June 4, 2015
Asia pay-TV sector set for "sustainable" revenue growth: MPA
By Rebecca Hawkes
© 2015 Rapid TV News All Rights Reserved

The Asia Pacific pay-TV industry "remains vital" with a 6.6% average annual growth rate from 2014 to 2019, according to the latest report from Media Partners Asia (MPA).

The regional pay-TV market will touch US$72 billion in 2019 and be worth US$84 billion by 2023 - up from $52 billion in 2014.

"Pay-TV operators in mature and emerging markets are striving to either reignite growth or sustain existing growth with a new cycle of value creation. A number of operators are repackaging products with improved price points, tiering and slimmer low-ARPU packs," said Vivek Couto, executive director, MPA.

"Most players have invested to enhance programme windows and offer more VOD [video-on-demand]. 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."

The region's pay-TV operators are, however, under pressure as the pace of both subscriber and revenue decelerates, say researchers. A significant slowdown in Indonesia and Thailand will, says MPA, "apply the brakes" to momentum in South East Asia, which also sees "significant expansion" in the Philippines and "decent gains" in Malaysia.

The most robust revenue growth in Asia will be seen in India, Korea, China, Hong Kong and the Philippines. Australia's subscriber momentum will be much improved, however, its revenue growth will "lag" according to MPA.

Excluding China, which remains a utility oriented and highly regulated pay-TV market, Asia added 10.8 million net new pay-TV customers in 2014. This slowed from the 11.2 million added in 2013, and was a significant reduction from the average 15 million to 18 million net additions that occurred between 2008-11.

MPA projections indicate a spike in net additions will occur in 2016, due to India's next phase of cable digitalisation, with a steady deceleration likely to follow.

Including China, total pay-TV subscriptions in Asia Pacific will rise from 500 million 2014 to 598 million by 2023, says MPA. Adjusted for multiple connections in a household, pay-TV penetration of TV households will grow from 54% in 2014 to 61% by 2023.

Digital penetration of pay-TV subscriptions in Asia Pacific will increase from 70% in 2014 to 90% by 2023 as the region's major pay-TV markets go 100% digital except for India (70%), Pakistan (32%), Sri Lanka (94%) and Thailand (53%).

HD penetration of total digital pay-TV subscriptions will grow from 24% to 44% over the same period, with penetration between 50-90% expected in Australia, China, Korea, Japan, Malaysia, New Zealand, the Philippines and Singapore.

Value-added services (VAS), driven by VOD, will be the fastest growing segment for Asia's pay-TV industry, as revenues climb at a 13.2% CAGR from 2014-19. Key VOD markets include Australia, China, Japan, Korea, Malaysia and Hong Kong.

Authenticated TV everywhere services are not expected by the analysts to generate "meaningful revenue but remain a churn reducer in most markets".

Regional pay-TV advertising will grow from $10 billion in 2014 to $14.3 billion by 2019, says MPA, with growth driven by high base markets such as India and Korea along with China. Opportunities in pay-TV advertising in South East Asia will, the company says, remain under-exploited due to limited penetration and poor execution.