Despite the booming market for video-streaming services brought about by the Covid-19 pandemic, Southeast Asia-based streaming site Hooq formally closed down its operations on Thursday, April 30.
Based in Singapore as a start-up joint venture between the SingTel Group, Sony Pictures, and Warner Brothers, Hooq was pushed hard in the Philippines by Globe Telecom, which is partly owned by Singtel.
Hooq was also led from its inception five years ago by Australian expat Peter Bithos, who also served as chief operating officer of Globe from 2010 to 2015.
In a message posted at LinkedIn on the day of the Hooq’s shutdown, Bithos acknowledged the employees and partners who helped the company tackle the challenges it encountered over the last five years.
As chief executive of Hooq, Bithos said he faced and experienced “many challenges and successes” as well as “many failures” . “None of this journey would have been possible without the belief, commitment, and hard work of many of you. We have all risked together, celebrated our successes together and pained under our failures together,” he said.
At its peak, Hooq had 240 employees and over 80 million registered users in the Philippines, Singapore, Indonesia, Thailand, and India. With a mission of bringing a “million stories to a billion people” across Asia and beyond, Hooq had big dreams of becoming the pre-eminent video streaming service to emerging markets globally.
But it struggled and eventually succumbed to global competitors like Netflix who became successful in penetrating emerging markets like Southeast Asia.
By using a subscription video-on-demand (SVOD) and advertiser video-on-demand (AVOD)models, Hooq’s strategy was to showcase original content produced from countries in the region. Unfortunately, the platform was unable to keep up with increasing content and operating costs which are usually the greatest challenges of upstart independent distribution platforms.
The financing problem of Hooq stemmed from the fact that its model was deemed unsustainable, with investors having trouble with their returns. The company was able to reach a total funding of $95 million, with the last pump in 2018 (around $25 million) and no publicly announced funding following after.
Aside from operating in a highly fragmented market like Asia, the platform had difficulty persuading advertisers to make the shift from conventional television. Most TV advertisers were alienated from the metrics introduced by the streaming platforms, according to industry observers.
Although Hooq had subscribers, relying on paid subscription revenues did not cut it. Even with a great number of daily active users, streaming companies were only able to capture less than 5% of TV ad revenue.
It also did not help that many consumers in the Asian region, especially the Philippines, are used to free content from platforms like YouTube. Even Netflix had to adopt extremely cheap prices for subscriptions (the lowest at P149) and ad-supported models, to penetrate a country with this content-consumption behavior.
While Netflix and fellow streaming giant Amazon Prime have the ability to fare way better, companies in the league with Hooq are in danger. They include iflix, Genflix, and Viu.
Unlike Hooq, Netflix has already been in the process of adding locally-produced content in their catalogues like the 180 originals from Southeast Asian countries. Viu, meanwhile, is collaborating with Discovery and is going heavy on investments for Viu Originals to remain relevant to its target audience.
Still, the sudden exit of Hooq comes as a shock to many since, right at the start of 2020, the company had expressed its plans to expand its footprint in the region.