Advanced Television

Forecast: Asia content investment to grow 15%

August 5, 2022

Video content budgets across India, Korea and Southeast Asia climbed 21 per cent in 2021 to reach $10.4 billion (€10.2bn) and are forecast to grow 15 per cent to $12.0 billion in 2022, according to the latest edition of Asia Video Content Dynamics from analyst firm Media Partners Asia (MPA).

This report tracks video content consumption, content investment, and production costs in seven key Asian markets: India, Indonesia, South Korea, Malaysia, the Philippines, Thailand and Vietnam. Verticals include free-to-air (FTA), pay-TV, online video and film with analysis of key players and the production value chain.

Video industry content investment surged an estimated 21 per cent to $10.4 billion in 2021 as key operators replenished content pipelines after the initial waves of Covid-depleted programming inventories in 2020. All content verticals except theatrical generated strong gains. Film costs contracted 2 per cent as pandemic restrictions delayed releases in many markets. Korea and India were the largest content investment markets with a combined $7.4 billion; other markets reached $400-900 million each. Pay-TV was the largest vertical with 46 per cent of total industry content investment, which reflects well-developed pay-TV markets in India and Korea. OTT content was the fastest growing vertical, up 83 per cent Y/Y to become the second largest vertical with 26 per cent of industry investment. Korea and India generated particularly strong OTT investment growth, while Thailand and Indonesia contributed significantly. FTA ranked third with 25 per cent of the total.

2022 is expected to generate further strong gains in content investment, up a projected 15 per cent to $12.0 billion. India and Korea will drive the bulk of the increase, but all markets and all verticals are expected to grow. Online video will grow the most – by nearly $700 million – while film will be the fastest growing – up nearly 140 per cent as theatres screen fresh movies.

“Inflation, particularly with online originals, is clearly a factor driving-up content costs,” notes MPA Vice President Stephen Laslocky. “Online video operators, broadcasters, and producers need to see that higher budgets translate into more premium viewing experiences; otherwise, the cost increases will not be sustainable. Internationally successful programmes remain the content licensing Holy Grail which thus far, only Korean dramas and some anime as well as US and UK content have sustainably achieved. Some Thai content has succeeded outside of Thailand. Quality production values, strong storylines with a focus on younger online demographics will be the building blocks of future investment strategies.

“The expanding online video sector has been a boon to independent producers. Profit margins have stabilised at 10 per cent or more across much of the region. More can be done to bolster independent producers including additional compensation for original concepts, commensurate rewards for breakout successes and expanded use of pipeline deals (which allows producers to more reliably recoup overheads). In exchange, producers need to be transparent with production costs. Commissioners need to be willing and able to audit costs.”

Key Verticals

TV ratings continue to decline in measured markets. The declines reflect structural changes as viewers transition to online video. Going forward, online viewership will further erode TV ratings. The growth of online video has continued into 2022. Video consumption remains heavily skewed toward the UGC platforms with their share of video consumed ranging from 82 per cent in Korea to 95 per cent in Vietnam. While YouTube remains the leader, TikTok is driving the growth in Southeast Asia. Premium video, both AVoD and SVoD, captures the majority of the balance.

TV and online video consumption patterns are diverging. On TV, drama is generally the most watched genre while variety, including reality, often ranks #2. Movies, kids, and news can be significant drivers of viewership and sports can over-index with top rating TV programs. Viewership of some key TV genres is transitioning to YouTube, where they generate significant classified consumption.

Meanwhile with premium online video, approximately 90 per cent of consumption is series, the bulk of which is drama, while movies generate about 10 per cent of viewership. Dramas account for nearly all top titles. Ex-India, variety consumption is largely driven by acquired Korean programming.

Box office revenues, admissions and releases all fared poorly in 2021. The silver lining is that delayed tentpoles have performed well in 2022. Some markets, such as India and Indonesia, are expected to fully recover. In other markets, a return to pre-covid may take until 2023. Elsewhere, prospects may be marginally but permanently impaired.

 

Categories: Articles, Broadcast, Content, FTA, Markets, OTT, OTT, Pay TV, Premium, Production, Research, Social Media, VOD

Tags: , , , , ,