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22 April 2010

Significant profit ahead for APAC pay-TV
By Broadband TV News
© 2010, M2 Communications. All rights reserved.

Increasing consumption of pay-TV services in the APAC countries will ensure profits will grow significantly over the long term, according to a new report from Media Partners Asia. Asia Pacific Pay-TV & Broadband Markets 2010 says industry fundamentals are strong, driven by the growth of next generation services, increasing customer spend, and the emergence of large markets for pay-TV advertising. MPA executive director Vivek Couto said he expected consolidation within India and China: ³There is scope for cash generation amongst leading pay-TV operators in India, China and Indonesia as consolidation grows and capitalization improves. Consolidation and M&A will also help boost profits in Japan, Korea and Taiwan. Profits will remain sizable in Australia and Malaysia but earnings are likely to be volatile in Singapore and Thailand. Amongst broadcasters, media groups with strong brands continue to make money.

Exposure to large advertising and subscription markets is vital along with investment in local markets.² Despite recessionary pressure over Asia in the last 12 months, an additional 26.6 million subscribers have been added to reach 340 million, a 46% penetration of TV homes. Between them China and India contributed more than 75% of subscribers added during 2009. Pay-TV remains popular in these areas, but lower ARPU means the returns can be low. MPA estimates that by 2014, 446 million homes in Asia Pacific will be receiving pay-TV, growing to 513 million by 2020. Digital cable deployment will pick up in India going forward as financing grows and technology costs fall. Large-scale cable markets Japan, China and Korea will complete digital conversion over the next decade. The growth of DTH satellite will also prove important, especially in India, followed by Australasia, China, Indonesia, Malaysia, the Philippines and Vietnam. IPTV will be driven by Japan, Korea, China, Hong Kong and Singapore.