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Disney Innovates in Indonesia, Launching Hotstar Variant of Streaming Platform

MD Pictures' "Nona"
Courtesy of The Walt Disney Company Southeast Asia

In the entertainment business, the hugely populous Indonesia has been a country eternally on the cusp of something bigger. But tech businesses also know the South East Asian nation as a place of innovation and consumer experimentation.

The challenges are well-known: the country is Muslim-majority, but also multi-ethnic; Indonesia’s tropical archipelago geography is a stretch for any corporation; and only a sliver of its 250 million population have yet got into the habit of recurring subscription payments for dematerialized goods and services.

Innovation and scale come together this weekend, when Indonesia is the venue of what is arguably Disney’s most ambitious rollout of its Disney Plus direct-to-consumer streaming service. Being launched as Disney Plus Hotstar, a reference to the Hotstar platform that Disney acquired as part of Twentieth Century Fox, the new platform is a partnership with local phones giant Telkomsel. And it has by far the most local content of any Disney Plus territory, bar India.

Both companies describe the launch as transformational. Speaking at the APOS convention this week Setyanto Hantoro, President Director of Telkomsel explained how video entertainment is key the mutation of his company from unglamorous phones giant into a digital company, and specifically “the home of entertainment in Indonesia.”

“The launch of Disney Plus Hotstar in Indonesia, and also our collaboration with them, is transformational because it will expand digital service choice and also deepen digital lifestyle habits for all people in Indonesia,” Hantoro told Variety on the sidelines of the conference.

He adds, “It came just at the right moment, because SVOD has become one of the most preferred platforms in Indonesia, especially during the pandemic. Our customers, are eager to enjoy easy access to entertainment while also having quality time with their family or even with themselves.”

Uday Shankar, president of The Walt Disney Company in APAC, says that using Indian software engineering and the Hotstar name as part of the local branding made sense in Indonesia. As in India, Hollywood content alone might not have been enough of a value proposition to win over the Indonesian public.

“We have kept the Indonesian consumer in mind while designing the offering, be that the content, the product, or the pricing,” Shankar told Variety. “Disney Plus Hotstar includes the best of global and local content on a single app.”

At launch, the service will offer 13 exclusive premieres of Indonesian movies from local studios MD Pictures and Falcon. These include “Sejuta Sayang Untuknya,” “Warkop DKI Reborn 4” and “Denting Kematian,” and is a total up from seven when the service was teased in August. It also sets off with a library of over 300 Indonesian movies, including several previous box office winners.

In a market where most consumers do not have a credit card, and are deeply price conscious, the partnership structure makes sense, especially if it can also provide Disney with billing and marketing relations it would otherwise have to build for itself.

“Tapping into Telkomsel’s advanced broadband network and their customer services, such as marketing efforts and billing system, together with their attractive and affordable pricing packages, will enable subscribers to have easy access to our high-quality entertainment content,” says Shankar.

Also compelling is the ability of the partnership to offer wary consumers a package that combines data and content, and to create bargain offers. Normal monthly subscription is set at Rp 39,000 per month or Rp 199,000 annually — just $2.64 and $13.5 respectively. In the first two months, the introductory offer is just Rp20,000 ($1.4) and comes bundled with dozens of a gigabytes of data. (A pre-launch offer included monthly access at RP15,000 and 39GB of data.) Packages are available via one, three, six and 12-month subscription plans, Hantoro explains. The platform is accessible via the website, Android and iOS smartphones, and Android TV.

“We want to give our customers a sense of comfort in enjoying world-class content without worries on data usage. We want to ensure Indonesian users [develop] sustainable behavior, and enjoy Disney Plus Hotstar in the long-term,” Hantoro said.

The launch comes at an interesting moment. Even before the coronavirus gave OTT a boost, streaming services were beginning to take off in Indonesia in a fashion that had eluded more conventional pay-TV models. The country recently stood up to western tech firms and introduced a requirement that streamers collect value added tax in the same way that local broadcasters do. And Telkomsel unblocked Netflix, which in its early days was seen as an upstart foreign invader.

The recent demise of two regional streaming rivals, Hooq and Iflix (acquired by China’s Tencent) may give Disney Plus Hotstar an opportune moment to launch. But a host of nimble local and regional platforms will be ready to step in should the heavyweights misstep.