The Asia-Pacific pay-TV industry will grow at a 5.8% average annual rate from 2016 to 2021, according to a new report, Asia Pacific Pay-TV & Broadband Markets, published by Media Partners Asia (MPA).
MPA projects pay-TV industry sales across 18 major markets in Asia Pacific to climb from US$54 billion in 2016 to US$72 billion by 2021, rising thereafter to $81 billion by 2025. The pace of pay-TV subscriber and revenue growth is slowing however, weakened by an economic slowdown and increasing competition from both legal and illegal alternatives. Pay-TV subscriber growth declined or substantially decelerated in Hong Kong, Indonesia, Malaysia and Singapore in particular.
At the same time however, India and Korea remain two of the region’s largest and most scalable pay-TV opportunities. Revenue growth will also accelerate in Australia and the Philippines, largely thanks to subscriber growth.
However, MPA analysts have lowered subscriber growth forecasts across much of Southeast Asia, especially for Indonesia, Malaysia and Singapore, although ARPU (average revenue per user) should remain resilient in both Malaysia and Singapore.
The pay-TV industry in China, meanwhile, remains the largest in the region and is becoming increasingly digitalized. Pay-TV growth opportunities for broadcasters are limited however, due to increasing regulation as well as competition from free and paid online video services.
Elsewhere in the region, subscription-based video-on-demand (SVOD) services have had a negligible impact on pay-TV so far, despite the global launch of Netflix earlier this year, in addition to increasing competition among lower-priced regional and local SVOD services.
Most pay-TV subscribers downgrading or canceling pay-TV services are moving to illegal services, and to free, ad-supported options across both TV and online video.
At the same time, more pay-TV operators are rolling out connected set-top boxes that can incorporate OTT video services. In addition, some operators (telcos in particular) are aggressively hard-bundling video content, including pay-TV channels, with high-speed broadband. This is helping drive subscriber growth, especially in some Southeast Asian markets.
“Pay-TV providers are increasingly focused on repackaging and repricing both linear and on-demand services. Local and regional Asian programming is also becoming increasingly important. Sports, kids, infotainment and Hollywood movies will remain mainstays of the pay-TV bundle, although channels offering Hollywood TV series are being disrupted by both legal and illegal OTT,” said Commenting on the report, MPA executive director Vivek Couto.
“Few pay-TV operators have been able to capture or monetize large-scale online video viewing so far, although early results in Hong Kong and Korea are encouraging. The goal is driving the next cycle of customer growth and consumer spend. Pay-TV user interfaces and data analytics are improving, although often too slowly to effectively compete with legal and illegal OTT rivals. Viable pay-TV operators will become drivers and targets for M&A and consolidation, as the worlds of pay-TV, broadband and OTT collide and converge in the wider context of media and telecoms.”