3 March 2006

SINGAPORE -- Asia's pay television revenues will reach $32 billion by 2010 and more than $45 billion by 2015, up from revenues of $18 billion in 2005, according to new regional report "Asia Pacific Pay TV and Broadband Markets 2006," released in Asia on Thursday.

Regulatory constraints are expected to limit potential over the next 10 years, particularly in China, India, Korea and Taiwan, said analyst Vivek Couto, director of content and research for Media Partners Asia Ltd., which issues the annual report.

These four countries are Asia's biggest consumer markets. "As a result, our projections are conservative," Couto said.

Pay TV subscription fees in the 16 Asian markets covered by the report totaled $14 billion in 2005. Advertising revenues stood at about $4 billion.

Pay TV platforms in Australia and Japan earn top dollar from subscription services, while those in China, India, Taiwan and Korea rely more heavily on advertising, the report said.

Penetration of total TV homes grew 36% in 2005, led by Korea, Taiwan, India and Hong Kong.

The number of digital pay TV subscribers rose 37% year-to-year to 14.4 million. MPA attributed the growth to aggressive two-way deployments in Australia, Japan and Singapore and robust growth in Malaysia and Hong Kong.

India is forecast to emerge as Asia's leading revenue-generating pay TV market by 2015, the report said.

In 2008, India will be the largest direct-broadcast satellite market. And by 2010, India will overtake Japan as the leading revenue-generating market for cable and satellite programrs.

The report describes pay TV in China over the next decade as "a long road and possibly a leap of faith."

"The market for digital pay TV in China remains limited by content scarcity brought on by regulation and the continued ban on foreign investment in cable," Couto said.

"Potentially, global media will be able to participate more actively in program production, licensing and perhaps the distribution of new 24-hour channels in China over the long term. This, together with growing competition from IPTV and DTH (direct-to-home), should help accelerate digital pay TV growth, boost the market for pay TV subscriptions and help grow cable and satellite advertising," he added.

In the long term, MPA expects regulations across the region to become more liberal.

"Regulators, increasingly aware of the significant capital costs of media and communications infrastructure, will move on greater liberalization in the long term. At the same time, we also expect market forces to prevail over time with scalable investments in content and distribution likely to grow over the next decade," Couto added.

The report covers the distribution of multichannel video and broadband services across 16 territories in the Asia-Pacific region.