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  • Punit Goenka sets two prime goals for ZEEL in next few years

    Punit Goenka sets two prime goals for ZEEL in next few years

    KOLKATA: Over the years, Zee Entertainment Entertainment Limited (ZEEL) has ruled the Indian pay-TV ecosystem. A slowing economy, the arrival of new entertainment offerings along with challenges at the promoter level had compounded the difficulties for the network. But as they say “the show must go on”, ZEEL continued its operation without minimum interruptions. The network which has been always in the range of 16-18 per cent despite all hardships is now aiming to take over “one quarter” of the country’s viewership.

    A road to growth and recovery:

    During a session at MPA’S second leg of APOS 2020, ZEEL MD & CEO Punit Goenka spoke about the goals he has set for the next few years. It is no wonder that its rising digital business acquires a major space in its strategy where Goenka sees a potential of the 4x-5x rise in revenue in the next four years. But that is not overpowering ZEEL’s core strength i.e. domestic broadcast business. “My target in the next two-three years is that I want to own one-quarter of viewership of this country,” Goenka stated.

    The regional markets hold the potential to make ZEEL achieve this target. In many markets, ZEEL reaped the benefits of being an early mover. It has been able to get eyeballs in other markets too. Its newly launched Punajbi GEC channel made it to the top in terms of viewership in just three months. Goenka reiterated his belief in the regional market – “I do believe there is still room for the regional segment.”

    He is not very happy with its flagship channel ZEE TV’s performance lately. While Covid2019 has definitely bruised the business, he added that it had lost market share in the pre-pandemic period also. However, he emphasised that it is on its way to recovery and fairly optimistic about the next two quarters. Goenka is not only happy about its Hindi GEC channel but the recovery of the overall network in the same period, even for ZEE5’s advertising revenue. 

    “From my perspective, recovery in the advertising market has been reasonably good. I am pretty confident that from the next financial year, things will be back to normal and the country’s growth will fuel growth for advertising as well,” he stated. According to him, FMCG is at the forefront of advertising resurgence at this moment but going forward the advertising mix may change.

    Rebuilding ZEEL: 

    Amid debt issues of the promoter Essel Group, the last 18 months have not been very smooth. But Goenka said the company really never underwent that current. It was largely related to promoters and the financial crisis faced by them due to several market dynamics. 

    But he acknowledged that this phase was quite turbulent for him personally. “Being a part of the family it was my duty to take some of that burden and to share that and make sure we come out keeping our head held high. Because in the end,  the equity that we have built over being an entrepreneur for so many decades in the country can not be diluted by just one thing that happened. That took on me personally. But having come out of that last November, I have renewed the energy to come back to rebuild the glory that ZEE deserves,” he added.

    In late July, he laid out the roadmap for its new journey while clarifying it he is here to stay and lead the transformation in a letter to shareholders. Governance, granularity, growth, goodwill, and gusto are the five pillars of ZEE 4.0, he stated.

    The change and challenges in the ecosystem:

    One of the major issues, not less powerful than economic turmoil, the players in the industry are facing is regulatory changes. While his peers in the industry like Disney’s Uday Shankar earlier expressed the discontent over frequent change, Goenka reflected the same tone. 

    “Unfortunately, I don’t have much to talk about the regulator. Because I have not heard anywhere in the world regulation changes this frequently. Of course, it is the right thing to do in their wisdom. I believe when NTO 2.0 will be implemented. , the impact will be felt more by consumers than by content providers like us,” he added.

    “Its a function of fragmentation. At a time, we had only a national broadcaster that existed in this country and then came the time of private TV which was led by ZEE TV, and then a whole lot of people came into the market. Eventually, the market grows, and fragments. With the advent of new technologies, the market will further at best fragment and you will get smaller buckets of audiences. You are going to create content for a smaller bucket rather than creating for one size that fits all,” he commented on the overall ecosystem.

    The new bet:

    Well aware of the changes, ZEEL is trying to build a super app through ZEE5 to stay relevant. Where ZEE5 has already grown well in the domestic market on the back of local content, getting around 80 per cent revenue, from the country, it is now expecting to grow further in the west. ZEEL will soon shut the high-cost linear business in those markets and will deliver its content through ZEE5. The third or fourth generation diaspora audience who has lost connection to Indian content can come back to it through ZEE5. Taking ZEE5’s revenue up by four-five times in the next five years is his another major goal.

    With the new independent board, changes in the margin and cash-flow target, ZEEL is on the right track. But challenges overmount as deep-pocket international players target the Indian the market for the next phase of growth. Even the HBO Max can enter India in the next two-three years. The upcoming merger of Sony and Viacom18 will throw a challenge in the traditional broadcasting business as well as OTT. Hence, time will say how ZEEL achieves the targets that Goenka has in the mind.

  • Around 80% of ZEE5’s revenue is attributed to India: Punit Goenka

    Around 80% of ZEE5’s revenue is attributed to India: Punit Goenka

    KOLKATA: ZEEL is working towards creating a digital dominance in the Indian media and entertainment market. Their plan has been on track as ZEE5 has significantly grown in the last one year.

