Asia Pac pay-TV faces slowing growth | Media Analysis | Business
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A general economic slowdown, competition and piracy are set to apply a handbrake to the Asia Pacific pay-TV industry says a report from Media Partners Asia (MPA).

The industry analyst predicts its Asia Pacific Pay-TV & Broadband Markets report that from 2016 to 2021, the pay-TV industry in 18 major markets of the region will collectively grow on average at 5.8%.

MPA projects that pay-TV industry sales across in Asia Pacific will climb from $54 billion in 2016 to $72 billion by 2021, rising thereafter to US$81 billion by 2025. Yet it notes that the pace of pay-TV subscriber and revenue growth is slowing, weakened by an economic slowdown and increasing competition from both legal and illegal alternatives.

Looking at specific countries, the report found that the pay-TV industry in China remains the largest in the region and is becoming increasingly digitalised. However, pay-TV growth opportunities for broadcasters were limited however, due to increasing regulation as well as competition from free and paid online video services.

In addition, pay-TV subscriber growth declined or substantially decelerated in Hong Kong, Indonesia, Malaysia and Singapore in particular. By contrast, India and Korea remain two of the region’s largest and most scalable pay-TV opportunities. Revenue growth will also accelerate in Australia and the Philippines, largely thanks to subscriber growth. MPA analysts also lowered subscriber growth forecasts across much of Southeast Asia, especially for Indonesia, Malaysia and Singapore, although ARPU (average revenue per user) should remain resilient in both Malaysia and Singapore.

Interestingly given its success in the US and Western Europe subscription video-on-demand (SVOD) services were found by MPA to have had a negligible impact on pay-TV so far. This is despite the global launch of Netflix earlier this year, in addition to increasing competition among lower-priced regional and local SVOD services.

MPA also unearthed some worrying user trends. It found that at the same time as more pay-TV operators are rolling out connected set-top boxes that can incorporate OTT video services, most pay-TV subscribers downgrading or cancelling pay-TV services are moving instead to illegal services, as well as to free, ad-supported options across both TV and online video. On a brighter note, some operators were aggressively hard-bundling video content, including pay-TV channels, with high-speed broadband. This said MPA was helping drive subscriber growth, especially in a number of Southeast Asian markets.

Commenting on the report, MPA executive director Vivek Couto said: “Pay-TV providers are increasingly focused on repackaging and repricing both linear and on-demand services. Local and regional Asian programming is also becoming increasingly important. At the same time, sports, kids, infotainment and Hollywood movies will remain mainstays of the pay-TV bundle, although channels offering Hollywood TV series are being disrupted by both legal and illegal OTT.

“Few pay-TV operators have been able to capture or monetise large-scale online video viewing so far, although early results in Hong Kong and Korea are encouraging. The goal is driving the next cycle of customer growth and consumer spend. Pay-TV user interfaces and data analytics are improving, although often too slowly to effectively compete with legal and illegal OTT rivals. Increasingly, viable pay-TV operators will become drivers and targets for M&A and consolidation, as the worlds of pay-TV, broadband and OTT collide and converge in the wider context of media and telecoms.”