Over the next five years in Asia—excluding China—Facebook, Amazon, Netflix and Google (FANG) will retain more than 60 percent of online video revenues, Media Partners Asia (MPA) reports, with local players making incremental gains in markets such as India, Japan and Korea.
Nevertheless, the TV industry, which will record a slower pace of growth, will still have an 80 percent market share in 2022. Online video revenues outside of China will rise from 9 percent in 2017 to 20 percent by 2023, MPA says.
The findings are set to be presented as the APOS Summit kicks off in Bali. MPA’s research covers 12 markets across the region, exploring consumer and advertiser spend, content costs and market share.
“The growth of subscription and ad-supported video services from Amazon, Facebook, Netflix and Google will propel these FANG companies to a combined 63 percent share of Asia Pacific online video revenues ex-China by the end of 2018,” said Vivek Couto, MPA’s executive director.
YouTube has a 70 to 90 percent share of the online video pie in Australia, Japan, Southeast Asia and India. Amazon and Netflix have fared well in Australia, India and Japan, “but have a long way to go in Southeast Asia and Korea. There’s also a long runway for more growth in India,” Couto observed.
He continued, “Encouragingly, local and regional players with strong entertainment and sports IP together with, in many instances, large TV businesses, have invested in online video platforms to grab a bigger market share. This is especially true in India, Korea and Japan, although Southeast Asia lags.”
FANG’s dominance of the online video space “will dramatically alter growth and investment dynamics across key markets,” Couto continued. “We see significant upside for local and regional media platforms with attractive IP and strong execution as well as the appetite and patience to invest over the long term across digital video.”
The MPA research does not include potential premium offerings from Disney, 21st Century Fox and Time Warner, “which are likely to start gaining traction at some point over the next five years as global media consolidation accelerates. FANG’s share could also be greater once Amazon Prime Video scales up in Australia and key markets across Southeast Asia. This is not yet included in the assumptions underlying MPA’s analysis.”
YouTube and Facebook combined will account for 72 percent of online video advertising in Asia Pacific ex-China by 2023, down from 75 percent at the end of 2018. Amazon and Netflix’s combined share of the SVOD market should reach 35 percent in 2018 and rise to 37 percent by the end of 2023.
MPA reports that the total content investment in TV and online video (movies, entertainment and sports) across the markets surveyed hit $23.1 billion last year, a 6 percent gain on 2016. MPA projects an increase to $30.1 billion by 2023. “Such growth is largely anchored to new dollars being spent across online video, which will account for 17 percent of content investment by 2023 versus 10 percent in 2018,” MPA says.
Sports (notably in Australia and India), free-TV entertainment in Southeast Asia, and pay TV in India and Korea account for the bulk of the content investments.
Advertising and subscription fees across TV and online video grew 3.9 percent in AsiaPac—excluding China—last year, to $60 billion. MPA estimates a 3.8 percent compound annual growth rate from 2018 to 2023, reaching $77 billion, of which $15 billion will be from online video.
By 2023, the largest TV and online video markets in Asia Pacific ex-China will be Japan ($27 billion), India ($17 billion), Korea ($9.2 billion) and Australia ($8.2 billion). Southeast Asia will contribute $11.1 billion by 2023. India will remain the fastest-growing video market, followed by Southeast Asia and Australia.
Online video advertising, led by YouTube, rose 47 percent in the region (ex China) last year to hit $3.6 billion. MPA projects this will reach $10.7 billion in 2022. Online video subscription will top $4 billion by 2023.
Japan and Australia will remain the leading markets for online video, contributing more than 55 percent to Asia Pacific revenues ex-China in 2023. The third-largest market will be India.