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Vietnam switching to Internet TV channels

March 26, 2021

Filippo Giachi

VP – Asia Pacific, Middle East & Africa

The growing availability of high-speed mobile Internet networks and smartphones in Vietnam is pushing significant changes in the way people watch TV shows and movies in the country. So too are increased sales of smart TVs as consumers prefer to buy devices on which they can download apps that give them access to over the top (OTT) video streaming services like Netflix and iFlix.

Grand View Research noted how smart TVs’ increased popularity has negatively impacted the cable TV market and demand for set-top boxes (STBs) and conventional television platforms around the world. The company estimates that the global value of smart TV sales will expand from US$176bn in 2020 to US$292bn by 2025, for example.

At a local level, telecommunications analyst firm GlobalData estimates that household penetration of Pay-TV subscriptions in Vietnam (mainly cable TV services) will decline from 35.4% in 2020 to 30.3% by 2024. By contrast, IPTV subscriptions (i.e. Internet video streaming) are expected to expand at a compound annual growth rate (CAGR) of 1.5% over the same period as the nation’s fixed broadband penetration and capacity increases.

Fixed-line network connectivity in Vietnam has improved considerably in recent years, with average download speeds rising 41% to reach almost 61Mbit/s by December 2020, according to Ookla speed tests. The same is true of mobile networks, with cellular download speeds increasing nearly 14% over the previous 12 months to reach 34.5Mbit/s. The GSMA estimates that 64% of all mobile connections in Vietnam are either third (3G), fourth (4G) or fifth generation cellular (5G) enabled after state-owned telco Viettel launched the country’s commercial 5G network in Hanoi in December 2020.

Smartphones becoming the go-to device for video consumption

People in Vietnam watch TV and movies on multiple devices. Still, it’s the smartphone that is becoming the go-to device for many of its 98m citizens, particularly younger generations. The GSMA estimates mobile phone penetration in the country at 158%, while far more of those aged between 16 and 64 (97%) own smartphones than they do laptop or desktop computers (66%) or tablet devices (32%), according to GlobalWebIndex (GWI) statistics for the third quarter of 2020.
GWI also estimates that the average time spent using the Internet on all devices amongst Vietnamese aged 16 to 64 is six hours and forty-seven minutes, which is far longer than they do either watching TV (two hours forty minutes) or playing video games on a games console (1 hour fourteen minutes).
Again, smartphones that look like they play a significant role here, with 95% of the same age group accessing the Internet via mobile devices for an average of three hours and eighteen minutes every day. That helped push the share of web traffic in Vietnam attributed to mobile phones up by 147% between December 2019 and December 2020. It now represents 40% of the total, whereas Internet traffic on laptop and desktop PCs declined 30% to account for 58% last year.
GWI also estimates that 98% of citizens aged between 16 and 64 watched online videos every month as of the third quarter of 2020, with over 83% accessing entertainment and video apps specifically. And a significant proportion (37%) also watch the same content on a smart TV by casting it from their smartphone.

OTT Streaming Providers in Vietnam

The increasing appetite for downloading and streaming TV and video content via the Internet has led to multiple companies launching subscription video on demand (SVOD) services in Vietnam. The most recent market entrant is VieON, a smartphone app developed and launched in June 2020 by the Vietnamese media, entertainment and technology group DatViet DAC with BCG Digital Ventures’ backing.

VieON joins a long list of local Vietnamese providers offering similar platforms. These include K+, a joint venture between the Vietnam Satellite Digital Television Company (VSTV) and French broadcaster Canal+ that expanded its content delivery to allow its satellite subscribers to stream content onto their smartphones, tablets and PCs with the launch of its MyK+ service in 2016.  SCTV Vietnam and HTV Online. Three of the leading cable TV providers in Vietnam – VTV, VNPT and SCTV, also developed similar online content stores and streaming apps to address declining revenue from their other services.

Regional Southeast Asian and Malaysia-headquartered provider iFlix first launched its platform in Vietnam in 2017, with Chinese providers WeTV and iQIYI also offering services. International players are also present, notably Netflix and Amazon Prime, through their comparatively high prices (between US$7.70 and US$11.20 a month in the case of Netflix) and lack of content customised for Vietnamese language speakers a culture have limited their adoption to date.

A survey of 202 Vietnamese aged between 20 and 49 conducted by Statista in February 2020 found that the most popular video streaming service in Vietnam in 2020 was FPT Play, used by 39% of consumers, and Netflix (23%) and On TV (21%). Vietnamese telecommunications carrier FTP Telecom introduced FPT Play as earlier as 2013 before extending its content library with an exclusive partnership deal with US streaming service HBO Go in 2019. Vietnamese telcos Mobifone (MobiTV) and Viettel (Keeng Movies) also offer rival services.

Such is the volume of different OTT video services on offer Statista now forecasts that the value of the SVOD market in Vietnam will expand by 28% to reach US$162m in 2021 and is expected to grow further at a compound annual growth rate (CAGR) of almost 17% to exceed US$302m by 2025. Over the same period, user penetration will grow from 5.7% this year to 7.4% by 2025, with average revenue per user hitting US$28.75.

The most significant advantage of OTT apps and online portals is their flexibility – they can be accessed from whatever device the viewer wants to watch according to location and availability. That will remain the smart TV in some Vietnamese households, but in a growing number of cases, a smartphone or a laptop will do just as well.

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