
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In the latest, the authorities in Taiwan have announced they are banning Chinese streaming providers Tencent and Baidu’s iQiyi--both of which have been operating in Taiwan in the grey area under a legal loophole that allowed them to partner with local companies.
The new order will prohibit Taiwanese individuals and organizations from working with mainland Chinese video streaming companies.
Democratic Taiwan, claimed by China as its sovereign territory, is clearly making this decision with foreign backing. Even though the US has avoided major displays of friendship with Taiwan so as to not antagonize China, lately it has resurfaced as Taiwan’s main ally for the same reason: to antagonize China.
Last weekend's visit by U.S. Health and Human Services Secretary Alex Azar to Taiwan was the highest-level trip since 1979.
On a much larger scale, India, a nation of 1.3 billion, banned a total of 59 Chinese apps last month, including TikTok and Tencent-owned WeChat, after a deadly border clash between Indian and Chinese troops.
India’s decision did not include any major Chinese streaming provider but will surely create a difficult business environment for Chinese companies operating there.
U.S. President Donald Trump earlier this month threatened to ban Tencent's popular messaging app WeChat and TikTok. As for streaming service iQiyi, U.S. regulators are probing iQiyi after a short-seller in April accused the company of vastly overstating its subscriber numbers and revenue.
By Josh Owens for Safehaven.com
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