Huawei has launched an ad-free video streaming service, called Huawei Video, in Spain and Italy this week. Huawei video will be pre-installed on its Honor branded smartphones and tablets, with owners able to access its catalogue of films and TV shows, either by paying a €4.99 monthly subscription fee or €2.99 per title for 48-hour rental. There is also a free one-month trial to encourage owners to subscribe. Subscribers benefit from a reduced €1.99 fee on the rental catalogue. In Spain for example, content offered on Huawei Video originates from local programmers including RTVE, PlayZ, Atresmedia, Flooxer and iab.es. Over time Huawei intends to make the app available on other devices beyond its own-branded mobile devices, recognizing correctly that in most advanced broadband markets multi-screen access (PCs and Smart TVs) is table stakes. Huawei has also stated its desire to refresh and update content on Huawei Video on a regular basis – positioning it as a weekly video magazine to encourage users to access the app on a regular basis. Huawei claims that its research showed the lack of fresh content on Netflix is a pain point for customers, so fresh content is being touted as one of Huawei Video’s main USPs – assuming it is sustainable.

Huawei Video will benefit from its pre-installation on Huawei smartphones and tablets. Huawei has the third largest share of smartphone sales in Western Europe after Apple and Samsung and likewise for tablets. Given the success Apple has achieved with its ecosystem of services (including iTunes, App Store, and Apple Music, etc.) it’s no surprise that Huawei is aiming to achieve similar goals outside of China, albeit on a more limited scale. It is worth noting Huawei is for now playing it safe in markets relatively untapped by international players, including Netflix which has produced only a few original contents and has gained a limited amount of subscribers (see our upcoming forecast for Netflix subscribers by key countries). Huawei also hopes to strengthen its device market share as Europe is a priority in the light of the U.S. ban.

However, competition in the digital video space remains intense. The TV industry is in a state of flux, with studios, networks, and TV operators (paid and free-to-air) addressing internet-based viewing with their own direct-to-consumer propositions to compete with Netflix, other Subscription VOD services (see Disney Seeks to Reshape Itself with 21th Century Fox Acquisition) and virtual MVPDs (such as AT&T’s DIRECTV NOW and Watch). At the same time a number of video propositions targeting mobile-centric audiences, e.g. Verizon’s Go90, Vivendi’s Studio+ and Samsung Milk Video, have all been shuttered due to limited uptake combined with unsustainable high costs of acquiring and licensing content. Furthermore, without a strong consumer facing brand for video content Huawei Video will likely struggle to get noticed in the crowd. 

Huawei’s efforts to monetize its users by offering content services must be applauded despite these clear challenges – the focus on distributing content from local partners, monthly pricing at the €5 per month sweet spot (and a discounted price for video rentals for subscribers), along with content that is refreshed on a weekly basis are good differentiators. Whether it is enough for Huawei Video to succeed where others have failed remains to be seen, but at least Huawei is showing ambition.