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  • MPA: APAC pay TV growth to slowdown 2016-2025

    MPA: APAC pay TV growth to slowdown 2016-2025

    MUMBAI: Slowdown. After years of dizzying speedy growth, the Asia-Pacific pay-TV industry is expected to grow at a very sedate average 5.8 per cent annually between 2016 and 2021, says leading industry analyst Media Partners Asia (MPA in its new report Asia Pacific Pay-TV & Broadband Markets, published today.

    MPA projects pay-TV industry sales across 18 major markets in APAC to climb from $54 billion in 2016 to US$72 billion by 2021, rising thereafter to US $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 has 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 instead to illegal services, as well as 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 a number of Southeast Asian markets.

    Commenting on the report, MPA executive director Vivek Couto said:

    “Pay-TV providers are increasingly focused on repackaging and re-pricing both linear and on-demand services. Local and regional Asian programming is also becoming increasingly important. At the same time, 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. 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. Increasingly, 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.”

    Ex-China, which remains a utility-oriented and highly regulated pay-TV market, Asia Pacific added 9.6 million net new pay-TV customers last year, the slowest pace of growth since 1997-98. MPA analysts project a spike to 10.4 million net additions ex-China this year, driven by government-mandated cable digitalization in India. Subscriber growth should decelerate again from next year onwards, moderating to between 4 million to 8 million net adds per annum between 2018 and 2022.

    Including China, MPA sees total pay-TV subscribers in Asia Pacific growing from 567 million in 2016 to 764 million by 2025. Adjusted for multiple connections in a household, pay-TV penetration in Asia Pacific will grow from 55 per cent of TV households in 2016 to 61 per cent by 2025.

    Digital pay-TV penetration in Asia Pacific will increase from 80 per cent of pay-TV subs in 2016 to 91 per cent by 2025, as pay-TV networks in most markets go 90-100 per cent digital, with the exception of India (70 per cent) and Pakistan (32 per cent) in the 18 markets covered in the report. HD penetration of digital pay-TV subs in Asia Pacific will grow from 30 per cent in 2016 to 46 per cent in 2025.

    The fastest growing segment within the Asia Pacific pay-TV industry over 2016-21 will be value-added services (VAS), driven by VOD, as revenues climb at an 11 per cent CAGR over the next five years. Australia, China, Japan and Korea will be the biggest markets for VOD revenue growth. Malaysia will lead amongst smaller markets.

    In standout pay-TV markets such as India and Korea, pay-TV subscription revenue growth will be driven by high volumes and a level of ARPU upside (partially offset by price competition). Higher yields will also boost subscription revenue growth in Hong Kong, Malaysia, the Philippines, Singapore and Vietnam.

    Pay-TV advertising will expand from US$11.6 billion in spend in 2016 to US$16.2 billion by 2021, with growth driven by markets with high levels of pay-TV penetration such as India and Korea, along with China. Meanwhile, pay-TV ad spend in Australia, Japan and Taiwan will remain material, although growth in each of these markets will soften. Malaysia and the Philippines will remain the standout markets for pay-TV advertising in Southeast Asia.

  • MPA: APAC pay TV growth to slowdown 2016-2025

    MPA: APAC pay TV growth to slowdown 2016-2025

    MUMBAI: Slowdown. After years of dizzying speedy growth, the Asia-Pacific pay-TV industry is expected to grow at a very sedate average 5.8 per cent annually between 2016 and 2021, says leading industry analyst Media Partners Asia (MPA in its new report Asia Pacific Pay-TV & Broadband Markets, published today.

    MPA projects pay-TV industry sales across 18 major markets in APAC to climb from $54 billion in 2016 to US$72 billion by 2021, rising thereafter to US $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 has 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 instead to illegal services, as well as 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 a number of Southeast Asian markets.

    Commenting on the report, MPA executive director Vivek Couto said:

    “Pay-TV providers are increasingly focused on repackaging and re-pricing both linear and on-demand services. Local and regional Asian programming is also becoming increasingly important. At the same time, 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. 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. Increasingly, 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.”

    Ex-China, which remains a utility-oriented and highly regulated pay-TV market, Asia Pacific added 9.6 million net new pay-TV customers last year, the slowest pace of growth since 1997-98. MPA analysts project a spike to 10.4 million net additions ex-China this year, driven by government-mandated cable digitalization in India. Subscriber growth should decelerate again from next year onwards, moderating to between 4 million to 8 million net adds per annum between 2018 and 2022.

