The latest regional round-up by industry analysts Media Partners Asia (MPA) has found that Asia-Pacific pay-TV industry revenues are set to grow at a CAGR of 3% between 2019-24 to top US$66 billion by 2024
As an indication of the growth pattern, this is actually below the 2019 trajectory of 6% for subscription fees and local and regional advertising sales to reach US$57 billion.
Examining geographic trends, MPA found that over the 2019-24 period, the Chinese market will grow at a CAGR of 3% to reach US$27 billion by 2024. In comparison, the more commercial India market is set to grow at a CAGR of 6% to reach US$15 billion by 2024, ensuring India remains the highest growth and most scalable pay-TV market in the region. MPA noted though that there remains significant near term uncertainty in India however due to the impending enforcement of recent regulations by the Telecom Regulatory Authority of India (TRAI). Korea was forecast to grow at a CAGR of 3% to reach US$8.3 billion in revenue by 2024 while Japan will climb 1% to US$7 billion by 2024.
Excluding China & India, total Asia Pacific pay-TV revenue grew only 1.3% in 2019 to reach US$23 billion and is projected to climb 1.1% CAGR to reach US$25 billion by 2024. Australia, Hong Kong, New Zealand, Malaysia, Singapore, Taiwan and Thailand are set to register CAGR revenue declines in the range of 1-5% over 2019-24 while growth will moderate in the Philippines and Vietnam.
Cord-cutting is now a phenomenon in the region but is regarded as starting to stabilise after 2021 though revenue and subscriber declines are set to continue in Australia and New Zealand, key Southeast Asia markets and Taiwan. 2019 was a peak year of cord cutting with a net decline of almost a million subs across the six markets.
Driving the overall 2019 revenue growth were 12.8 million net new subscribers with India contributing 47% and China, 37%. The total Asia Pacific pay-TV subs base grew 2% in 2019 to reach 630 million, representing 62% penetration of total TV homes, adjusted for multiple subscriptions in a home. MPA projections indicate that total Asia Pacific pay-TV subs will grow at a CAGR of 1% between 2019-24 to reach 663 million by 2024, representing 63% penetration, adjusted for multiple subscriptions.
India is forecast to contribute almost half of net subscriber additions in the Asia Pacific over the next five years. Net additions across Asia Pacific ex-China and India came in at 2 million in 2019 with Korea contributing 42% driven by telco IPTV services. By contrast Australia, Hong Kong, Malaysia, New Zealand, Singapore and Thailand all registered declines. MPA projections indicate that pay-TV subs in Asia Pacific excluding China and India will grow at a CAGR of 1.3% between 2019-24.
Going forward, MPA predicts that operators will be increasingly focused on tighter bundles and packages, stronger brands and flexible options for customers, anchored to improved technology with online options.
Commenting on the Asia Pacific Pay-TV Distribution 2020 report, MPA executive director Vivek Couto said that “mushrooming consumer choice and piracy across the digital ecosystem has created cracks in the traditional pay-TV ecosystem. This left business models remain dependent on the monetization of branded channels and sports rights in the pay-TV window.”
“The growth of legal online video services means that pay-TV operators and content providers are striving to distribute and monetize online,” Couto remarked. “This strategy is being executed at a significant potential cost with the risk of cannibalization and growth at the expense of household-based pay-TV. For pay-TV operators with a broadband business, such a strategy could lead to fresh opportunity as key players re-aggregate new bundles of branded channels and OTT video. For others, long-term subscriber erosion is a reality with the emphasis on serving and retaining existing premium customers and managing content costs and where possible, entering into partnerships and M&A with telcos and broadband operators.”