Almost three years have passed since the launch of over-the-top (OTT) streaming services (content providers that distribute streaming media as a standalone product directly to viewers over the Internet) in Pakistan, with Netflix being both the first-mover and at the forefront of all existing services.

Starting as a humble DVD rental service, Netflix has turned into a huge phenomenon. As of January 2019, they had a subscriber base of 148 million and their growth has been staggering, ranking 261 on the 2018 Fortune 500 List of the largest US companies by revenue (source: Fortune.com)

When Nextflix launched in Pakistan, they created headlines across all major newspapers and online publications for being a service that offered something never seen before – high-res, non-Torrents, ad-free, on-demand content, with the facility to be streamed across multiple devices. Although most of the content was international, films such as Na Maloom Afraad, Zinda Bhaag and Josh were available and recently, Pakistani dramas such as Humsafar and Zindagi Gulzar Hai have been added to the mix, making it ever more relevant to audiences.

Although Netflix have not released any official data regarding their subscriber base in Pakistan, Google trends and Google search results indicate that interest in the platform is increasing; since launch, there has been a 73% increase in Google search results for Netflix in Pakistan and the platform averaged 150,000 plus searches per month in the past year (source: Google Trends & Keyword Planner). Yet, although these numbers are promising, OTT streaming services still have a long way to go before they can completely change the way online content is consumed in Pakistan.

Although Netflix have not released any official data regarding their subscriber base in Pakistan, Google trends and Google search results indicate that interest in the platform is increasing; since launch, there has been a 73% increase in Google search results for Netflix in Pakistan and the platform averaged 150,000 plus searches per month in the past year (source: Google Trends & Keyword Planner).

There are three major barriers to the expansion of OTT streaming services in Pakistan. The first is that these services require a broadband connection of at least 1.5 Mbps for quality content and 5 Mbps for HD. Although most broadband connections can easily provide these speeds, the majority of the population uses 3G/4G connections via their phones to connect to the internet because they are far more cost-effective compared to broadband and hence easily accessible to young people (a major target audience for streaming services). The second is the fact that there is no shortage of pirated content available online. OTT streaming services offer high-quality, but they also come with a price tag of Rs 950 to 1,500 per month, a sufficiently large amount to deter a lot of people who would rather spend this on large data packages or even a small broadband package for devices in order to access pirated content for ‘free’. The third (and probably the biggest) barrier to expansion is that the subscription fee has to be paid monthly via a debit or credit card. This not only means that subscribers need to have a credit card, there is also the trust factor about using credit cards online (95% of all e-commerce transactions are still based on COD).

The question, therefore, is how many people in Pakistan have a combination of all the above? A high-speed internet connection; a willingness to pay up to Rs 1,500 every month for quality online content (despite easy access to pirated content) and a debit or credit card along with the willingness to transact online with it?

It seems therefore, that in the short-term in Pakistan the area where Netflix will have a significant impact will be that of content creators. Film producers in Pakistan have been quoted as stating that “previously we had only two options. Either sell broadcast rights or upload the film on YouTube for free. Now we have another alternative” (source: Pakistan Today). In this context, Netflix may prove to be a new way for Pakistani films and dramas to reach out to new audiences globally.

In 2018, Netflix CEO David Wells announced that Netflix would be producing approximately 700 original titles, including 80 original films and 80 foreign-language original productions. Given that Pakistan’s presence is growing in the media worldwide, this is a massive opportunity for producers, including TV studios and digital media companies to compete for a piece of Netflix’s eight billion dollar content budget for 2018-2019 (source: Digiday) The main disadvantage for content creators and owners working with Netflix is the fact that given there is so much new original content on the platform, it is increasingly difficult to grab a niche and find an audience and therefore, without a deep marketing commitment on the part of Netflix, those films and TV shows will be vastly challenged not to become lost in the content shuffle. What is encouraging however is that India has seen success on the platform. In fact, Netflix made their mark in South Asia with the release of Lust Stories and Sacred Games in 2018. According to Netflix, Lust Stories was the “largest watched original in percentage terms” in its first month (source: CNN Money). This means that the series was more popular with Netflix users in India than House of Cards or Narcos were with viewers in the US when they were first released. Netflix has also just released another Indian original series called Ghoul and has six other shows in the pipeline. Needless to say, there are millions of dollars worth of investment and revenue being exchanged with these initiatives.

Clearly, if Pakistani content creators can grab a piece of the Netflix pie, this would be the game changer for original content made in Pakistan.

Urooj Hussain is Associate Director, Digital, Brainchild Communications. urooj.hussain@starcompakistan.com