MPA Report Reveals Growth of Asia Pacific Pay-TV, Broadband Markets

HONG KONG, April 20:
According to Media Partners Asia (MPA), pay-TV and broadband revenues in the
Asia-Pacific will grow from $44 billion today to $102 billion by 2015, with a
compound annual growth rate of 11 percent.

The MPA report, entitled Asia-Pacific
Pay-TV and Broadband Markets 2007,
measures the growing consumption and value of multichannel video and broadband
services over multiple distribution networks, including cable, satellite,
fixed-line and wireless, across 16 territories in the Asia-Pacific region.
According to the report, the growth in digital set-top box (STB) deployment in
Asia is reaching significant levels. The MPA predicts that net new digital
subscriptions will hit an absolute peak of 30 million in Asia by 2010, fuelled
by explosive growth in China and India; gradual transition in Korea; continued
expansion in Japan and Australia; and full-scale digital migration in most
ASEAN markets. By 2015, almost 50 percent of pay-TV households will have a
digital STB versus 11 percent in 2006. According to the MPA, total pay-TV
subscriptions reached 255 million in Asia last year and will climb to 446
million by 2015.

Broadband household
penetration, averaging 13 percent in 2006, could grow to 24 percent by 2012 and
31 percent by 2015. Penetration levels in Korea, Singapore, Japan, Taiwan, Hong
Kong and Australia will peak at 80-90 percent, on average, while penetration in
China will continue to climb, approaching 40 percent by 2015. Malaysia will
lead the ASEAN region with almost 50 percent broadband household penetration by
2015, while penetration levels in India will remain modest at 11 percent by
2015.

In 2006, the revenue
opportunity for pay-TV channels in Asia was estimated at $9.2 billion. This
could grow to $18 billion by 2011 and top $24 billion by 2015. In terms of the
volume of revenue generated, Japan, China, India and Korea lead the way.
Japan’s broadband sector will generate approximately $19 billion in turnover by
2015 and the overall broadband pay-TV market will be worth a sizable $28
billion in revenue. In China, total digital subscriptions are expected to scale
up from 10 million in 2006 to 70 million by 2011 and reaching 107 million by
2015. This should provide a foundation for pay-TV growth that is spurred by the
production of higher quality content, along with services such as HDTV, PVR and
VOD. For the first time, English Premier League Soccer matches will be shown on
a first-run basis on digital pay-TV in SD and HD formats, starting this year,
followed by the 2008 Beijing Olympics.

Boosted by cable’s rollout
of conditional access systems and aggressive subscriber acquisition by two DTH
satellite pay-TV platforms, India’s digital migration is also gaining momentum
with almost 1.2 million new digital pay-TV customers added during the first
quarter of this year (March quarter) alone. However, the report notes that
while India will lead the Asia-Pacific region in pay-TV industry revenue
generation, it still lags most of its neighbors in broadband.

Korea’s broadband pay-TV
sector will generate $10 billion in revenue by 2015 with broadband contributing
51 percent and pay-TV growing its contribution to 49 percent versus 32 percent
in 2006.

Cash generation and profitability
are rising in Asia’s pay-TV and broadcasting sectors, causing investors,
especially private equity firms, to rush into the ownership of brands and
platforms with dependable cash flow. As a result, M&A levels reached a
record $8.7 billion in 2006, and will continue to grow, driven by activity in
Greater China, India and Korea as consolidation and investment gains pace.