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China leads feevee

Country overtakes Japan as Asia's top pay TV economy

China is set to overtake Japan as Asia’s top pay TV economy this year with $7.5 billion in revenues, putting China fifth in world rankings, according to a report by the SNL Kagan media intelligence group.

China’s pay TV revenues grew 31.1% last year to $5.8 billion, with expansion driven by cable digitization and a 9% increase in pay TV households.

SNL Kagan forecasts China’s subscriber base will reach 259.5 million households as pay TV revenues grow at a 20.5% compound annual growth rate to $14.7 billion.

“China’s pay TV market continues to see exceptional growth as cable digitization and IPTV rollouts invigorate product offerings and boost average revenue per user,” said Eva Zhang, SNL Kagan media and communications analyst, in a statement.

IPTV is making headway, accounting for 3.8% of China’s pay TV subs in 2010, with 7.4 million households generating $493.2 million in revenues.

However, cable still dominates the pay TV landscape, accounting for nearly 96% of subscribers and 91.2% of revenues in 2010.

The report found that 47% of China’s cable subs had migrated to digital by the end of 2010, with 22.5 million households due to do so this year.

In terms of regulatory changes, the report expects measures by China’s cabinet, the State Council, backing the convergence of telecos, broadcast TV and Internet to reshape the pay TV landscape as telcos and cable companies enter each other’s businesses and offer triple-play packages. At the same time, rising broadband adoption will create opportunities for emerging online video players.

There are also signs that high-definition TV is gaining ground. Last year 2.5 million cable homes adopted the set-top-boxes and packages needed to access HD programming. By 2015, 17.2 million cable households are forecast to be HD enabled.

Major operators — including Jiangsu BC&TV Network, Shenzhen Topway, Hebei TV Network, Oriental Cable Network, Wasu Digital TV, Shaanxi BC&TV Network, Chongqing Cable Network, and Beijing Gehua — have VOD in place.

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