Pay-TV revenue in Asia Pacific, comprised of subscription fees and local and regional advertising sales, will top $56 billion (€48.95bn) in 2018 after 5 per cent annual growth, according to a new report, Asia Pacific Pay-TV Distribution, from analyst firm Media Partners Asia (MPA).
The Asia Pacific pay-TV industry will continue to expand at a 3 per cent CAGR between 2018-23 to exceed $66 billion in revenue by 2023, according to MPA forecasts. MPA’s report covers 17 markets across the region.
Over the next five years, the biggest gains will come from the utility-oriented China market, where pay-TV revenues are projected to grow at a 3 per cent CAGR to reach $25 billion by 2023, and the more accessible and commercial India market, where pay-TV revenues are set for an 8 per cent CAGR to reach $16 billion by 2023. That makes India the highest growth and most scalable pay-TV market in Asia Pacific. At the same time, Korea, another regional pay-TV powerhouse, will grow at a 3 per cent CAGR to reach $7.4 billion in revenue by 2023, according to MPA forecasts, while pay-TV revenues in Japan will climb at a 1 per cent CAGR to touch $7.1 billion over the same time-frame.
Elsewhere, pay-TV momentum will moderate in Indonesia and the Philippines, two of Southeast Asia’s biggest growth economies, according to MPA, while Australia, Hong Kong, New Zealand, Malaysia, Singapore and Thailand will register revenue declines ranging between a -1 per cent to a -6 per cent CAGR over 2018-23.
“Pay-TV stakeholders are adjusting to new realities as the industry shifts to IP-based distribution,” noted MPA executive director Vivek Couto. “The growth of high-speed broadband and online video is driving fundamental changes in content consumption and investment across key markets. This, together with piracy, will continue to adversely impact pay-TV industry growth. There will be more fixed broadband subs than pay-TV subs across much of Asia Pacific by 2021, while the gap between the mobile broadband subs base and pay-TV & fixed broadband subs will further widen as mobile networks emerge as a major means for mass content distribution, accelerating the shift in content consumption from households to individuals. M&A activity for the Asia Pacific broadcasting and pay-TV sectors for 2017 and the first half of 2018 reached US$10.5 billion in aggregate, with the biggest deals taking place in Australia, India and Korea. More M&A and consolidation is likely in these markets with Southeast Asia likely to join the action over 2019-20.”
MPA analysis indicates that the pay-TV subscriber base in Asia Pacific will grow by 3 per cent in 2018 to reach 645 million subs, representing 57 per cent of TV homes with at least one pay-TV service. The Asia Pacific pay-TV subs base will grow at a 2 per cent CAGR between 2018-23 to reach ~696 million by 2023, according to MPA projections. Pay-TV penetration by 2023 will fall to 55 per cent of TV homes when adjusted for multiple subscriptions, largely due to an acceleration in cable cord cutting in China.
Ex-China, net customer additions across Asia Pacific will significantly slow from 10.4 million in 2017 to 6.5 million in 2018. India will account for 47 per cent of the growth in 2018, followed by Indonesia (12 per cent), the Philippines (12 per cent), Korea (10 per cent), Pakistan (7 per cent) and Sri Lanka (3 per cent). The pay-TV base ex-China will grow from 267 million subs in 2018 to 288 million subs by 2023, representing a 2 per cent CAGR, with adjusted pay-TV penetration remaining flat at 57 per cent of TV homes.