    Including China, MPA sees total pay-TV subscribers in Asia Pacific growing from 567 million in 2016 to 764 million by 2025. Adjusted for multiple connections in a household, pay-TV penetration in Asia Pacific will grow from 55 per cent of TV households in 2016 to 61 per cent by 2025.

    Digital pay-TV penetration in Asia Pacific will increase from 80 per cent of pay-TV subs in 2016 to 91 per cent by 2025, as pay-TV networks in most markets go 90-100 per cent digital, with the exception of India (70 per cent) and Pakistan (32 per cent) in the 18 markets covered in the report. HD penetration of digital pay-TV subs in Asia Pacific will grow from 30 per cent in 2016 to 46 per cent in 2025.

    The fastest growing segment within the Asia Pacific pay-TV industry over 2016-21 will be value-added services (VAS), driven by VOD, as revenues climb at an 11 per cent CAGR over the next five years. Australia, China, Japan and Korea will be the biggest markets for VOD revenue growth. Malaysia will lead amongst smaller markets.

    In standout pay-TV markets such as India and Korea, pay-TV subscription revenue growth will be driven by high volumes and a level of ARPU upside (partially offset by price competition). Higher yields will also boost subscription revenue growth in Hong Kong, Malaysia, the Philippines, Singapore and Vietnam.

    Pay-TV advertising will expand from US$11.6 billion in spend in 2016 to US$16.2 billion by 2021, with growth driven by markets with high levels of pay-TV penetration such as India and Korea, along with China. Meanwhile, pay-TV ad spend in Australia, Japan and Taiwan will remain material, although growth in each of these markets will soften. Malaysia and the Philippines will remain the standout markets for pay-TV advertising in Southeast Asia.

  • Digital penetration of pay-TV subs in APAC to reach 90% by 2023: MPA

    Digital penetration of pay-TV subs in APAC to reach 90% by 2023: MPA

    MUMBAI: The Asia-Pacific pay-TV industry will grow at a 6.6 per cent average annual rate from 2014 to 2019, according to a new report, Asia Pacific Pay-TV & Broadband Markets, released by Media Partners Asia (MPA).

     

    MPA projects industry sales to climb from $52 billion in 2014 to $72 billion by 2019 and to $84 billion by 2023. Despite robust growth, the region’s pay-TV industry is under pressure however, as the pace of both subscriber and revenue growth decelerates.

     

    In Southeast Asia, a significant slowdown in Indonesia and Thailand will apply the brakes to regional momentum, partially offset by significant expansion in the Philippines and decent gains in Malaysia.

     

    Revenue growth will be at its most robust and scalable in large territories such as India, Korea and China as well as smaller markets such as Hong Kong and the Philippines. Australia will offer much improved subscriber momentum, although revenue expansion will lag.

     

    Ex-China, which remains a utility oriented and highly regulated pay-TV market, Asia added10.8 million net new pay-TV customers in 2014, slower than the 11.2 million added in 2013 and significantly slower than the average 15-18 million net additions that occurred between 2008-11.

     

    MPA projections indicate a spike in net additions will occur in 2016, due to India’s next phase of cable digitalization, with a steady deceleration likely to follow. Including China, MPA sees total pay-TV subscribers in Asia-Pacific growing from 500 million 2014 to 598 million by 2023.

     

    Adjusted for multiple connections in a household, pay-TV penetration of TV households will grow from 54 per cent in 2014 to 61 per cent by 2023. In Asia ex-China, adjusted pay-TV penetration is expected to grow from 55 per cent to 60 per cent over the same period.

     

    Digital penetration of pay-TV subs in Asia-Pacific will increase from 70 per cent in 2014 to 90 per cent by 2023 as all major pay-TV markets covered in the report go 100 per cent digital except for India (70 per cent),Pakistan (32 per cent), Sri Lanka (94 per cent), and Thailand (53 per cent).

     

    HD penetration of total digital pay-TV subs will grow from 24 per cent to 44 per cent over the same period, with penetration between 50-90 per cent in Australia, China, Korea, Japan, Malaysia, New Zealand, the Philippines and Singapore.

     

    Over 2014-19, value-added services (VAS), driven by VOD, will be the fastest growing segment for Asia’s pay-TV industry, as revenues climb at a 13.2 per cent CAGR from 2014-19.Key market drivers of VOD include Australia, China, Japan and Korea, while Malaysia and Hong Kong lead amongst smaller markets.

     

    MPA projects that authenticated TV Everywhere (TVE) services will not generate meaningful revenue but remain a churn reducer in most markets.

