Netflix Streaming Service: a Substitute or Addition to Cable TV?


Like a new breed, Netflix arrived in Indonesia to offer streaming service that will compete indirectly with similar services, such as streaming TV, online TV, or even traditional cable TV.

This American multinational provider of on-demand Internet streaming media has announced its global expansion in more than 130 countries, including Indonesia. Netflix is a global media network that enables its customers to watch thousands of videos in the form of movies, TV series, and special shows over the Internet, without having to follow the network schedules or buy an extra equipment.

Netflix's Target Market

“I really like watching TV shows, because it is an affordable entertainment for the weekend. So, I usually buy (pirate) DVDs that are sold Rp 7000 a piece near my house,” says Rina, who does not really care if those fake DVDs have poor quality and would not last as a collection.

[Read also: Weekend Budgeting Tips]

The demand for this type of movie entertainment is pretty high in Indonesia, and one cannot help but notice how easy it is to find fake DVDs in public places. However, with the growth of technology and the limited access and storage for these products, many people started to look for an alternative to enjoy entertainment whenever and wherever they want it. People are using their tablets and smartphones to watch YouTube videos or movies from streaming TV app like Viki, Mivo TV, et cetera.

They are the target market of Netflix, supported by statistical data showing that the number of Internet users in Indonesia has reached around 80 million. Well, are you also thinking of trying out streaming services like this?

There are a couple of things you need to consider before deciding to subscribe to Netflix:

  1. Netflix subscription fee is not cheap, because it will cost Rp 109,000-Rp 169,000 a month, not including the Internet subscription. Put this expense into your entertainment a.k.a. “fun” budget every month. Make sure the total is not more than 30% of your income.
  2. A streaming service is like a digital DVD rental business, which means you cannot download the movies and watch them offline. Netflix is always updating its collection from time to time, so you cannot be sure that you will be able to watch the movies that are available today in the future.
  3. Netflix provides geo-restricted content, so you cannot expect every TV series that are released in the United States will be available in Indonesia – unless you are using a virtual private network (VPN). In the contrary, viewers in Asia can get more selections of K-drama, J-drama or Asian TV series compared to the other continents, if there is market demand.
  4. You can get the best viewing experience with Netflix if you have an HDTV, Smart TV, or at least a TV that is HD ready, along with one device that be connected through an HDMI port, i.e. a computer, laptop, tablet, or smartphone. If you still need to buy an HDTV or a tablet, that means extra spending for you. See the example of a Smart TV product and the price here.

Estimate of Internet Data Usage and Cost for Video Streaming

Knowing that Netflix can be viewed on almost all types of laptops, tablets, game consoles, and smartphones, you might feel the urge to access video streaming through Netflix app on your mobile devices, e.g. while you are stuck in a traffic jam, or waiting in line.

Before you get shocked by your Internet bill, here is an estimate of bandwidth use while watching Netflix:

  • 300MB per hour for each stream of low quality video – below Standard Definition (SD)
  • 700MB-1GB per hour for each stream of SD video
  • 3GB per hour for each stream of High Definition (HD) video
  • 7GB per hour for each stream of Ultra HD video

According to our rough estimation, if you are watching two hours of movies or TV shows on Netflix every week using your volume-based Internet plan from your GSM provider, you would need between 5.6GB and 8GB data a month. Based on price comparison of Internet plan from Simpati, XL, Indosat Ooredoo, and Smartfren, you will need to set aside around Rp 120,000-Rp 228,000 to get that amount of quota.

With that in mind, it is better to brush off the impulse of viewing Netflix by using your mobile Internet plan, even if you have already purchased an unlimited Internet plan. Video streaming will eat up your data cap, make you quickly hit the fair usage policy (FUP) limit, and have your Internet speeds reduced drastically. After that, you would lose your patience – even when you are opening emails or using a GPS-based application.

If you want to access Netflix app, we would suggest you to use a cable Internet that comes with unlimited bandwidth, at a minimum speed of 5 Mbps. You can compare the speed of your mobile Internet and cable Internet by using a Speedtest app on your iOS or Android device. The price of Internet broadband plan is starting from around Rp 260,000, e.g. like the one offered by MyRepublic, a new Internet service provider from Singapore.

Netflix vs. Cable TV

Before the rise of Internet streaming services, the most practical way to watch TV shows and box office movies is by subscribing to a cable package. The number of cable companies is increasing and they are competing to attract new customers, which in the end making their price more affordable for us.

The price of cable packages is really based on your selection, but it is better to choose a cable company that has received good reviews on customer service, because once you subscribe to a cable package, you will need to maintain it for a year – unless you do not mind paying penalty fees.

Big TV offers more channels compared to the other cable providers – around 170 channels. Meanwhile, Indovision is an old player in this industry, which would ensure a stable network quality and decent customer service. For sport fans, especially soccer, Orange TV would be a suitable alternative, because it has more soccer channels compared to the other cable providers in Indonesia.

Price of Cable TV Packages in Indonesia*

    

 
Cable TV Provider Access Quality Screens Price
Indovision TV + 1 mobile device SD, HD TV, PC, Laptop, Tablet Rp 169k - Rp 269k
First Media TV + 1 mobile device SD, HD TV, PC, Laptop, Tablet Rp 279k - Rp 709k
Orange TV TV + 1 mobile device SD TV, PC, Laptop, Tablet Rp 99k - Rp 319k
Big TV TV SD, HD TV Rp 128k - Rp 353k
Nexmedia TV SD, HD TV Rp 95k - Rp 170k

At the moment, almost all cable television providers offer combo package with broadband Internet connection. Moreover, some companies are trying to answer the market demand by giving additional features, i.e. record, rewind, pause and play, or access to watch TV shows from a mobile device, e.g. First Media GO or Indovision Anywhere.

“I do not need to subscribe to Netflix, because I can also watch YouTube videos or browse the Internet on TV using my cable service at home,” says Alex, who has subscribed to a combo package from First Media.

Let’s see some advantages and disadvantages of having cable TV and on-demand Internet streaming services (Netflix):

Comparison of Cable TV and Netflix*

    

 

Quality Type of entertainment Area of Network Price
Cable TV SD, HD Live broadcast, news, films (with TV commercials). Subtitle in Bahasa Indonesia is available. Based on coverage, doesn't need internet Rp 95k- Rp 709k (one year of minimum subscription)
Netflix SD, HD, Ultra HD TV shows, box office movies, Netflix original content (without commercials). Subtitle is currently not available in Bahasa Indonesia. Anywhere in Indonesia, need internet Rp 109k- Rp 169k (users can subscribe and cancel subscription anytime)

*All prices are correct when this article was written and are subject to change without prior notice.

[Read: Comparing the Price of Internet Plan and Cable TV]

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