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The battle between over-the-top streaming video and pay-TV in the vast Asia-Pacific region is poised to become more complex over the next five years, according to consultancy firm Media Partners Asia on the eve of its APOS summit conference. So too are the contests between free- and paid-for business models, and the skirmish between short-form and long-form content.

Media Partners Asia predicts few outright winners. Regional operators will succeed in some markets. Once-derided telcos may again become valuable partners.  And pay-TV may fail to collapse uniformly. But the consultancy says that the potential size of the overall market remains huge and worth playing for.

Asia’s heavy weighting to mobile broadband and the endurance of the ad-supported (AVOD) business model will remain key factors. Media Partners Asia forecasts more than 3.5 billion mobile broadband users in the region by 2025.

The company says that AVOD shrank under COVID conditions last year, but is now bouncing back strongly. In 2021, revenues are forecast to expand 13% to $16 billion and grow thereafter to $23.2 billion in 2025, a 10% compound average growth rate from 2020. In India, that growth rate will be 25%.

“The outlook is improving with a recovery evident in China, India, Korea and parts of Southeast Asia from the second half of 2020,” said Vivek Couto, Media Partners Asia’s executive director.

To unlock their potential, subscription-VOD companies will have to lean on the consumer relationships of the telcos – even in developed markets. Telcos now account for 50-60% of subscriptions in India and Indonesia, close to 40% in Japan and 30-35% in Korea, Media Partners Asia says.

Pay-TV’s decline could be dramatic in Australia (it still has more than 50% revenue share in 2020, but that could fall to 30% by 2025, the company forecasts) and Thailand (collapsing from 66% of consumer spend to 18% by 2025). Media Partners Asia also calculates that Disney Plus in just a few months of operation has overtaken Stan to become Australia’s second largest streamer, after Netflix.

But in places where the wider video entertainment market is still growing strongly, the decline will be less perceptible. “In China, pay-TV’s share of subscription is slowly eroding, but it will still account for 55% in 2025, driven by strong IPTV,” says the company. “Online video is growing rapidly in India, with subscription revenues expected to triple by 2025, but strong pay-TV will still get 80% of the consumer spend in 2025.”

People are still spending, albeit at low ARPUs, to watch live TV and sports, particularly in India and the Philippines. Former Disney and TikTok executive Kevin Mayer, is expected to discuss the viability of sports and OTT, while Mayer and former 21st Century Fox boss James Murdoch will address the issue of stacking, multiple subscriptions and whether aggregation today is different from yesterday’s cable-TV bundle.

Multiple APOS speakers, including Netflix’s Bela Bajaria, are expected to discuss content trends. These have implications as companies invest heavily and attempt to build global scale operations from Asia.
Korean content, especially drama series, is already a clear winner throughout much of the region. Korean shows account for more than 30% of consumption in markets including Malaysia, Singapore and Thailand.

Japanese shows, and animation in particular, are gaining ground and Chinese content is coming up slowly – predominantly on AVOD platforms. Local content is important for the Indian market, but it travels less well than other varieties.

Intense discussion can also be expected about short form video as it erodes consumers’ time spent watching long-form content. With the blockbuster IPO of Kuaishou and the more prosaic second listing of Bilibili as recent experience, and the anticipated flotation of TikTok and Douyin owner Bytedance still to come the Chinese experience may be instructive.