    At the second leg of APOS2020, ZEEL MD & CEO Punit Goenka reported the last quarter’s financial results of ZEE5 for the first time since its launch. He mentioned that 80 per cent of ZEE5’s revenue is currently attributed to India, and the rest comes in from Asia.

    Goenka shared that the platform has not seen a lot of revenue coming in from the western world till now as ZEEL’s linear business is pre-dominantly still running there. Goenka thinks this part of the world could offer the next phase of growth for ZEE5.

    ZEEL will shut its linear business in the UK and Europe sometime around the end of this year and ZEE5 will carry the content instead. Later, the move will be repeated in the US and other developed markets. Given the Indian diasporas demand for content, it is presumable that ZEE5 will certainly see fair traction in traffic.

    However, the plan is not similar in APAC, MEA, and Africa due to different market dynamics. As TV and digital co-exist in these markets yet, ZEEL is not planning complete digital migration immediately. But, Singapore and Hong Kong exceptionally provide an opportunity for such migration although the timing is not decided yet.

    “We have to understand ZEE5 will be played out in the Indian context very differently compared to the developed world. In India, we are still a 97 per cent single TV household market. Therefore, the consumption of television still remains prime. What happens in the digital world or on ZEE5 is that we get consumption in individual capacity which is private consumption. We don’t have enough penetration of alternate screens like PCs or laptops that you see around the world which can replace television,” he states.

    “In India, the second screen is usually a mobile phone. You can never replace the TV experience on the phone. Therefore, the consumption of ZEE5 while at home will be replacing television for all people who are either not TV consumers or have moved out of television because of the sheer kind of content. I look at ZEE5 or digital content consumption as an incremental consumption of content. It is not TV versus digital,” he further opines.

    ZEE5’s advertising revenue has been impacted in the second quarter of the calendar year as well due to the unprecedented situation as it largely depends on television content. But like the linear business, Goenka is confident that ZEE5 will see a resurgence in advertising from the second or third quarter onwards as it comes out of the Covid2019 situation.

    “The biggest thing I had said as a part of the agenda last year was to take ZEE5 ahead and build ZEE5. I put a five-year horizon where it could be as much as 30 per cent of the total business of the company. The business of the company is growing at healthy 12-13 per cent on a CAGR over five year period. That would mean, even on today’s context, ZEE5 revenue could potentially go up by 4x or 5x in the next four years,” Goenka puts it as. 

  • “We are helping SMBs build a sustainable online model”: Facebook India’s Ajit Mohan

    “We are helping SMBs build a sustainable online model”: Facebook India’s Ajit Mohan

    KOLKATA: Facebook has always expressed its interest in small businesses globally. Moreover, a large chunk of the social media platform’s advertising revenue comes from that segment. Likewise in the Indian market, the company is putting a lot of energy to help small businesses come back faster from the pandemic crisis. In terms of ad spends, that market is coming back well as well as the overall number is moving up.

    Facebook India vice president and managing director Ajit Mohan spoke about its deep-rooted commitment to small business while participating in APOS 2020. “Around the world, businesses are starting to come back and a lot of our energy is leaning towards how we can help small businesses come back faster to where they can build a sustainable model,” said Mohan.

    “Facebook is fundamentally a marketing platform that is tuned to need of small businesses. Around the world what we have seen is that most frugal marketing spend come to Facebook because this is where small businesses can grow. Through the second half of March and April, we did see a very tight lockdown in India that had an impact on the ad market. But that started to change especially in the last few weeks of June and heading into July we see the numbers moving up,” Mohan added.

    Mohan also stated that experts tend to not incorporate and count India’s vibrant online ad market. One per cent of startups and five per cent of enterprises actually do spend money disproportionately on digital to find new sources of growth.

    Covid2019 has accelerated the shift from offline to online. It has brought new cohorts of users to the digital platform. According to him, the behaviour of coming online got hyperdrive. Facebook also saw extraordinary growth for all its platforms it sees that continuing.

    Mohan, who worked alongside Jio when he was in Hotstar, is again working as a partner of the former as Facebook has acquired a minority stake in Jio Platforms. According to him, there is an alignment of the mission of two companies. While Facebook’s energy comes from the belief in giving people the power to build community online, he sees the same passion in Jio as it is playing the role of enabler in the digital ecosystem. Moreover, the alliance of WhatsApp-Jio Mart was one of the focus areas of the Facebook-Jio deal. Mohan said if they could pioneer a certain model of shopping on WhatsApp giving a lean structure to it, Facebook could take the model globally.

    “We are just at the beginning of an exciting hockey stick. If we look at the last few years, the first phase of work was all-around access. The number of 4G users has gone from 50 million to 550 million in less than four years. It has all happened in a very short period of time and that’s the foundation. In the foundation phase, it has lit up multiple sectors. Now, the next five to 10 years will be to see the impact of all the hard work that has been done on the access front,” Mohan commented on the overall ecosystem.

    “If we can bring 60 million businesses online that creates an impact for leveraging the 550 million consumers who have already come online. Connecting the dot between businesses and consumers will open up the explosive economic opportunity not for just those businesses but for others who seek to serve them. With innovation, all kinds of opportunities open up in education, health, etc., and in ways that have barely scratched the surface. We have done the hard work and set up the foundation. Now is the moment to translate that to real innovation and economic opportunity,” he added.

