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Tag: MPA REPORT

  • MPA report: Content investment in seven APAC markets grew four per cent in 2023

    MPA report: Content investment in seven APAC markets grew four per cent in 2023

    Mumbai: Media Partners Asia’s (MPA) 2024 Asia Video Content Dynamics report offers a comprehensive analysis of content investment, engagement, and viewership across TV, VOD, and theatrical sectors in seven key APAC markets: India, Korea, Indonesia, Philippines, Singapore, Thailand, and Vietnam.

    The report reveals that content investment in these markets reached $15.5 billion in 2023, marking a four per cent year-on-year increase. This growth, while positive, represents a significant slowdown from the 2021-22 period, reflecting a post-COVID normalization of budgets and a rationalisation of local content investment in streaming VOD. India led the charge with a robust 12 per cent growth, driven primarily by sports content, while Indonesia followed with a solid five per cent increase. Korea, the Philippines, and Thailand managed modest gains, whereas Malaysia and Vietnam experienced contractions due to challenging advertising markets.

    Korea and India continue to dominate the landscape, collectively accounting for 80 per cent of total content investment in 2023. Korea, a mature market, is expected to see flat overall growth, with expansion in streaming and film offset by TV’s secular decline. In contrast, India, with its relatively low 52 per cent TV household penetration, presents significant growth potential across all verticals through 2028. MPA projects that India will surpass Korea in total content investment by 2026.

    Looking ahead, MPA forecasts a 2.7 per cent CAGR in total content investment across the seven markets, reaching $17.2 billion by 2028. This growth will be predominantly driven by India, with Indonesia and the Philippines also expected to show decent growth rates. Korea and Thailand are anticipated to experience limited growth, while Vietnam faces the most challenges due to weak TV advertising and rampant piracy.

    The investment landscape is evolving, with TV (free-to-air and pay) still commanding the lion’s share at 64 per cent in 2023, followed by streaming at 26 per cent and film at 10 per cent. By 2028, TV is projected to retain over 50 per cent of industry investment, while streaming is expected to increase its share to 33 per cent, with film marginally growing to 11 per cent.

    MPA vice president Stephen Laslocky offered insights on the shifting content dynamics:

    “Korean content continues to lead the pack with world-class production values and compelling storytelling, though we’re seeing online original content costs inflate to as much as US$7 million per episode. Its extraordinary appeal is evident, accounting for over 30 per cent of content demand in Southeast Asia and Taiwan. The rise of streaming has significantly elevated storytelling and production quality, particularly in Thailand and Indonesia, where competition is intensifying. We’re seeing content from these countries, especially Thai titles, gaining traction across Asia.

    It’s become clear that many traditional TV drama producers are struggling to compete with higher-end streamed video content. In contrast, quality film producers have embraced the flexibility of streaming and adapted with greater ease. Over the past year, as some ad revenues have permanently shifted to digital and streaming behaviour has become entrenched, we’ve observed TV production margins contracting across most markets. For online originals, streamers have become much more disciplined in their approach to budgeting and content strategy.”

    The report also highlights significant trends in online video consumption. YouTube leads with over a billion monthly active users across the surveyed markets, with 732 million in India alone. TikTok has emerged as a formidable competitor in Southeast Asia, boasting 211 million total monthly active users across Indonesia, Malaysia, Philippines, and Thailand.

    In the premium VOD space, Netflix maintains a strong lead in most markets, capturing between 40-70 per cent of viewership in Korea, Indonesia, Malaysia, and the Philippines. However, it faces stiff competition in Thailand from TrueID and in India from Disney+ Hotstar and Jio Cinema. Local players like Indonesia’s Vidio are also making their mark, while regional platforms such as Viu are leveraging Korean content and strategic partnerships to strengthen their positions.

    The theatrical sector is still in recovery mode, with superhero franchise fatigue and Hollywood strikes delaying a return to pre-pandemic levels in most markets. India has already bounced back, with 2023 box office revenues exceeding 2019 figures. Other markets, excluding Korea, are expected to recover over the 2025-28 period. An emerging trend in film distribution sees a shift towards revenue-share models for internationally appealing titles, presenting new opportunities for Korean and Thai producers in particular.

    As the APAC content landscape continues to evolve, the interplay between traditional and emerging platforms, coupled with changing consumer behaviours, will shape the industry’s future. The MPA report underscores the dynamic nature of the market and the critical importance of adaptability and strategic investment in driving growth across the region.

  • Streaming in APAC ups revenue by 14% in 2020: MPA report

    Streaming in APAC ups revenue by 14% in 2020: MPA report

    NEW DELHI: Coronavirus may have been like a catastrophe on many levels but it did precipitate an adoption of digital at an unprecedented rate. Consumers starved for entertainment thronged to video streaming platforms, forking over money for premium content. In fact, the Asia Pacific online video industry upped its revenue by 14 per cent in 2020 to reach $30.5 billion, said Media Partners Asia (MPA) in its Asia Pacific Online Video and Broadband Distribution report released on Monday.

