Subscriber and revenue growth is slowing across the Asia Pacific pay-TV business, but the sector is still expected to increase by a compound annual growth rate of 6.6 % from 2014 to 2019, Media Partners Asia projects in a new report.
The Asia Pacific Pay-TV & Broadband Markets report projects a “robust future” for the business, with revenues rising from $52 billion last year to $72 billion in 2019 and $84 billion in 2023. There are pressures on the region’s pay-TV industry though. The report anticipates a “significant slowdown” in Indonesia and Thailand that will be partially offset by major expansion in the Philippines and “decent gains” in Malaysia. Revenue gains will largely be led by India, Korea and China, plus the Philippines and Hong Kong. Australia will see strong subscriber gains, but revenue growth will be slower.
Subscriber gains are slowing, down from the 15 million to 18 million added outside of China from 2008 to 2011 to 10.8 million last year. Media Partners Asia (MPA) sees a spike in sub gains occurring in 2016, thanks to continued digitalization in India, with deceleration to follow. The base is expected to grow from around 500 million last year to just under 600 million by 2023. By then, the pay-TV penetration rate should rise to 61%, up from 54% in 2014.
By 2023, all major pay-TV markets in Asia will be 100% digital, excluding India (70 %), Pakistan (32%), Sri Lanka (34%) and Thailand (53%).
HD penetration is expected to rise to 44 %of digital pay-TV subs by 2023. But Australia, China, Korea, Japan, Malaysia, New Zealand, the Philippines and Singapore will all have HD penetration rates of between 50 % and 90 % by 2023.
“Pay-TV operators are striving to either reignite growth or sustain existing momentum with a new cycle of value creation,” said Vivek Couto, MPA’s executive director. “A number of operators are repackaging products with improved price points (i.e. Australia), tiering (i.e. Hong Kong) and slimmer, low-ARPU packs (i.e. Philippines). Most players have invested to enhance program windows and offer more VOD. Others are climbing the curve of product innovation with all-HD platforms, with more local and Asian content, as well as live sports, a key mainstay for pay-TV.”
Media Partners Asia (MPA) identifies value-added services, led by VOD, as being the fastest-growing segment, with revenues rising at a 13.2 % CAGR from 2014 to 2019. Australia, China, Japan and Korea are among the leading VOD markets, along with Malaysia and Hong Kong. TV Everywhere services will not generate significant revenue growth, but will be beneficial in reducing churn rates. Pay-TV advertising revenues are expected to hit about $14.3 billion in 2019, up from $10 billion last year.