Local, Regional Pay-TV Channels in Asia Set to Thrive

SINGAPORE/HONG KONG: Pay-TV channels delivering local and regional content in Asia are poised to benefit in the years ahead, according to a new report, while those delivering acquired overseas content, particularly English-language general entertainment, will be "under pressure" as nonlinear, on-demand services proliferate.

The projections were released today by Media Partners Asia (MPA). The industry analyst reports that Asia Pacific pay-TV channels and content platforms earned revenues of $18.7 billion in 2013, a 9-percent gain. This is projected to rise to $19.5 billion in 2018, a 7-percent compound annual growth rate. By 2023, revenues are expected to reach $23.5 billion. Outside of China, subscription fees will lead the revenue gains, but local advertising will also grow in importance.

"Evolving strategies and improved execution are important if the pay-TV industry wants to build a business that thrives in the long-term," commented Vivek Couto, executive director of the MPA. "Most broadcasters have historically operated in a B2B mode and will need to adapt to an industry wide B2C transition. The evolution of linear channel brands as well as on-demand content will be all about consumers and relevance in a multiscreen world, especially if (1) subscribers are to pay more for video and broadband bundles; (2) advertising is to grow sustainably and capitalize on new return-path audience data; and (3) broadcasters are to extract more revenue from an ecosystem that is equally robust and challenged in a number of markets."

Among those expected to continue to thrive in the future are local general-entertainment networks in India, Japan, Korea and Taiwan. Locally produced channels by pay-TV platforms, particularly in Malaysia and Indonesia, are seen as being in a strong position, but monetizing that content outside of national borders will become increasingly important. The market for regional Asian content, largely from China, India, Korea and Japan, delivered on premium channels, is set to increase, MPA projects. There will continue to be a market for global brands that own and produce their own content, particularly for those that invest in local productions to complement their imported programming. Sports will continue to be a driver for the pay-TV business but profit margins will remain low for most involved in the sector unless value can flow from under-exploited local sports and prices for key franchises rationalize. Channels packaging largely overseas content will "be challenged and this space will consolidate amongst leading brands and well-curated channels," MPA reports. "The growth of non-linear on-demand services will mean that packaged linear content, especially English general entertainment, will remain under pressure."