  • “Our subscriber acquisitions are returning to normalcy” – Airtel DTH’s Sunil Taldar

    “Our subscriber acquisitions are returning to normalcy” – Airtel DTH’s Sunil Taldar

    MUMBAI: Having their heads buried in a transformative ecosystem, major DTH players have constantly been expanding their offerings and Airtel’s DTH arm is not an exception. The world is busy discussing traditional TV versus OTT but DTH players like Airtel Digital TV are embracing the opportunities coming from streaming services, according to Bharti Airtel DTH CEO Sunil Taldar.

    In an interview with Media Partners Asia executive director and co-founder Vivek Couto during APOS 2020, Taldar spoke in the session "Innovation and growth in India's Video Market" alongside Tata Sky CEO Harit Nagpal. He addressed queries about existing opportunities, changing consumer preferences during pandemic as well as the future of his own platform. He also sounded highly optimistic about creating a universe of hybrid set-top boxes along with the growth opportunity to expand the existing DTH consumer base.

    Edited excerpts:

    You run very large consumer business. How has the pandemic affected consumer behaviour, generally and specifically and what are the growth trends across your business? And what does the future look like now for the DTH industry?

    First and foremost, we are an essential service and we became a little more essential during the crisis period. And we did see a change in behaviour which led to a significant increase in the consumption of news. In the absence of fresh programming and live sports, we have seen a large number of customers turning to OTT, and we have seen demand increasing for the hybrid set-top box. So that's one shift that we've seen in the industry.

    Another thing that I would like to highlight here is true for the entire industry. We have done a lot of work to digitally service or fulfil the needs of our customers with zero or minimal physical contact. And I'm making sure that there are no safety or security concerns both for our customers as well as for our field staff. Within the business, there has been a massive focus on serving those who serve our customers and how do we enable our field staff on the ground. This entire work that has happened in the last three months will offer a significant competitive advantage to the DTH industry.

    Our acquisitions are coming back to normal. I think we are acquiring more customers today as we speak. And DTH being present in only 70 million out of 300 million homes in the country, there is a massive land grab opportunity and massive headroom for growth. And I see the long-term future of this industry to be vast.

    You have been innovative for many years. So what else are you introducing to address competition? And to appeal to wider consumer needs and requirements?

    If you look at it from a consumer route, we live in a connected world and one of the challenges of the connected world is actually proliferation of services, which forces our customers to maintain multiple relationships, which is tedious. So, there is some work that we have done, which is a first of its kind in India, such as offering a converged proposition to our consumers and allowing them to buy services like mobile, broadband, landline and DTH together. Moreover, when we say DTH it also includes aggregated content. So, it actually takes care of one of the biggest pain points for the consumer i.e., one bill, one payment, one app and one call centre to get services or address your complaints. It's a process improvement of offering a converge competition. 

    The other is there's an opportunity in the market for the entire DTH industry, which is the content creator industry to work closely with us. India is one of the most under-screened countries in the world. We have a 100 per cent control over content, distribution and security. We have the ability to deliver content to our customers on a pay-per-view right now and we have access to 70 million homes in the country, we have a trusted relationship here with 70 million customers. Now today, if we were to launch Hollywood or Indian movies on this platform, that's a massive business opportunity. In this crisis period that we're living in, I don't see theatres opening soon, anytime. Neither do I anticipate consumers walking into theatres in the near future. But even if that was to happen, given the screen density in the country, it's a very large opportunity that the industry will explore.

    What is the opportunity of hybrid boxes? 

    The future belongs to hybrid boxes. If we increase or drive the penetration of the hybrid boxes and an ecosystem develops around that there are opportunities whether it is video conferencing, gaming, e-commerce, etc. So, these are all opportunities which are there.

    What is the best way to monetise the connected box ecosystem? Is it through advertising or subscription? What is the revenue model?

    The connected box gives us good access to viewership data because it's a two-way system. Today, the entire industry operates on extrapolated data at a very small sample size of customers. Now, here we have a great quantity of data. In my view, there could be two streams for monetisation that can be watched. One is we can use this data to improve the quality of content and increase stickiness for linear programming and building large subscription business. And this is an interest for broadcasters and operators, provided both of us work together to improve the quality of content and therefore stickiness and therefore subscription. Or the other area is, advertising might be an opportunity but how do we improve the efficacy of spends for advertisers.

    DTH platforms have around 70 million subscribers and that's going to continue to grow. But first of all, do you ever see within the next five years any of the OTT platforms, the top three or four, having that kind of reach directly through a huge universe? And is that a friend or a foe? 

    Live TV is here to stay because nothing can replace live programming like news, live sports, etc. And we have embraced OTT rather than fighting OTT. If the OTT universe grows, whether one player or all, to be even 50 million tomorrow, it's actually good for us because one great consumer insight is everybody wants to enjoy that content on the large screen. It will offer help to our efforts to drive the hybrid universe. So we tend to benefit both ways, to benefit from the OTT business and also from live content. I don't think we are here to fight that.