     

    In standout pay-TV markets such as India and Korea, a combinationof high volume and a level of ARPU upside (partially off set by price competition), inaggregate, will drive subscription revenue growth. Higher yields will also boost growth in Hong Kong, Malaysia, the Philippines and Vietnam.

     

    According to MPA, pay-TV advertising will grow from $10 billion in 2014 to $14.3 billion by 2019, with growth driven by high base markets such as India and Korea along with China. Australia, Japan and Taiwan will remain material, although growth in each of these markets will soften.

     

    The pay-TV ad opportunity in Southeast Asia will remain under-exploited, partially due to limited penetration in most markets, but also because of poor execution.

     

    MPA executive director Vivek Couto said, “Pay-TV operators are striving to either reignite growth or sustain existing momentum with a new cycle of value creation. A number of operators are repackaging products with improved price points (i.e. Australia), tiering (i.e. Hong Kong) and slimmer, low-ARPU packs (i.e. Philippines). Most players have invested to enhance programme windows and offer more VOD. Others are climbing the curve of product innovation with all-HD platforms, with more local and Asian content, as well as live sports, a key mainstay for pay-TV.”

  • Digitisation to propel pay-TV revenue to $17 billion by 2017 , MPA report

    Digitisation to propel pay-TV revenue to $17 billion by 2017 , MPA report

    MUMBAI: Propelled by the government’s digitisation drive, pay TV revenues in India are projected to reach $17 billion by 2020 as opposed to the $7.8 billion in 2012, according to a new report by Singapore-based pay-TV research firm Media Partners Asia (MPA).

    According to India Pay-TV & Broadband Markets, pay TV revenues are expected to grow at a compounded annual growth rate (CAGR) of 11.4 per cent from 2012-17 and 10.2 per cent between 2012 and 2020.

    MPA forecasts indicate that total digital pay-TV homes will grow from 47 million in 2012 to 110 million by 2017 and 130 million by 2020.

    The digital penetration of total pay-TV homes in the country is expected to double to almost 70 per cent by 2020 from 35 per cent in 2012. The digital pay-TV penetration of TV homes in India will grow from 28 per cent in 2012 to 54 per cent by 2017, and reach 60 per cent by 2020.

    On the other hand, the total pay-TV homes are expected to grow from 128 million 2012 to 167 million by 2017, and 183 million by 2020. Pay-TV penetration of TV homes will grow from 80 per cent to 85 per cent between 2012 and 2020, adjusted for multiple connections in a household.

    This implies that the pay-TV industry will remain in a prolonged investment mode, with significant capital intensity. With two more phase of digitisation to go, both DTH and cable operators already have high levels of debt. The majority of additional funding will have to come through equity, via IPOs and M&A, the MPA report states.

    “A successful start for the roll-out of digital addressable systems (DAS) has revived interest in pay-TV among strategic and financial investors,” says MPA executive director Vivek Couto.

    “The real benefits will become clearer in 2H 2013 and beyond, as multi-system operators (MSOs) drive addressability and work with last mile local cable operators (LCOs) to ramp up tiering, billing and collections. Regulators are committed to curbing delays in the next phases of DAS, while the DTH industry is keen to revive growth by capitalising on digital transition.”

    Cable impact: Over the medium term, the majority of cable investments will be directed towards digital infrastructure, helping to build operator scale and improved addressability. In the long run, investments will be more focused towards acquiring primary subscriber points and the expansion of high-ARPU products such as broadband and HDTV.

    According to MPA, the total proportion of cable households with DAS climb from 15 per cent in 2012 to 50 per cent by 2020.

    DTH growth: In the DTH space, concerns focus on the growth of active subs (i.e. paying customers, net of churn and subscriber suspension), which has moderated in recent times. MPA says that the growth in active subs will rebound however, as more markets undergo analog switch-off. MPA forecasts indicate that active DTH subs will grow from 32 million in 2012 to 64 million by 2017, and 77 million by 2020.

    Broadcasters: Subscription fees for pay-TV channels crossed US$1 billion in 2012, driven by the growing strength of aggregators. This growth has yet to factor in digitalisation, which will result in a bigger share of subscription revenue for broadcasters. Operating margins will remain under pressure in the short-to-medium term, due to heavy investments in content for existing channels and gestation losses on new channel launches.

    MPA expects total pay-TV channel revenues, including advertising and subscription to grow from $3.6 billion in 2012 to $6.6 billion by 2017 and to $8.6 billion by 2020. The pay-TV ad market is expected to grow at a 10 per cent CAGR over 2012-20, while broadcaster subscription revenues are expected to grow at 15 per cent over the same period.