Online video is set to grow rapidly in Asia for the next five years, according to a new study of the region’s TV, video and online markets. The study excludes the largely separate mainland China market.
Media Partners Asia forecasts that online video will expand to 20% of total video industry revenues by 2023, up from 9% in 2017. That is likely to be propelled by new spending on content by online companies, which increase overall content spending in the region by 5% per year.
“The growth of subscription and ad-supported video services from Amazon, Facebook, Netflix and Google will propel these Facebook, Apple, Amazon, Netflix, and Google, companies to a combined 63% share of Asia Pacific online video revenues ex-China by the end of 2018,” said Media Partners Asia executive director Vivek Couto.
The report, to be presented this week at the MPA-hosted APOS conference in Indonesia, shows Google-owned YouTube to have 70-90% slice of a large and fast-growing online video advertising business in Australia, Japan, Southeast Asia and India. In addition, Amazon and Netflix have scaled quickly with subscription video offerings in Australia, India and Japan but have a long way to go in Southeast Asia and Korea.
The analysis could be changed by the potential all-in premium offerings from Disney, 21st Century Fox and Time Warner, which are expected to launch in the next five years. Amazon Prime Video has also yet to scale up in Australia and key markets across Southeast Asia.
Total content investment in TV and online video is expected to expand from $23.1 billion in 2017, to $30.1 billion by 2023. Online video platforms will account for 17%. For traditional TV players, increased content investment is mainly focused on sports rights, across Australia and India in particular, and entertainment on free TV across Southeast Asia.
Online video advertising, dominated by YouTube to date, continues to grow at a stellar pace, was worth $3.6 billion in 2017 and could hit $10.7 billion by 2022. Online video subscription fees are growing rapidly from a very low base, up 41% in 2017 to reach $1.7 billion, and forecast to grow at 12% per year to hit $4 billion by 2023.
Japan and Australia will remain the leading markets for online video, contributing more than 55% to Asia Pacific revenues ex-China in 2023. The third-largest market will be India, which will also be the fastest growing with a 26% average growth over 2018-23.