    What are you seeing as changes in the Indian consumer ecosystem and mindset through these last few months? And some of them I'm sure are good changes and are they lasting changes? Will they have any impact on your business and products in the long-term?

    It's very difficult to say the changes that we have seen whether they are going to last forever. For example, work from home is a significant change that we have seen. Will this behaviour last forever or people will go back to working from offices once things ease out? But some of the opportunities are not related to this. It's a function of what has happened and a function of what platform do we create. As we said, pay-per-view, even if it is the launch of movies through a platform, it is a real opportunity for both today and tomorrow. If you ask me about the education segment, is that an opportunity today? Would that be an opportunity tomorrow in the connected world? That’s yes. We're actually managing connected devices, video conferencing, etc., and all these are real opportunities. And these can have a significant contribution to our top line as well as for our bottom line. What is required is for us to try penetration with an ecosystem, have the imagination and conviction right and the ability to convert.

    Some of the changes that we have seen, whether it is OTT adoption, a customer seeking education online, an opportunity for video conferencing or minimising physical contact, there are efficiencies right where we build models to where people upgrade from their existing box to a new box through absolutely zero contact.

    These opportunities are going to remain for a long period of time and fundamentally alter the way we conduct this. What we need to do is work towards the rest of the constituents of this entire ecosystem, be it broadcasters or technology providers or partners. And I think if that happens, it will fundamentally change the trajectory of the DTH industry. 

  • Indian film, TV, online video services garnered $49.8 billion in 2019

    Indian film, TV, online video services garnered $49.8 billion in 2019

    KOLKATA: The film, television and online video services industry in India generated a total economic contribution of $49.8 billion (Rs 348,972 crore) in 2019, indicating a total growth of 61 per cent from a similar report in 2017, according to new research by Deloitte. The report also found that the industry supported a total of 2.6 million jobs. 

    Commissioned by the Motion Picture Association (MPA), with the support of FICCI, the Producers Guild of India (PGI) and Creative First, the report was launched on 10 July, during FICCI’s E-Frames virtual event, Future Tech or Future Tense.

    PGI president Siddharth Roy Kapur said, “Our dynamic industry not only provides high-quality jobs and powers the creative digital economy, but is also a huge proponent of India’s soft power around the world. This research highlights how film, television online video production and distribution directly stimulates a range of other industries and businesses, wielding an impact far beyond the direct economic activities of the sector. For that reason, it is crucially important that all stakeholders from the industry and the government play their part in creating an ecosystem that incentivises growth, encourages creativity and rewards innovation. This industry has a tremendous amount to offer, both in economic activity to help us regain a solid footing in response to Covid2019 and to telling the stories of India around the world.”

    FICCI Media and Entertainment chairman Sanjay Gupta said, “M&E is designated by the government as a champion service sector. The Covid2019 pandemic is a setback for the M&E industry – and it will require a huge effort from both industry and government to put the foot to the accelerator, incentivise production and all forms of distribution and transport our industry to the heights we all know it can achieve. The creativity and will are there; let’s hope the policymakers and regulators match our entrepreneurial drive.”

    Deloitte India Media and Entertainment partner and leader Jehil Thakkar said, “The report illuminates for us the broader trends of the film, television, and online video services sectors. Unsurprisingly, online video services made a statement, generating a total economic contribution of $2.1 billion (Rs 15,374 crore) in 2019, up from $230 million (Rs 1,612 crore) in 2017 – an increase of 854 per cent in local currency. India has developed a dynamic video on-demand ecosystem that is satisfying the huge appetite for quality content, especially during the Covid2019 pandemic. Perhaps the biggest threats to continued growth and more job opportunities is rampant piracy and the imposition of artificial barriers that impact on the quality of a customer’s experience. Addressing these challenges is the task of the day.”

    PVR Pictures CEO and PVR Ltd chief business planning and strategy Kamal Gianchandani said, “Exhibition is a beloved form of entertainment for Indian audiences, and will continue to offer an essential means of social engagement and enjoyment for hundreds of millions of people. Right now, movie-going is an entertainment experience that is greatly missed. Once it is safe to do so, I am confident that audiences will return to patronise theatres with a passion and in greater numbers than before. That said, India’s screen density of 6.5 screens per one million remains too low. Just think of the positive effect on the industry and economy if we could double it?” 

    MPA APAC president and managing director Belinda Lui said, “India’s film, television and video on demand market is fuelled by talent, innovation and unrivalled entrepreneurship. Industry stakeholders have developed a reputation for working with the government to identify challenges and find effective solutions. This creative, indomitable spirit is likely to be called upon in the current times to overcome a range of hurdles and ultimately, continue to deliver great quality content through a variety of channels to audiences both at home and across the globe.” 

