(Bloomberg) — Vidio, Indonesia’s answer to Netflix Inc., is aiming to double its paid subscribers to 8 million in the next two to three years ahead of plans to go public in a market where streaming still has much room to grow.

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The company, owned by Indonesian media conglomerate PT Elang Mahkota Teknologi Tbk, is also planning to raise a new fund this year to bankroll the growth of its streaming service, Chief Executive Officer Sutanto Hartono said in an interview. Vidio will push for an initial public offering once market sentiment becomes more positive, he said.

Indonesia is one of the fastest-growing economies in Asia, with a youthful population of over 270 million. But the digital media sector is still in its infancy, as free-to-air TV remains dominant and 5G penetration low. As such, Vidio and foreign competitors including Netflix and Hong Kong’s Viu see huge potential for growth in the country.

Total online video revenue in Indonesia is expected to grow to $2.25 billion by 2028 from $1.3 billion last year, according to consultancy Media Partners Asia. Meanwhile, the overall economic impact of Indonesia’s film and TV industry is estimated to expand to around $10 billion by 2027, a 20% increase from 2022, according to research conducted jointly by consultancy PwC and the University of Indonesia.

“In the past, Indonesia was always a sexy market for a lot of global players because of the population,” Hartono said.

However, he cautioned that Indonesia also poses many challenges.

Among these are low subscription prices in a market where ad-dependent platforms like TikTok and YouTube prevail, making it harder for global streamers with premium subscription models to crack the market.

Some global streamers have already stepped back from the country. Walt Disney Co., for example, paused its investment in content in Indonesia and increased its subscription prices late last year. Amazon.com Inc. has also retrenched from the market as part of a broader global restructuring.

Netflix however is still investing in Indonesia, following the popularity of its original series Cigarette Girl in November, which also became one of the most-streamed shows in countries such as Mexico and Spain. The US streaming giant plans to release six new original productions in Indonesia this year, with the goal of eventually catching up to regional content powerhouse Thailand, said Malobika Banerji, senior director of content for Southeast Asia at Netflix.

“We are already seeing very promising signals, and the task for us is to make this more consistent drumbeat,” Banerji said. “But first, we want to make massive and big hits in the local industry.”

According to 2023 data from Media Partners Asia, Vidio had the highest number of paying subscribers in Indonesia and a 17% share in streaming revenue, second only to Netflix, which charges more. Vidio said it’s also drawing about 20 million monthly active users for its free ad-based streaming service.

Vidio, which launched in 2014, is focusing on sports to drive more paid subscribers and shift habits from watching live sports on TV to watching on digital platforms. European football, especially the English Premier League, is a big draw in Indonesia but the company has also streamed other major sporting events like the Asian Games held in Jakarta in 2018.

Vidio is also known in Indonesia for producing shows the like crime drama Ratu Adil and sexual comedy series Open BO. It plans to expand production of originals to about 20 series a year, as well as films. Hartono said the company also has plans to tap into Indonesia’s TikTok-addicted audience by offering two- to three-minute-long series. It will protect its intellectual property by operating a 40-member anti-piracy control team with AI tools, he added.

But the major breakthrough for streaming platforms will come when the nationwide 5G rollout fully kicks in across Indonesia’s 18,000 islands over the next few years, Vidio said.

Vivek Couto, co-founder of Media Partners Asia, said that Indonesia has about 10 million 5G customers, and that could grow by 10 times over the next five years.

“It’s a key technology to help boost the streaming market growth outside Jakarta as most of the consumption is currently centered around the capital,” he said.

In the meantime, Vidio is partnering with local telecom providers and appliances makers to make sure its service is included in mobile bundling packages and on connected TVs. Indonesia is gradually building a digital ecosystem and it may take time to have customers’ commitment to subscription services, according to Hartono.

“But once you get it, there is a tipping point that it becomes like a lifestyle,” he said.

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