Asian streaming services claw back against Netflix and Disney

Asian streaming services are chasing Netflix, Disney, and other big streamers through partnerships and localized content as they try to loosen the grip of the US giants in the fast-growing market.

“Our basic strategy is to hold all four corners of the non-drama series arena where Netflix hasn’t reached yet,” president Tenshin Tsutsumi of U-Next, Japan’s second largest streaming service behind Netflix, told Nikkei Asia in an interview, explaining that his company hopes to establish anime, movies, sports, and music tiers and reach 5 million subscribers.

U-Next had 4.5 million subscribers in Japan as of December 2024, while Netflix boasts that it doubled its Japan subscriber base to 10 million in the first half of 2024.

“We [local businesses] can’t compete with [such giants] structurally unless we create a global alliance network among several companies [in each region], kind of like a coalition force … and unite.”

In September 2024, U-Next established a partnership with Warner Bros Discovery and obtained exclusive distribution rights in Japan for content from the Max streaming service. It hopes to add South Korean content to its portfolio soon.

Asian streaming services are riding high as the market expands. According to research agency Media Partners Asia, the Asia-Pacific video industry is expected to grow to USD 165 billion by 2028 from USD 145 billion in 2023, pushed up by markets in China, Japan, India, South Korea, Australia, and Indonesia.

Hong Kong streaming platform Viu has been taking Southeast Asia by storm. In 2022, it beat Netflix with 66 million monthly users in the region, its popularity fueled by a free subscription option and local content.

Viu, which launched in 2015, hit 11.7 million paid subscribers in June, up 11% year on year. The platform recently added over 110 new titles, including new offerings from South Korea, China, and Thailand.

Meanwhile, Paramount Pictures in 2022 partnered with South Korean entertainment giant CJ ENM to make films and drama series together and provide Paramount content on CJ ENM’s streaming platform, Tving.

Tving, which has been recently relaunched as a joint venture, surpassed 7.8 million monthly active users in 2024, growing its revenue 55.6% year on year, according to the company’s third quarter earnings report, released in November.

U-Next has also been expanding its array of Japanese TV dramas and hopes to create its own original series like Netflix does by 2027 or 2028.

Japan’s digital trade deficit is on track to reach an annual record of JPY 6 trillion (USD 39 billion) in 2024. Many of the companies raking in the money are global giants like Google, Amazon, and Microsoft.

Tsutsumi, meanwhile, keeps walking the talk. He is confident that U-Next has an edge in successfully developing relations with Japanese entertainment industry players, with a strong understanding of its culture and how it has operated.

“When you look at the industry scale, the character [business] overwhelms live action,” he said, pointing to media like anime.

Japan’s content industry has become one of the country’s fundamental export pillars, valued at JPY 4.7 trillion (USD 30.5 billion), nearing the value of chips (JPY 5.7 trillion; USD 37 billion)) and steel (JPY 5.1 trillion; USD 33.1 billion).

U-Next has been developing its own intellectual property, establishing units for novels, manga, webtoons and kids content. In 2024, its novel “Two in the Danchi (Two in the Housing Complex)” became a hit drama series by public broadcaster NHK. In January, a new drama series will be released based on one of the company’s original comic series.

This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.