  • Star, Sony lead India’s 62% share in regional APAC pay channel revenue in 2018

    Star, Sony lead India’s 62% share in regional APAC pay channel revenue in 2018

    MUMBAI: Media Partners Asia (MPA) has found that India accounted for 62 per cent of regional Asia Pacific pay channel revenues in 2018, led by Star India (now owned by Disney) and Sony. If revenues from Star and Sony India are excluded, Southeast Asia leads, contributing 32 per cent of revenue in 2018, driven by Disney (including Fox), WarnerMedia and BeIN. India would then contribute 18 per cent, led by Disney, Discovery and WarnerMedia, followed by Japan with 16 per cent, led by Disney, Discovery, WarnerMedia and Viacom. Hong Kong & Taiwan and Australia & New Zealand contribute 10 per cent each in this scenario.

    The pay-TV market in Asia Pacific is entering a phase of accelerated consolidation as subscriber growth and spends deteriorates across key territories, according to MPA. The latest edition of MPA’s Pay-TV Networks Channel Database shows that aggregate revenues across 13 major pay-TV networks in Asia Pacific grew by just 1 per cent in 2018 to reach $4.9 billion (after 5 per cent growth in 2017), while combined EBITDA fell by 5 per cent in 2018 to $0.9 billion, approximately the same rate of decline as 2018, ramping up industry pressure. India stands alone as the last major buffer against secular weakness in pay-TV in Asia, although new regulations threaten pay-TV subscription and advertising growth in India too, at least in the near term. The 2018 fall in EBITDA steepens to an 8 per cent drop to $0.5 billion for the measured companies when Star India and Sony India are excluded.

    Commenting on the key findings from MPA’s Pay-TV Networks Channel Database, executive director Vivek Couto said, “Consumer demand for traditional pay-TV has been impacted forever by high-speed broadband, which is driving rapid increases in online video consumption as well as piracy. These trends have intensified downward pressure across Asia’s pay-TV ecosystem, especially in Southeast Asia, led by Singapore and Malaysia, alongside secular shifts in Australia and New Zealand. This will accelerate consolidation as well as major shifts in how channels and content are marketed and sold. Pay-TV’s first big wave of consolidation, led by Disney buying Fox and AT&T buying branded networks from Turner and HBO, will play out with momentum across Asia Pacific over the next year. Future consolidation and rationalization will be defined by global moves and M&A possibilities involving large assets in India. Major players such as Discovery, CBS, Viacom, A+E, Sony and Universal are now competing for the consumer wallet with an increasingly scalable Disney and a newly integrated WarnerMedia within AT&T.”

    Meanwhile, factual & lifestyle channels had the biggest share of revenue by genre, excluding large local networks in India, with 21 per cent in 2018, closely followed by kids channels (21 per cent), then English GE (17 per cent, a material decline from 19 per cent in 2017), sports (15 per cent, up from 14 per cent in 2017), English movies (12 per cent, up from 11 per cent); Asian entertainment (9 per cent, up from 8 per cent), news (3 per cent), and music (2 per cent).

    At the same time, Asia’s relatively young online video market continues to expand rapidly, fueled by advertising scale in particular. Excluding China, where internet video is a highly regulated domestic phenomenon, online video revenues in Asia Pacific grew 40 per cent in 2018 to total $8 billion, according to MPA. As part of this, online video advertising grew 36 per cent to reach more than $5 billion while subscription revenue grew 50 per cent to surpass $2.8 billion. Outside China, Google (YouTube), Facebook, Netflix and Amazon still dominate advertiser and wallet share, although local players are starting to emerge with scale, including Stan in Australia, Hotstar (now owned by Disney) in India, Hulu in Japan and Viu in Hong Kong and Southeast Asia. Pay-TV and telecom operators are also increasingly investing in platforms and technology to aggregate OTT services and provide more choice to their customers along with simpler packages of pay channels with digital rights.

    MPA’s Pay-TV Networks Channel Database includes the following businesses: (1) Star India & Fox Networks, both now part of Disney, as well as Disney’s own branded channels; (2) WarnerMedia networks owned & operated by HBO and Turner; (3) Sony India (including Ten Sports) plus Sony’s ex-India branded networks business; (4) Discovery, including Scripps; (5) BeIN Media; (6) Viacom (excluding an unconsolidated 49 per cent interest in Viacom18 India in 2018); (6) Universal; (7) A+E.

  • India to be APAC’s fourth largest online video subscription opportunity by 2023: MPA

    India to be APAC’s fourth largest online video subscription opportunity by 2023: MPA

    MUMBAI: The latest report by Media Partners Asia (MPA) predicts that by 2023, India will be Asia Pacific’s fourth-largest online video subscription opportunity after China, Australia and Japan.

    The Asia Pacific Online Video & Broadband Distribution report goes on to say that Asia Pacific’s online video revenue, comprising net ad spend and subscription fees, is expected to grow at 18 per cent CAGR, up from $21 billion in 2018 to $48 billion by 2023.

    The growth of online video subscription has been impressive in China, with fees rising from less than $850 million in 2015 to a projected $5 billion in 2018. The growth of online video subscription fees has also been strong and increasingly scalable in Australia and Japan, while meaningful opportunities are opening up in India, driven by the growth of payment infrastructure as well as investment in sports rights, local movies and series. Online video sub fees in Southeast Asia (including Hong Kong) are relatively low, at a projected $267 million in 2018. This could grow to $724 mil by 2023, driven by greater momentum in Hong Kong, Indonesia and the Philippines.

