China dominates as Asia’s online video sector soars | OTT | News | Rapid TV News
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Asia’s online video revenues are set to grow at a 21% CAGR across the region between 2017 and 2022, climbing from US$17.6 billion in 2017 to US$46 billion by 2022, according to Media Partners Asia research.

Vivek Couto Media Partners Asia MPAMedia Partners Asia (MPA) says China will continue to contribute the lion’s share of customers and revenues to the online video industry in Asia Pacific, accounting for 85% of subscription video-on-demand (SVOD) customers and 78% of online video sector revenues by 2022.

The growth in the Chinese market is, say researchers, its large-scale investment in original and acquired over-the-top (OTT) content, including early and exclusive windows, and a weak market for traditional pay-TV, creating an opportunity for premium content distribution and monetization through online video.

In addition, improvements in broadband reach and infrastructure, plus greater adoption of smart TVs and set-top boxes, and consumer adoption of seamless payment systems developed by the owners of top online video services are all aiding the overall market growth. The leading companies are also using data analytics and bundling to create ecosystems for content, commerce and communication.

Although advertising supports the majority of China’s video streaming services, subscription services are on course to attain 33% of the sector’s revenue in 2017, compared to 18% in 2015 and 26% in 2016, said MPA.

Japan, Australia, India, Korea and Taiwan are the next largest markets after China for online video revenues and distribution, the market research analysts found. Factors fuelling the growth in these countries include a robust payment infrastructure, along with the growth of advertising-funded platforms and the steady rise of premium, subscription-based platforms. In Southeast Asia growth will be stunted due to piracy and a less prevalent payment infrastructure, however SVOD revenues will grow rapidly from a very low base.

“Advances in telecoms and payment infrastructure continue to point the way forward for the online video sector in Asia Pacific, although business models and regulations continue to evolve in a sector that’s still nascent in most territories,” said Vivek Couto (pictured), executive director, MPA. “Content curation, packaging and pricing remain critical,” he added.

“Services anchored to nimble, robust and sustainable business models – built around strong execution and scalable content consumption – are rising to the top,” he said, adding that demand for recent windows for franchise-based Hollywood product is also strong.

According to MPA, the online video advertising sector in the Asia Pacific region will grow from under US$12 billion in 2017 to more than $25 billion by 2022. Excluding China, this opportunity represents $7 billion by 2022 compared to $3 billion in 2017.

YouTube and to some extent Facebook will remain dominant, with an average 75% market share of online video advertising between them ex-China by 2022, versus 85% in 2017.

Couto suggests the value of branded destinations will increase rapidly within the online video ecosystem as platforms and operators forge partnerships with broadcasters and content players. Additionally, he says, leading local and regional players outside China will exploit the massive online video advertising opportunity that exists.