Asia Pay-TV: Structural Headwinds Forecast to Slow Recovery (Report)

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The pay-TV industry in the Asia-Pacific region saw advertising and subscription revenue shade downwards in 2020. And while some recovery is now under way, structural headwinds and weakness in key markets are likely to keep overall growth in low single figures, according to a new report.

Data published in the latest edition of Asia Pacific Pay-TV Distribution, from research firm Media Partners Asia, showed that the overall market contracted by 3% in 2020 to $53 billion. Subscriber numbers are estimated to have grown by 3% in 2020 to reach 668 million (with China contributing more than 90% due to bundling by China Mobile), representing 62% penetration of total TV homes, adjusted for multiple subscriptions in a household.

Media Partners Asia said that the COVID-19 pandemic and its negative impact on live sports dented both subscriber numbers and per subscriber revenues (APRU), especially in the first half of 2020.

It forecasts compound annual growth of 3% between 2020-25 giving a market size of $60 billion by 2025. India, China and Korea remain growth markets. But others including cord-cutting mature markets Australia, Hong Kong, Singapore and Thailand are forecast to contract. Japan and Malaysia will remain relatively flat.

“The IP distribution of video content bundled with broadband services is helping to prolong the shelf life of pay-TV channel bundles while also providing a basis for integration with new OTT video services,” said the report. “In large emerging markets such as India and Philippines, strong demand for live sports and entertainment channels fuels the growth of low-ARPU DTH satellite platforms which will remain dominant but increasingly mature.”

“Structural dynamics and shifts mean that operators are focused on scaling down content costs and renegotiating sports rights while saving costs on entertainment channels as they invest in revenue sharing partnerships with OTT platforms such as Netflix, Disney Plus and HBO Go and HBO Max and regional players such as Viu,” Vivek Couto, Media Partners Asia’s executive director, told Variety.

“Premium sports is likely to remain a vital part of the pay-TV anatomy over the medium term while local and select niche international channels distributed on the basic tier will remain important across India and key Southeast Asia markets. At the same time, consolidation in distribution through mergers and acquisitions will continue to grow in markets such as China, India, Japan and Korea.”