Driven largely by China, online video revenues across 14 markets in Asia Pacific are projected to rocket from $12.8 billion last year to $35 billion by 2021, a compound annual growth rate (CAGR) of 22%, according to a new report.

Media Partners Asia’s Asia Pacific Online Video Distribution report also forecasts a boom in online subscription video-on-demand (SVOD) in the region, with paying customers jumping from 177 million this year to 360 million in five years, with the majority in China.

Total SVOD revenue is expected to reach $13 billion by 2021, a CAGR of 28%, up from $3.7 billion this year. China will generate 80% of that business, with Japan, Australia, Korea and Hong Kong as the next tier of markets. The South East Asian SVOD market will grow from a low base to a still-modest $200 million in revenue by 2021, the report says. However there are more than 140 OTT video platforms  in Asia, of which around 80 offer SVOD services, so MPA expects a consolidation in that sector.

The proliferation of smart TVs, mobile phones and smart boxes is expected to help spur online video revenues in China from $7 billion in 2015 to $26 billion in five years, accounting for 76% of that pie. Of that, $16 billion will be generated by online ads (up from $5.4 billion) and $10 billion in online subs.

MPA executive director Vivek Couto told Forbes, “Historically the online video market has not been regulated in China, unlike pay-TV and free-to-air. However, the sector is coming under regulation now and restrictions on foreign content may limit U.S. suppliers in particular. Meanwhile, the big players – Tencent, Alibaba, Shanghai Oriental Pearl, LeEco and iQiyi – continue to spend significant sums on premium Asian content, Chinese content and their own productions.”

Couto rates broadcaster Nippon TV’s Hulu as the most successful SVOD service in Japan on the back of local content such as day-and date programming from Nippon TV, augmented with deals with HBO, Twentieth Century Fox, National Geographic and A&E Networks. Amazon Prime Video is also performing well in Japan after Amazon Prime entered the market several years ago.

“Netflix has made a slow start in Japan and has more than 1 million subs in Australia but it has not replicated that success elsewhere in the region,” he said. “The downside for Netflix is they might have to adjust their pricing in some of the greenfield markets where ARPUs (average revenue per sub) are low.”

Online video advertising, which represented less than 15% of the Asia Pacific digital ad spend in 2015, is forecast to see its share grow to 22% by 2021. Total online video ad sales will reach approximately $22 billion by 2021, up from $9 billion this year, a 19% CAGR. China will devour more than 70% of that pie, with Japan, Australia and India leading the other markets.

Couto foresees a growing future for social media networks as Facebook and Twitter become more heavily involved in online video, observing, “These guys see a long-term business in video and they are trying to work out how to get seats at the video distribution content table, as we have seen with some of the sports rights in the U.S.  They are working with the content owners and aggregators to give them analytics to help fine tune their programming decisions.”

Retail subscription dollars will take longer to eventuate in emerging South East Asian economies and India. The report observes, “SVOD in these markets requires greater education, marketing, scale (as pricing power will always remain modest) and consolidation, as more local and vernacular content comes online, along with premium Asian content with cross-border appeal (i.e. Chinese, Indian, Korean) as well as Hollywood and international content that’s already being exploited.”

Mobile consumption of clips and short-form video continues to climb across the region, boosting the creation of new local content in China, India and Korea, and will drive demand for other genres including sports, factual and lifestyle.

Asia Pacific fixed broadband subs will reach 345 million this year and expand to 425 million by 2021. This means that average broadband household penetration will rise from 35% in 2016 to 41% in five years, with the most significant growth through fiber network upgrades and the roll-out of next-gen broadband cable.