Report: Digital drives APAC video industry growth
January 3, 2024
Advisory firm Media Partners Asia’s Asia Pacific Video & Broadband Industry 2024 report provides key insights to the adoption and monetisation of free-to-air TV, pay-TV, SVoD, premium AVoD and UGC / Social Video advertising in 14 Asia Pacific markets.
“The Asia Pacific video industry continues to experience a secular shift from TV to online in terms of engagement and monetisation,” commented MPA Managing & Executive Director Vivek Couto. “Improved connectivity, rising connected TV (CTV) penetration combined with the growth of local creator economies, investment in premium local content as well as the wide availability of premium sports streaming, will continue to drive dollars and eyeballs online.”
“Clear beneficiaries in the digital video economy include global and local technology and media companies investing in product and content with consumers at the forefront of their strategies,” added Couto. “According to MPA, eight companies had an aggregate 65 per cent share of the APAC online video revenue pie in 2023: Amazon Prime Video, ByteDance (including TikTok), Disney, Google-owned YouTube, iQIYI, Meta (video), Netflix and Tencent. Ex-China, certain local players are competing successfully and have scale potential, including Jio Cinema and Zee-Sony in India; Foxtel’s Kayo and Nine’s SVOD and BVOD platforms in Australia; TVer and U-Next in Japan; Tving in Korea; Vidio in Indonesia; and Viu across Southeast Asia.”
“New investments made by strategics and private equity in the online video sector in China, India, Indonesia, Japan, Korea and Southeast Asia are helping local and regional companies compete. The online video sector is also starting to rationalise with price increases in the SVoD category along with disciplined content and marketing investment, the introduction of ad tiers, new strategies to drive monetisation and the start of local market consolidation in Korea, Japan and India,” he explained.
“Amidst the shift to online and the growth of CTV, traditional linear TV is under pressure with a number of territories not expected to see a meaningful return of TV ad dollars. Local broadcasters are capitalising through premium AVoD and in certain cases, SVoD, most notably in Australia, India, Indonesia and Japan. Pay-TV subscription revenue has yet to be significantly disrupted by the growth of SVoD outside of markets such as Australia. However, historically strong markets such as India and Korea are under pressure while Malaysia, the strongest pay-TV market in Southeast Asia, is experiencing a deeper contraction across the traditional pay-TV segment, partially offset by the growth of bundled broadband and IPTV. In Indonesia and Thailand, the online VoD opportunity is increasingly more attractive than pay-TV,” he suggested.
2023 in Numbers
The APAC video industry grew by 5.5 per cent in 2023 as total revenue reached approximately $145 billion (€132bn), according to MPA estimates. The 2023 performance was driven by a 13 per cent growth in online video sector sales to $57 billion, partially offset by less than 1 per cent growth in the TV revenue pie to $98 billion. Excluding China, the APAC video industry grew by 3.2 per cent in 2023 with revenue reaching $81 billion, driven by a 13 per cent increase in online video sales to $30 billion while TV declined by 2 per cent to $51 billion. China remains the largest and most regulated video market in APAC, generating $64 billion in revenue in 2023. Ex-China, the largest markets in 2023 were Japan ($32 billion), India ($13 billion), Korea ($12 billion) and Australia ($9.5 billion) followed by Taiwan and Indonesia, both moving towards $3 billion.
Online SVoD grew 15 per cent in 2023 to reach $28 billion or 12 per cent ex-China to $12 billion while the AVoD pie grew 11 per cent to $29 billion or 13 per cent ex-China to $17 billion. UGC / social video continues to dominate the AVoD category with 80 per cent share while premium AVoD had 20 per cent share in 2023. Pay-TV subscription fees showed marginally below flat growth in APAC ex-China with revenue declines in important markets such as India and Japan while almost every market in Southeast Asia contracted. Pay-TV advertising grew in India but was decimated in Korea. Free TV advertising was down 2 per cent in 2023 across APAC ex-China with significant declines in Australia, Indonesia and Korea.
Industry Forecasts
MPA projections indicate that total APAC video industry revenues will grow at a CAGR of 2.6 per cent between 2023-28 to top $165 billion by 2028 or at a CAGR of 3.3 per cent ex-China to top $95 billion. China will be increasingly mature and grow at 1.7 per cent to reach $70 billion by 2028, followed by Japan ($35 billion), India ($17 billion), Korea ($14 billion), Australia ($11 billion) and Indonesia (close to $4 billion).
The APAC online video sector is projected to grow at 6.7 per cent CAGR to reach $78.5 billion in value by 2028 or 9.2 per cent ex-China to reach $46 billion by 2028. TV industry revenues, including advertising and subscription, will marginally contract at -0.4 per cent CAGR between 2023-28 to reach $86.5 billion by 2028 or at -1 per cent CAGR to $49 billion ex-China. Scaled TV markets that are expected to still grow but at a much smaller pace include India, Japan, Korea and Indonesia. There remain significant downside risks on TV advertising in Indonesia, India and Korea.