The Asia Pacific OTT TV & Video Forecasts report by Digital TV Research says that revenues for OTT TV and video in 17 countries across the Asia-Pacific region are expected to reach $18.4 billion in 2021.
The total was $707 million in 2010 and $5.7 billion in 2015. The Asia Pacific OTT TV & Video Forecasts report estimates that China will overtake Japan in 2016 to become the market leader.
Simon Murray, principal analyst at Digital TV Research, explained: “Smartphone users will continue to drive OTT TV and video audiences. Smartphones are a more important OTT TV reception method than fixed broadband in the Asia-Pacific region—with the notable exceptions of Australia and New Zealand.”
Murray continued: “Much of the OTT activity in 2015 and 2016 has involved local players establishing themselves in their domestic markets. However, a handful of companies are taking an international approach.
“Although there is substantial demand for foreign fare, local content is necessary in each market to entice subscribers. Furthermore, international players benefit from partnerships with local players to gain from their distribution and retail infrastructure. International players must also adapt their prices to local conditions. With low levels of credit card ownership in most Asia Pacific countries, local payment systems smooth the process.
“Launched in March 2015, Netflix has achieved considerable success in Australia and New Zealand—markets most receptive to predominantly U.S. content. However, its January 2016 launches were conducted with little local content, little local price and payment sensitivity and without local partnerships.
“This may change, of course. For instance, Netflix signed a distribution agreement with Hong Kong’s Now TV in March 2016 and has carriage deals with Singapore’s StarHub and SingTel.
“Netflix’s big splash in January 2016 prompted others to up their game. Netflix may have to adjust its policy rapidly to secure market share before its rivals become too entrenched. Major markets such as China, India, Japan and Korea are already dominated by domestic players. Southeast Asia provides greater opportunities for international platforms.”
Advertising on OTT sites will remain the primary revenue source, bringing in $8.7 billion by 2021, up by $6 billion from 2015. China will supply $4.9 billion of the 2021 total, with Japan providing a further $1.47 billion. SVOD revenues will spike from $1.8 billion in 2015 to $6.4 billion in 2021. China will add $1.8 billion in revenues between 2015 and 2021—nearly sextupling its total. Download-to-own/electronic sell-through movie and TV revenues are expected to reach $1.9 billion in 2021—with $692 million from Japan—up from $691 million in 2015. OTT TV and video rental will increase to $1.3 billion in 2021.