Video content budgets across Korea, India and Southeast Asia climbed 21% in 2021 to reach $10.4 billion. They are forecast to grow a further 15% to $12 billion in 2022, according to the 2022 edition of the Asia Video Content Dynamics report.
The report, published by consultancy and research firm Media Partners Asia (MPA), attributed the 2021 surge to key operators replenishing content pipelines after the initial waves of COVID-19 depleted programming inventories in 2020. All content verticals except theatrical generated strong gains. Key film costs contracted 2% as pandemic restrictions delayed releases in many markets, the report found. However, film is projected to be the fastest growing sector, at 140%, as cinemas screen fresh movies. Some film markets, such as India and Indonesia, are expected to fully recover but in other markets, a return to pre-COVID heights may take until 2023, the report predicts.
Korea and India were the largest content investment markets with a combined $7.4 billion, while other markets reached $400-900 million each.
Pay-TV was the largest vertical with 46% of total industry content investment, reflecting mature markets in India and Korea, while streaming content was the fastest growing vertical, up 83% year-on-year to become the second largest vertical with 26% of industry investment. Korea and India enjoyed particularly strong streaming investment growth, the report found, while Thailand and Indonesia contributed significantly. Free-to-air TV was the third ranking vertical with 25% of the total.
The report projects overall robust growth, with online video projected to climb by $700 million. India and Korea will drive the bulk of the increase, the report said.
On the other hand, TV ratings continued to decline with online viewing expected to further erode the sector. Video consumption remained heavily skewed toward user generated content platforms with their share of video consumed ranging from 82% in Korea to 95% in Vietnam. While YouTube remains the leader, TikTok is driving the growth in Southeast Asia.
MPA VP Stephen Laslocky said: “Inflation, particularly with online originals, is clearly a factor driving-up content costs. Online video operators, broadcasters, and producers need to see that higher budgets translate into more premium viewing experiences; otherwise, the cost increases will not be sustainable. Internationally successful programs remain the content licensing Holy Grail which thus far, only Korean dramas and some anime, as well as U.S. and U.K. content, have sustainably achieved. Some Thai content has succeeded outside of Thailand. Quality production values, strong storylines with a focus on younger online demographics will be the building blocks of future investment strategies.
“The expanding online video sector has been a boon to independent producers. Profit margins have stabilized at 10% or more across much of the region. More can be done to bolster independent producers including additional compensation for original concepts, commensurate rewards for breakout successes and expanded use of pipeline deals (which allows producers to more reliably recoup overheads). In exchange, producers need to be transparent with production costs. Commissioners need to be willing and able to audit costs,” Laslocky added.
The report tracked video content consumption, content investment, and production costs in seven key Asian markets: India, Indonesia, South Korea, Malaysia, the Philippines, Thailand and Vietnam.