    Subscription video-on-demand (SVoD) overtook the advertising video on demand (AVoD) to contribute 53 per cent of the total revenue in 2020. The trend is expected to continue and the total online video revenues would grow at a CAGR of 12 per cent to reach $54.5 billion by 2025, with subscription contributing 57 per cent and advertising 43 per cent, it stated.

    The comprehensive report published by MPA reviews the drivers shaping the fast-moving online video and telecoms industries across 14 Asia Pacific markets with analysis of online video subscribers, advertising and subscription revenues, among others.

    “During 2020, the Covid2019 pandemic created a work-from-home environment that scaled the adoption of online services, including SVoD. The average number of such services subscribed by customers outside of China grew through 2020, reaching 3.8 in Australia and Japan and 2.8 in markets such as India and Southeast Asia,” said MPA executive director Vivek Couto.

    He said that the subscriber growth will decelerate in 2021 and the production of new content will remain impacted in the first half. But the scale and velocity of investment in premium content should ensure that net new customer additions will remain robust over the medium term. “Moreover, profitability should grow more rapidly than revenues and subscribers as online businesses scale. This is particularly true in larger markets such as Australia, China, Japan and Korea,” he added.

    According to the report, the landscape for SVoD looks promising in the emerging markets of India and Southeast Asia. But it is still being shaped because of growing competitive intensity with increased investment in content and distribution. Theatrical windows are narrowing for online video operators while key genres are moving rapidly and exclusively online. ARPUs will remain compressed as platforms scale in India, it said.

    “The future will also see more distribution deals with mobile, fixed broadband, pay-TV and smart TV operators to drive consumption and payment on small and big screens. Evolving regulations may impact content creation and investment as governments look to introduce censorship and impose content quotas,” said Couto.

    MPA’s analysis further shows that 13 online video operators accounted for more than 70 per cent of Asia Pacific online video revenues in 2019, generating $21.1 billion in aggregate.

    Netflix has built a strong business in Asia Pacific. Amazon Prime Video is successful in India and Japan and is surging in Australia. Disney’s global SVOD expansion has been a success to date. Its subscribers in India are low-ARPU but the platform could secure more than 80 million subscribers in India if it can retain key sports rights and continue to invest in local originals, said the report.

    The launch of Disney+ Hotstar in Indonesia has met with early success, especially in terms of reach and paid subscribers. The core Disney+ service has succeeded in Australia and New Zealand and is growing in Japan. These markets will benefit from the launch of Star (as part of Disney+) in 2021 as access to series and movies from ABC, Fox and FX brands should help drive customer growth.

    Local broadcasters have moved online or are licensing to key OTT players, and in some cases, doing both.

    Southeast Asian regional major Viu has grown its SVoD business with Korean content and local acquisitions. In Indonesia, Emtek’s Vidio has passed one million paying subscribers with premium local content and sports rights. Line TV is Thailand’s largest AVoD platform after YouTube and Facebook. In Korea, a number of local platforms compete including Wavve, TVing, Coupang Play and Kakao TV Talk.

  • Sports media rights to soar 22% in 2018 in Asia Pacific: MPA

    Sports media rights to soar 22% in 2018 in Asia Pacific: MPA

    MUMBAI: The market value of sports media rights is set to reach US$5.0 billion in Asia Pacific ex-China this year, according to Asia Pacific Sports In The Age Of Streaming, a new report published by Media Partners Asia (MPA). The value represents a 22 per cent increase from 2017, lifted by rising demand for digital rights and market growth in India and Australia as well as this year’s Fifa World Cup. While sports remains the last bastion for pay-TV operators combating subscriber churn, OTT delivery is becoming the main driver of rights inflation, opening up fresh opportunities for rights-holders while adding new layers of complexity to negotiations and deals.

    “In our view, the value of sports media rights across TV has probably peaked in Asia Pacific with the notable exception of India, where the market for linear channels remains robust and scalable,” said MPA Senior Analyst Srivathsan AR, the report’s main author. “The proliferation of broadband is fueling the growth of online video platforms, with a number of players investing aggressively in sports rights.”

    Recent sports rights auctions suggest that online platforms currently contribute between 10-25 per cent of the media rights value for a sports franchise, MPA analysis concluded. The value of bundled broadcast and online rights today is typically anchored to a land-grab by media companies, telcos and digital platforms vying for pole position in a green-field segment with an attractive consumer proposition. Debates over the value of digital monetization relative to TV will only get more involved and complex over time.

