Booming video market in Asia to be key battle for global groups
HONG KONG: As Disney completes its acquisition of Fox and scales up entertainment and sports offerings in Australia, India, Japan and South East Asia, the Asia Pacific video industry is shaping up as a key battleground for global media firms.
The online video sector in Asia has already hit massive scale, with revenues this year of US$ 21 billion. These are forecast to grow at 18 per cent for the next five years.
Research from Media Partners Asia, contained in the study group’s Asia Pacific Online Video and Broadband Distribution report, shows the industry expanding to US$ 48 billion by 2023. That includes subscription income as well as advertising revenue, in a diverse region where the levels of infrastructure and economic development and consumer behaviour patterns vary massively.
“Different payment models are emerging across China, India and Southeast Asia incorporating, including TVOD and shorter time commitments, freemium tiers, bundles and loyalty programs tied to a broader mix of digital services,” said the report’s author Vivek Couto, Media Partners Asia’s executive director.
China, where generalist and specialist video players already operate side by side, but where the global giants of video are largely excluded, is expected to account for 60 per cent of the Asia-Pacific revenue, including 66 per cent of regional subscription revenue. Japan, Australia, India, South Korea and Taiwan are the next largest.
Outside China, subscription revenue is forecast to grow from US$ 3 billion to US$ 6 billion by 2023. Online advertising spend, ex- China, is expected to swell from US$ 5 billion to US$ 11 billion.
Content costs, which have recently seen government intervention in China, will continue to grow.
Media Partners Asia forecast that these will grow at 14 per cent per year from US$ 16.6 billion this year to US$ 31.5 billion in 2023, across the entire region.
Excluding China, the investment in content, rises from US$ 2.7 billion to US$ 5.9 billion.
“We are in the early innings of an industry evolution which will require high levels of investment and strong balance sheets.
“For stand-alone players, there is no clear path to significant free cash generation in any market over the medium term, while integrated digital giants and large- scale TV players are subsidising losses for their online video services, although operational break- even is likely in the near-to-medium term for local platforms in Australia, China, India and Japan,” was how the report summarised the situation.