    China will account for the lion’s share of industry value, with more than 60 per cent of Asia Pacific online video revenue and more than 75 per cent of direct-to-consumer SVOD subs by 2023. After China, the largest markets by revenue in 2023 will be Japan, Australia, India, Korea and Taiwan. 

    MPA executive director Vivek Couto said,“Online video monetisation is starting to scale, supported by rising investment in premium entertainment and sports as well as the growth of broadband and digital payments. Strong digital ecosystems are emerging, especially in China while telcos are also becoming important aggregators of video services in markets such as Australia, India and Southeast Asia. Advertising is a major revenue stream for online video across the region, while subscription is also key, especially in Australia, China and Japan, and growing from a low base in India, Southeast Asia, Korea and Taiwan. Different payment models are emerging across China, India and Southeast Asia incorporating, including TVOD and shorter time commitments, freemium tiers, bundles and loyalty programs tied to a broader mix of digital services.”

    Net online video ad spend in Asia Pacific will grow from $13 billion in 2018 to $30 billion by 2023. Ex-China, this opportunity equates to more than $11 billion by 2023, versus $5 billion in 2018. YouTube and to some extent Facebook will remain dominant, with 73 per cent of online video ad spend ex-China by 2023, versus 78 per cent in 2018. The biggest online video ad markets after China by 2023 will be Japan, Australia, India and Korea. Local players will gain share with India leading the way, although Southeast Asia will lag behind.

    Online video content costs across Asia Pacific grew by 27 per cent in 2017 to reach $13 billion, with China contributing 85 per cent. Asia Pacific online video content costs will grow from $16.6 billion in 2018 to $31.5 billion by 2023, a 14 per cent CAGR, according to MPA. Ex-China, OTT video content costs will grow from $2.7 billion to $5.9 billion over 2018-23, a 16.5 per cent CAGR, with Australia, India and Japan driving momentum, followed by Korea.

    Advances in broadband will provide a significant boost to online video consumption, reach and monetisation. Mobile broadband will continue to grow, including the first flowering of 5G in North Asia and Australia post-2020, alongside a slow but steady transition to next-generation fixed broadband. Mobile broadband penetration in Asia Pacific ex-China will reach 80 per cent per capita by 2023 versus 57 per cent in 2018, with some of the biggest growth coming from India, Indonesia and Thailand. With China included, average mobile broadband penetration in Asia Pacific will grow from 74 per cent to 94 per cent per capita over the 2018-23 period. Average fixed broadband penetration in Asia Pacific will grow steadily from 50 per cent to 54 per cent of households over 2018-23, with the focus increasingly on upgrading networks using fibre and next-generation cable technologies.

    High level of online piracy leads the list of barriers to the growth. Apart from China, many local players are also struggling to scale in fragmented marketplaces. The top three SVOD players in a market typically have 50 per cent or more of online video subscription revenues, according to MPA analysis, leaving scope for future consolidation.

    Couto added: “We are in the early innings of an industry evolution which will require high levels of investment and strong balance sheets. For standalone players, there is no clear path to significant free cash generation in any market over the medium term, while integrated digital giants and large-scale TV players are subsidising losses for their online video services, although operational breakeven is likely in the near-to-medium term for local platforms in Australia, China, India and Japan.”

  • India’s video content budget up by 14% in 2017: MPA

    India’s video content budget up by 14% in 2017: MPA

    MUMBAI: The video content expenditure for TV, movie and online video across India, Korea and Southeast Asia’s five biggest growth markets (Indonesia, Malaysia, the Philippines, Thailand and Vietnam) has seen a growth of eight per cent in 2017 to reach $10.2 billion, according to the 2018 edition of Asia Video Content Dynamics from analyst firm Media Partners Asia (MPA).

    India’s video content budget soared by 14 per cent to $4.2 billion in 2017, purely driven by pay-TV. Content investment in India’s online video market is also growing rapidly, driven by competition among well-capitalised global and local platforms. This trend is expected to continue over the next three years.

    India is followed by Korea, where investment in video content increased by seven per cent over the year to approach $3 billion. The investment in Korea is also starting to accelerate and will continue to do so over the course of 2018-19. Growth here will likely accelerate when China eventually lifts its ban on Korean dramas, movies and talent.

    The biggest contributors to aggregate incremental growth in video content spend across the seven markets in 2017 were pay-TV (38 per cent) and online video (30 per cent).

    MPA VP Stephen Laslocky said, “In general, content investment dynamics are favourable with content investment growing. Pay-TV content costs in the surveyed markets grew five per cent, led by India and Korea, driven by local entertainment and sports.”

    Free to air content investment was up by six per cent in 2017. Scale and growth in free to air content investment are largely attributable to Korea, the Philippines, Thailand and Indonesia, driven by local entertainment.

    Film production budgets in the surveyed markets were up 10 per cent, driven by Korea and India. Online video investment is growing rapidly from a low base, up almost 80 per cent during 2017.

    Laslocky believes that rising competitive intensity is driving up online video content costs as rival platforms produce and acquire local series and movies, especially in India and Korea. “We expect online video content investment to also pick up in emerging markets across Southeast Asia, led by Indonesia and the Philippines,” he added.