    Broadcasters, Telcos and Pure-Play Digital Platforms

    The market for digital sports in Asia Pacific is broadly divided between: 1) Broadcasters with scalable distribution that are investing in digital rights for new and emerging platforms; and 2) Telcos and pure-play digital platforms that are monetizing tentpole rights through subscription, advertising and commerce.

    The first group notably includes Star India, which has established new benchmarks for digital-based sports consumption with Hotstar, its direct-to-consumer entertainment and sports platform that reached more than 200 million people during this year’s Indian Premier League (IPL) cricket tournament. BeIn Media Group, meanwhile, operates Asia Pacific’s largest pan-regional OTT sports platform, BeIn Connect, with a footprint covering Australia, Hong Kong, Malaysia, New Zealand, Indonesia, the Philippines, Singapore and Thailand.

    Digital platforms are also becoming more active. Notable examples in Asia include sports streaming specialist Dazn, which is close to breakeven in Japan after launching in August 2016, and global digital powerhouse Facebook, which is in the running to acquire exclusive English Premier League (EPL) football rights in Thailand and Vietnam following an agenda-setting but unsuccessful US$600 million bid for IPL cricket in 2017. Australian telco Optus, meanwhile, has invested close to US$300 million for two cycles of EPL football in Australia to drive customer acquisition and market share across its broadband services. Globally, Amazon has highlighted its own sporting ambitions, securing ATP tennis and a tranche of EPL football in the UK. “We expect bidding for live rights to escalate across the region over the next two years as sports-based digital platforms rive viewership, especially in large ad-dominated growth economies such as India and Indonesia as well as big mature markets such as Australia and Japan,” Srivathsan said.

    Leagues and Federations Consider Direct-To-Consumer Services

    Sports franchises are also experimenting with direct-to-consumer services, pioneered by the NBA with its own OTT offering NBA League Pass. Formula 1, the Liberty Media-owned motor sports series, has entered the fray with F1 TV, a live Grand Prix OTT subscription service that went live in certain European and American markets earlier this year ahead of future global expansion. In Asia Pacific meanwhile, Australia’s National Rugby League and Cricket Australia run their own services for fans outside the country. One Championship, the mixed martial arts property, has also launched a free ad-based digital service.

    “Many franchises share free highlights and archive content, although others are looking at more direct monetization, pioneered by the NBA League Pass,” Srivathsan said. “These services offer one-to-one and customized fan relationships that can drive engagement and merchandize sales. At the same time, small markets which are currently grouped alongside major markets in media deals may see better representation and consistency in delivery. NBA has also shown that a readymade service can help distribution partners augment their own packages rather than disrupt existing deals, although some leagues and federations may bypass traditional TV partners with their own direct-to-consumer plays.”

  • Despite roadblocks, India attains 48% digital pay-TV penetration in 8 years: MPA

    Despite roadblocks, India attains 48% digital pay-TV penetration in 8 years: MPA

    MUMBAI: Following a blitzkrieg of cable set-top box (STB) deployment, the digitisation process is taking a breather as operators shift focus from deployment to monetisation in order to ensure growth with profitability. 

     

    As per a recent Media Partners Asia (MPA) report, the pace of India’s pay-TV growth story may appear to be in trouble. However, the report also points out that the process of profitable digitisation typically takes 15-20 years. “In this context, for a market characterised by low average revenue per user (ARPUs), absence of tiering and fragmented last mile cable distribution, India has done well to attain 48 per cent digital pay-TV penetration in eight years,” the report highlights. 

     

    As the industry consolidates and regroups, the current phase of India’s pay-TV industry offers significant opportunities for value creation across various business segments. The key opportunities and levers, according to MPA are as follows:

     

    Cable

     

    Initial STB seeding by cable operators has improved subscriber declarations. Accordingly, with the transition from analog to digital, net ARPUs to multi system operators (MSOs) have grown 10x, to Rs 100 per subscriber per month. However, the current balance sheet position of most MSOs does not justify market expansion. MSOs are therefore compelled to drive operational efficiencies through prepaid services and packages. This helps improve yields from existing digital subscribers. Operators successful in executing such moves will attract refinancing (of existing debt) to expand their consumer offerings with bundled broadband and HD services. Over time, MSOs will also gain more operational control of their networks through majority ownership of joint ventures, and eventually acquire primary points at affordable prices.

     

    At each stage of cable’s evolution, the operating margin for MSOs will grow multifold. The business will remain capital-intensive but as operators grow to become full-service providers, they hold the potential to generate significant returns on capital employed (RoCE). Cable assets should not just be evaluated on reach and the digital subs base but also on their ability to cross-sell high value services such as HD and broadband. Also important is their effective economic interest in the last mile business. As the approach for MSOs shifts from width to depth, structurally, cable platforms will remain concentrated in the top 50 cities. This could change dramatically, however, with the entry of deep-pocketed players such as Reliance Jio and the growth of Headend-in-the-Sky (HITS) platforms, which seek to digitise rural markets.

