HONG KONG — Pay TV is set to grow by 11% a year in Asia over the next five years, lifting total revenues from $53 billion in 2007 to $86 billion by 2012.
That is according to a study by Hong Kong-based research house Media Partners Asia.
But MPA’s more surprising finding is that best prospects are to be found in two territories that are already well developed — Japan and Korea — as well as the huge, but risky Indian market.
“Big gains are likely to be realized from digital pay TV and next-generation broadband with the build-out of fiber and advanced cable networks,” said MPA boss Vivek Couto.
In 2007, regional pay TV penetration reached 43%. This could grow to 52% by 2012 and 55% by 2017, according to MPA, with digital penetration, at a low 7% in 2007, climbing rapidly to 28% by 2012, and reaching 36% by 2017.
The report, “Asia Pacific Pay TV and Broadband Markets 2008,” says that biggest digital growth may come from China and India.
But it suggests that India will have more impact for pay TV distributors and content suppliers as China sticks more closely to cable TV and free TV models.
MPA forecasts that “consumer demand for higher broadband speeds, greater connectivity and new applications will overtake demand for low prices, especially in developed broadband markets.”
It adds: “Penetration levels will peak in Korea, Japan, Taiwan and developed markets, while China will lead emerging markets. In terms of size, China will remain the largest market for broadband in the region with close to 195 million broadband users by 2017.”
Content owners will thrive if they make the right choices about markets and approach.
Pay TV channels and content providers could see their subscription and advertising revenues rise from $10.6 billion in 2007 to $20 billion by 2012 and $28 billion by 2017, report predicts.
It notes in particular growth of 20% per year in the Indian pay TV ad market, proliferation of digital pay channels in Korea and Japan and local broadcasters moving into pay TV in Indonesia.
Away from the report, Couto predicts that the Hollywood media congloms that have not yet set up their own pay channels in Japan and Korea will do so within the next 12-18 months.
While the market is seeing strong pay TV advertising and subscriptions growth, Korea caps foreign ownership of TV stations. That means outside companies will have to find local partners.
However, there are concerns about the high levels of competition between pay TV platforms in India, regulatory barriers in China and Taiwan, and potential advertising migration from payboxes to online in Japan, Korea, China and India.
“We highlight risk and reward throughout Asia, especially in India, where global majors have entered into large-scale investment joint ventures with domestic broadcast media groups,” Couto said. “There remains scope for profitable growth in Korea and Japan, partially offset by regulatory and commercial barriers.
“Korea will become increasingly important due to the emergence of a large market for pay TV advertising and the growth of digital pay TV. Indonesia should emerge as a significant opportunity because of the growth of satellite. We also maintain a positive outlook on Australasia, Malaysia and Hong Kong.”