    Malaysian market witnessed a decline in video content investment in 2017 mainly due to Astro cutting spend on international pay channels. The outlook for Malaysia could improve as new government policies bolster economic growth, broadening consumer spend and ad dollars.

    Growth in production spend across emerging Southeast Asia markets was generally satisfactory in 2017, according to the report.

  • Online video growth zooms across Asia with internet TV consumption: MPA

    Online video growth zooms across Asia with internet TV consumption: MPA

    MUMBAI: In a landscape still dominated by TV, the Asia Pacific online video industry seems to be on a path to double its share of video industry revenue ex-China from 9 per cent in 2017 to 20 per cent by 2023, according to analysis released today by Media Partners Asia (MPA).

    The findings will be presented at the APOS Summit (April 24-26), an event for industry leaders in media, telecoms and entertainment, in Bali, Indonesia.

    The analysis covers 12 markets: Australia, India, Japan, Korea, Hong Kong, Taiwan and six key markets in Southeast Asia, with a focus on consumer and advertiser spend, content costs and market share across key clusters.

    MPA executive director Vivek Couto said: “The growth of subscription and ad-supported video services from Amazon, Facebook, Netflix and Google will propel these FANG companies to a combined 63 per cent share of Asia Pacific online video revenues ex-China by the end of 2018.

    Google-owned YouTube’s dominance is reflected by its 70 to 90 per cent slice of a large and fast-growing online video ad pie in Australia, Japan, Southeast Asia and India. In addition, Amazon and Netflix have scaled quickly with subscription video offerings in Australia, India and Japan but have a long way to go in Southeast Asia and Korea. There’s also a long runway for more growth in India.

    Encouragingly, local and regional players with strong entertainment and sports IP together with, in many instances, large TV businesses, have invested in online video platforms to grab a bigger market share. This is especially true in India, Korea and Japan, although Southeast Asia lags.

    The outlook remains in FANG’s favour, however, with its aggregate market share maintained at 62 per cent in 2023. Such scale will dramatically alter growth and investment dynamics across key markets. We see significant upside for local and regional media platforms with attractive IP and strong execution as well as the appetite and patience to invest over the long term across digital video.

    Excluded from MPA analysis are potential all-in premium offerings from Disney, 21st Century Fox and Time Warner, which are likely to start gaining traction at some point over the next five years as global media consolidation accelerates.

    FANG’s share could also be greater once Amazon Prime Video scales up in Australia and key markets across Southeast Asia. This is not yet included in the assumptions underlying MPA’s analysis.”

    Key highlights from the MPA survey include:

    FANG vs The Rest

    The growth of subscription and ad-supported video services from Amazon, Facebook, Netflix and Google will propel the FANG companies to a combined 63 per cent share of Asia Pacific online video revenues ex-China by the end of 2018. Google-owned YouTube’s dominance is reflected by its 70 to 90 per cent slice of a large and fast growing online video ad pie in Australia, Japan, Southeast Asia and India. Amazon and Netflix have scaled quickly with subscription video offerings in Australia, India and Japan but have a long way to go in Southeast Asia and Korea. There’s also a long runway for more growth in India.

    Encouragingly, local and regional players with strong entertainment and sports IP and, in many instances, large TV businesses, have invested in online video platforms to grab a bigger market share. This is especially true in India, Korea and Japan although Southeast Asia lags.    

    According to MPA, YouTube and Facebook combined will account for 72 per cent of online video advertising in Asia Pacific ex-China by 2023, versus 75 per cent at end-2018. In subscription-based online video, Amazon and Netflix’s combined share of the market should reach 35 per cent in 2018 and grow to 37 per cent by the end of 2023, although local and regional platforms are competing for and winning a share of incremental dollars in Australia, India, Japan, Korea and parts of Southeast Asia.

    Content Investment

    Total content investment in TV and online video across the 12 surveyed markets reached $23.1 billion in 2017, up 6 per cent year on year (yoy). MPA’s analysis includes movies, entertainment and sports. Content investment is expected to scale to $30.1 billion by 2023, a 5 per cent CAGR from 2018. Such growth is largely anchored to new dollars being spent across online video, which will account for 17 per cent of content investment by 2023 versus 10 per cent in 2018. MPA analysis focuses on premium video content creation across TV and OTT but excludes costs associated with the billions of hours being mass produced and uploaded on YouTube.

    Content investment on TV is largely anchored to continued growth in sports rights, across Australia and India in particular, entertainment on free TV across Southeast Asia, albeit expanding at a more moderate pace, and pay-TV in India and Korea. Online video’s contribution to total TV and online video content costs will grow markedly in Southeast Asia, rising from 10 per cent to 20 per cent between 2018 and 2023. A similar growth trajectory is evident over the same period in Australia (13 per cent to 26 per cent) and India (10 per cent to 19 per cent).

    The Overall Video Industry

    Asia Pacific advertising and subscription fees across TV and online video grew 3.9 per cent ex-China in 2017 to reach $60 billion. TV and online media continue to grow at different speeds, as expected, with TV revenues inching up 1.2 per cent in 2017 while online video revenue expanded by 45 per cent to $5.2 billion.

