A new report from Media Partners Asia (MPA) sees Asia-Pacific pay-TV revenues rising by 5 percent to top $56 billion this year.
The report, Asia Pacific Pay-TV Distribution, further forecasts a 3-percent compound annual growth (CAGR) increase in revenues (subscription and advertising) from 2018 to 2023, topping $66 billion. In that time, the number of subscribers will increase from 645 million to 696 million, a 2-percent CAGR.
China will see a 3-percent CAGR to reach revenues of $25 billion in 2023. Meanwhile, Indian revenues are expected to grow by an 8-percent CAGR to reach $16 billion, making it the highest growth and most scalable pay-TV market of the 17 AsiaPac territories covered in the report. Korea is forecast to see a 3-percent CAGR for pay-TV revenues of $7.4 billion in 2023. Japan will grow at a slower pace of just 1 percent to reach $7.1 billion in the five-year period. There will be moderate momentum in Indonesia and the Philippines, while Australia, Hong Kong, New Zealand, Malaysia, Singapore and Thailand will see pay-TV revenues fall in the forecast period.
The pay-TV subscriber base is expected to rise by 3 percent this year to reach 645 million, 57 percent of all TV homes. Penetration will drop to 55 percent when adjusted for multiple subscriptions, largely due to cord-cutting in China. Outside of China, net customer additions across the region will slow to 6.5 million this year from 10.4 million last year, for a total of 267 million subs, rising to 288 million by 2023. India will account for almost half of this year’s growth (47 percent), followed by Indonesia and the Philippines at 12 percent each, Korea (10 percent), Pakistan (7 percent) and Sri Lanka (3 percent.)
Vivek Couto, MPA’s executive director, commented, “Pay-TV stakeholders are adjusting to new realities as the industry shifts to IP-based distribution. The growth of high-speed broadband and online video is driving fundamental changes in content consumption and investment across key markets. This, together with piracy, will continue to adversely impact pay-TV industry growth. There will be more fixed broadband subs than pay-TV subs across much of Asia Pacific by 2021, while the gap between the mobile broadband subs base and pay-TV and fixed broadband subs will further widen as mobile networks emerge as a major means for mass content distribution, accelerating the shift in content consumption from households to individuals. M&A activity for the Asia-Pacific broadcasting and pay-TV sectors for 2017 and the first half of 2018 reached $10.5 billion in aggregate, with the biggest deals taking place in Australia, India and Korea. More M&A and consolidation is likely in these markets with Southeast Asia likely to join the action over 2019-20.”