THE Philippines stands to attract more foreign direct investments (FDI) in the coming years, should it prove to be a haven with sound regulations and policies for the budding video-on-demand (VOD) sector, an expert said.
AlphaBeta Engagement Manager Konstantin Matthies said global VOD players—the likes of Netflix—will invest roughly $10.1 billion in Asia alone by 2022, $4 billion of which will be in the form of FDI.
This involves spending on core operations—equipment, transport, catering, marketing and hospitality—that transform into indirect spending and increased employment.
However, he noted that countries such as the Philippines should develop sound policies and regulations for the sector in order to attract digital companies to invest in it.
“If putting out regulations that make your market less attractive than the market next door, then that investment will follow the other market and be hurtful to the economy in the long run,” Matthies said in a video conference.
He said economies should adopt a “policy of collaborative approach” with VOD players, given the benefits provided by companies in terms of local content spending, international market access, capability building and partnership brokering.
There are many good examples of how countries can do this. For example, Taiwan has convened working groups with VOD players and local industry representatives to discuss key issues of concern and how to address them, he said.
Matthies added that there should be room for “flexible regulation.”
He said some of Asia’s most successful economies have created thriving digital sectors by simplifying regulation for technology companies and start-ups in the online VOD sphere.
“Given the rapidly evolving nature of the VOD industry, it is important to not develop regulations that may become quickly obsolete or are not consistent with the characteristics of the industry,” he said.
One key trap to avoid, Matthies added, is to “transplant” regulatory approaches of the traditional television and film industry to VOD, with local content quotas being a prime example.
Once these sound policies and regulations are in place, he said a country could benefit from the new players, as they are expected to build and finance production hubs, train people and strike global partnerships.