    MPA projects that total industry revenues will climb at a 3.8 per cent CAGR over 2018-23 to reach $77 billion by 2023, with online video scaling up by a 16 per cent CAGR to reach $15 billion in net terms by 2023 versus $7.1 billion in 2018. TV will only grow at a 1.8 per cent CAGR over the same period to reach $62 billion by 2023.

    By 2023, the largest TV and online video markets in Asia Pacific ex-China will be: Japan ($27 billion), India ($17 billion), Korea ($9.2 billion) and Australia ($8.2 billion). Southeast Asia will contribute $11.1 billion by 2023. India will remain the fastest-growing video market, growing at an average annual rate of more than 8 per cent over 2018-23, followed by Southeast Asia with 5 per cent and Australia at 4.5 per cent.

    Online Video

    Online video advertising, dominated by YouTube to date, continues to grow at a stellar pace, increasing by 47 per cent in Asia Pacific ex-China to $3.6 billion in 2017 and projected by MPA to climb at a 17 per cent CAGR between 2018-23 to reach $10.7 billion by 2022. Online video subscription fees are growing rapidly from a very low base, up 41 per cent year-on-year in 2017 to reach $1.7 billion and forecast to grow at a 12 per cent CAGR from 2018 to more than $4 billion by 2023.

    Japan and Australia will remain the leading markets for online video, contributing more than 55 per cent to Asia Pacific revenues ex-China in 2023. The third-largest market will be India, which will also be the fastest growing with a 26 per cent CAGR over 2018-23, with Southeast Asia the second-fastest with a 21 per cent CAGR over the same period.

  • MPA forecasts India to lead APAC in ad spend growth

    MPA forecasts India to lead APAC in ad spend growth

    MUMBAI: Ad growth in India–a contender for Asia’s most dynamic market–was weighed down in 2017 by the lingering effects of demonetisation as well as a new goods and services tax, which disrupted advertiser supply chains, inhibiting marketing activity in the process, according to a Media Partners Asia (MPA) report. Net ad spend consequently grew by 6.9 per cent in 2017 to total $9.0 billion, ending three successive years of double-digit growth. Nonetheless, India should re-emerge as APAC’s fastest-growing ad market over the next five years. MPA analysts forecast a 10.9 per cent CAGR in net ad spend in India from 2017 to total $15 billion by 2022.

    Advertising revenue across Asia Pacific insreased by 6.1 per cent in 2017 to hit $173 billion and is on course to grow by a further 6.2 per cent in 2018 to move close to $184 billion this year, the report stated.

    Published today, Asia Pacific Advertising Trends 2018 forecasts net ad spend after commissions and discounts across 14 major markets in the region. The region’s advertising outlook remains positive with MPA analysts forecasting ad gains in almost all markets in 2018 and ad growth across the board over 2017-22. The MPA expects net ad spend in APAC to total $226 billion by 2022, having grown by a 5.5 per cent CAGR from 2017.

     “Market momentum for Asia Pacific as a whole should hold steady over 2018 and 2019, but we expect a slight deceleration from 2020 as online advertising, increasingly the main engine of growth across the region, settles into a gentler trajectory in some large ad markets,” remarked Vivek Couto, executive director, Media Partners Asia. “Much of digital’s growth will be driven by China, which should retain more than 60 per cent of online advertising in Asia Pacific over our forecast period.”

    Couto added: “Traditional TV advertising is now in or on the verge of decline in most countries, having peaked at $54 billion across the region in 2017. That said, India, Indonesia, the Philippines and Thailand are notable exceptions, underscoring the ongoing importance of mass-market broadcast as a platform for reach and awareness in these growth economies. Overall, TV advertising should contract very slightly from 2017 to 2022, at a -0.1 per cent CAGR. Print advertising, however, is on the retreat almost everywhere, although both newspaper and magazine advertising will continue to grow at a modest single-digit pace in India. Out-of-home, meanwhile, remains on an upward trajectory in most markets, benefiting from ongoing urbanisation as well as digital upgrades.”

    While the overall rate of advertising growth for APAC is slowing, a mixed picture emerges on the ground. Ad spending over 2017-22 should pick up speed compared with 2012-17 in Australia, Hong Kong, Malaysia, the Philippines, Singapore and Thailand. At the same time, cornerstone markets such as India, Indonesia and Japan should be able to sustain the pace they have set over the past five years.

    The pattern of ad growth across Asia Pacific is becoming increasingly determined by online media, which will soak up the vast majority of new ad dollars in the region for the foreseeable future. MPA estimates that internet advertising in APAC grew by 18.1 per cent in 2017 to nudge past $76 billion, with a projected 14.4 per cent growth in 2018 taking the total to $87 billion this year.

    Online video advertising meanwhile is entering into a red-hot growth phase, powered by the rising prominence of high-speed broadband. The MPA forecasts that by 2022, online video platforms will contribute at least 10 per cent of all advertising in nine markets: Australia, China, Hong Kong, Indonesia, Malaysia, New Zealand, Singapore, Taiwan and Vietnam, compared with just one market (Taiwan) in 2017.

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