Netflix and Disney in Taiwan: A Small Country Should Concentrate on Its Strengths

Netflix and Disney are now going head-to-head in Taiwan. It looks as though foreign giants have essentially taken over Taiwan’s OTT market… The logic is similar to Taiwan’s online advertising market, which is essentially an oligopoly dominated by Google and Facebook. Considering monthly fees together with the quality and quantity of films, the player with the largest online user base is difficult to dislodge at this stage. It seems clear that foreign giants see Taiwan as an incremental market. With a sufficiently large US base to sustain the core business, many other countries are additional markets. Under these competitive conditions, Taiwanese companies have a difficult time. A somewhat similar case is domestic cars. Remove the protective shield of tariffs, and domestic cars have been losing ground steadily in recent years. Imported models keep moving to new generations and updated designs, while local manufacturers often have to consider whether they have amortized the previous tooling. Suppose one model’s tooling needs a production volume of 100,000 cars to spread its cost, but annual sales are only 10,000–20,000. It becomes very hard for domestic manufacturers to compete. Returning to the point: Taiwan is a small country with a small population. We do not need to do everything. Think about our core and comparative advantages. Abandon the mindset of a large country that wants to have it all. Concentrate critical resources on our strengths—areas that other countries cannot easily enter.