MPA Report Cites Robust Growth for Asia-Pac Pay TV

BALI: As the Asia Pacific Pay-TV Operators Summit kicked off in Bali, Indonesia, Media Partners Asia (MPA) released a new report indicating that the number of subscribers in the region will hit 696 million by 2020, reflecting a penetration of 68 percent.

According to MPA, there were 444 million pay-TV subscribers in the Asia Pacific last year, a 51-percent penetration rate (adjusting for multiple connections in the home). Excluding China, MPA projects 13 million to 14 million new additions every year between 2013 and 2016, slowing to about 7 million per year till 2020. The figures are revealed in MPA’s new Asia Pacific Pay-TV & Broadband Markets report.

China and India are expected to lead the way, contributing 66 percent and 21 percent, respectively, to pay-TV subscriber growth between 2012 and 2020. Excluding China—which, MPA says, has discouraged the development of a legitimate pay-TV industry as well as foreign investment in content and distribution—India’s share of Asia Pac subscriber growth will be 63 percent and Southeast Asia’s 16 percent, including 7 percent from Indonesia.

The number of digital subscribers is expected to soar from 257 million in 2012 to 539 million in 2017 and 626 million by 2020—a 90-percent penetration rate—driven by the DTV transitions in China, India, Korea and Taiwan. Within the digital base, MPA expects HD subs to rise from just 37 million last year to 160 million by 2020, led by China, India, Japan, Korea, Australia, Taiwan and Malaysia. DVR growth is expected to be slower, rising from 6 million last year to 18 million.

Overall pay-TV industry revenues are expected to deliver a 7.6-percent compound annual growth rate (CAGR) from 2012 to 2020, rising from $48 billion in 2012 to $86 billion in 2010. Subscription revenues are expected to rise from $37 billion to $65 million, a 7.4-percent CAGR. Ad revenues, calculated after projected discounts, are expected to rise from $11 billion to $21 billion. Revenue growth, like subscriber additions, will be dominated by China and India, adding 46 percent and 23 percent, respectively. Excluding China, India’s contribution would be 42 percent, followed by Japan at 13 percent and Korea at 12 percent.

Vivek Couto, the director of MPA, said of the latest findings: "A steady growth in population and a young demographic, combined with a rising middle class and the spread of wealth amongst local groups, is driving strategic decisions and execution in the pay-TV industry. These factors, in turn, will help boost household formation and consumer spends. This will also help grow pay-TV consumption and investment."

Couto notes that investments in local content, digitization and the growth of HD, premium and on-demand services will drive subscriber and revenue gains in the region.

Discussing the growth of broadband penetration and mobile devices, which are driving the consumption of illegal online video, the MPA report also notes the "defensive and aggressive" response by pay-TV companies to the problem of piracy.