Slowing growth in subscribers and revenues for pay-TV channels across the Asia Pacific is expected to lead to “accelerated consolidation” in the sector, according to Media Partners Asia (MPA).
MPA released the findings in the latest edition of its Pay-TV Networks Channel Database, which covers Disney’s branded channels, Star India and Fox portfolio; the WarnerMedia networks (HBO and Turner); Sony India and SPT’s pan-Asian branded networks; Discovery (including Scripps); beIN Media; Viacom (excluding Viacom18); NBCUniversal and A+E Networks.
Revenues across those networks were up just 1 percent in 2018 to $4.9 billion, as compared with 5-percent growth in 2017. Combined EBITDA fell by 5 percent in 2018 to $0.9 billion. While India has largely been immune to the slow-down in AsiaPac pay-TV, new regulations are threatening subscription and advertising revenue gains. India accounted for 62 percent of pay-TV revenues for the 13 groups covered in the MPA database. Excluding Star India and Sony India, meanwhile, Southeast Asia is the biggest market with 32 percent of revenues, followed by India with 18 percent, Japan with 16 percent and Hong Kong/Taiwan and Australia/New Zealand with 10 percent each. The biggest revenue generators in Southeast Asia are Disney/Fox, WarnerMedia and beIN Media.
“Consumer demand for traditional pay-TV has been impacted forever by high-speed broadband, which is driving rapid increases in online video consumption as well as piracy,” said Vivek Couto, executive director of MPA. “These trends have intensified downward pressure across Asia’s pay-TV ecosystem, especially in Southeast Asia, led by Singapore and Malaysia, alongside secular shifts in Australia and New Zealand. This will accelerate consolidation as well as major shifts in how channels and content are marketed and sold. Pay-TV’s first big wave of consolidation, led by Disney buying Fox and AT&T buying branded networks from Turner and HBO, will play out with momentum across Asia Pacific over the next year. Future consolidation and rationalization will be defined by global moves and M&A possibilities involving large assets in India. Major players such as Discovery, CBS, Viacom, A+E, Sony and Universal are now competing for the consumer wallet with an increasingly scalable Disney and a newly integrated WarnerMedia within AT&T.”
By genre, factual and lifestyle dominated with 21 percent of revenues in 2018, slightly ahead of kids, followed by English general entertainment at 17 percent, sports at 15 percent, English-language movies at 12 percent, Asian entertainment at 9 percent, news at 3 percent and music at 2 percent.
MPA also reports that online video revenues in the region, excluding China, were up 40 percent in 2018 to $8 billion, including about $5 billion in ad revenues (a 36-percent gain) and $2.8 billion in subscription revenues (a 50-percent increase).