     

    Several international and long-term financial strategics have also been eyeing partnerships with India’s cable and broadband players. This would help expedite capital as well as technical, operational expertise.

     

    DTH

     

    Since its inception, the DTH sector has made cumulative investments of Rs 275 billion and has been primarily responsible for driving penetration of digital pay-TV. With a base of more than 41 million active subscribers, DTH is poised to benefit from greater economies of scale. In 2014, the DTH industry reported an average EBITDA of Rs 38 per sub per month, with margins at 16 per cent. Moreover, two of the leading operators, Dish TV and Airtel Digital, have already started generating positive free cash flow (FCF). 

     

    Over time, MPA expects the DTH industry at large to generate meaningful FCF through: 

     

    (1) EBITDA margin expansion, as operating leverage starts to play out with subscriber acquisitions in Phase III and Phase IV DAS markets; and 

     

    (2) The composition of incremental revenue becoming driven more by ARPU growth rather than subscriber volumes. Leading players will be able to self finance future growth as well as consolidate the market, creating significant value in the process.

     

    Broadcasting

     

    India’s $3.5 billion broadcast industry remains in a sweet spot. The dual revenue stream of advertising and subscription is expected to benefit from a resurgent economy as well as improved structural dynamics anchored to steady growth in the number of TV households (TVHH) and higher digital pay-TV penetration.

     

    At 60 per cent TVHH penetration, India continues to add seven million new TV homes each year. In other words, at an average family size of 4.5 members, TV is gaining more than 30 million potential viewers each year. Television will continue to offer the highest reach to advertisers, relative to other media. As a result, advertisements will remain the major revenue stream for broadcasters, while an increase in affiliate sales will help stabilise the business and drive profitability.

     

    As of end-2014, total affiliate sales for broadcasters reached $1.1 billion, according to MPA. Significantly, 80 per cent of affiliate revenues were derived from digital subscribers (cable DAS + DTH), while India’s digital pay-TV penetration stood at 48 per cent for the same period. Digitisation has therefore improved subscription yields for broadcasters.

     

    In 2014, an average broadcaster’s yield from digital subscribers stood at Rs 74 per sub per month, against Rs 18 per sub per month from analog. There is therefore upside on affiliate sales, as analog subscribers in Phases III and IV convert to digital.

     

    Besides leading to greater addressability, digitisation has also improved channel distribution economics by lowering the cost of distribution and allowing multiple modes on content delivery (SD, HD SVoD, TVE etc). Although cable continues to account for more than 80 per cent of the carriage and placement (C&P) market in India, since the roll-out of DAS in 2012, the cable net distribution income (or NDI, which is essentially subscription income minus C&P costs) for broadcasters has grown by 137 per cent, to $218 million. 

     

    Going forward, the growth of the broadcasting industry will be driven by:

     

    (1) Expansion in advertising through sub-segmentation and identifying new genres

     

    (2) An increase in the addressable subscriber base with more digital homes

     

    (3) Growth in subscription yields: MPA projects total pay-TV channel revenues for broadcasters to grow from $3.5 billion in 2014 to $6.1 billion by 2019, and to $7.9 billion by 2023.

     

    Based on the relative growth for other markets in Asia- Pacific (ex-China), India is expected to contribute more than one-third of the total channel revenue business in the region by 2023. India’s strategic importance in the region cannot be ignored. For major international networks,

    India already contributes a significant part of their overall APAC business.

     

    Broadband to sow seeds for new digital assets

     

    Significant investments are also being made in India’s fixed and wireless broadband infrastructure. This will help boost internet penetration and improve average broadband download speeds. To address the challenge of last mile connectivity, the Department of Telecom (DoT) is considering joining forces with cable MSOs and local cable operators to help boost broadband penetration in smaller cities and towns. The above proposal, if implemented, can open new avenues for cable broadband.

     

    MSOs have already increased their investments in broadband. As of end-2014, cable broadband subscribers stood at one million, or only 0.3 per cent penetration of total households in the country. However, the entry of new players such as Reliance Jio could dramatically change the fixed broadband landscape. Having recently secured a pan-India MSO license, the company claims to have built the capacity to serve 20 million fiber-to-the-home (FTTH) customers.

     

    Traditional broadcasters are looking to capitalise on the emerging digital opportunity by investing to create long-term assets. For instance, incumbent broadcasters Zee, Star and Sony have started to aggressively invest in delivering branded OTT services. The belief is that online video consumption will complement the existing linear pay-TV business. Eventually, subscription OTT services will take off as bandwidth costs become more affordable and compelling exclusive content is made available for online audiences. Nonetheless, revenue monetisation will require more scalability, as online video revenues are projected to account for not more than 10 per cent of total video industry revenues over the next decade.