5 DEC 2022

APAC ex-China Pay-TV revenues to reach U$D 35 billion by 2027

India will remain the largest market in size ex-China, with growth powered by DTH satellite platforms; Korea is the second largest contributor, driven by telco IPTV. Revenue growth in 2022 will be driven by India, Korea, and the Philippines.

5 DEC 2022

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A new report published today by Media Partners Asia (MPA) indicates that ex-China, Asia Pacific pay-TV subscriber growth will be relatively flat in 2022, with an estimated 106,000 subscribers cutting the cord. Cord-cutting peaked between 2019 and 2021 with an aggregate of 9.1 million subs canceling subscriptions, according to MPA analysis, driven by erosion in key markets such as Australia, Malaysia, and Thailand as well as the contraction of the cable universe in India. Going forward, MPA estimates 1.0 mil. net new subs being added in total over 2022-27, driven by India and parts of South and Southeast Asia but partially offset by contraction in all other regions. India and the Philippines will lead in terms of net new subscriber growth over the 2022-27 period.

The report, entitled "Asia Pacific Pay-TV Distribution 2022," focuses on the economics of pay-TV and fixed broadband industries in 17 APAC markets with analysis of subscribers, consumer & advertising spending, content investments, and future growth across Cable, DTH & IPTV sectors. Ex-China, total Asia Pacific pay-TV subscribers will grow from 232.9 mil. in 2022 to 234.7 mil. by 2027 with penetration of TV homes, adjusted for multiple subscriptions, reaching 48% versus 50% in 2022. India will remain the largest market in size, accounting for 52% of total subs by 2027, with most of its growth powered by DTH satellite platforms as overall penetration will remain flat. Korea is the second largest contributor, with 16% of subs by 2027, driven by telco IPTV operators. Pakistan and Vietnam follow, each with 6% of total pay-TV subs by the end of 2027, while Japan’s high ARPU but declining subs base will contribute 5% by 2027.

“Pay-TV’s future sustainability is anchored to bundled IPTV and home broadband services with telcos and pay-TV operators also integrating premium online SVOD services through the launch of Android platforms, hybrid STBs, and various new packages. Linear TV remains important, with local and Asian content, sports, and niche international channels driving viewership. However, the growth of legal and affordable online SVOD options, as well as the pervasiveness of piracy, means that the value of premium sports and entertainment is migrating rapidly away from pay TV to online. Operator consolidation grew between 2019 and 2021, and we expect more to occur in markets such as China, India, Indonesia, Japan, Korea, Malaysia, and Taiwan. Linear channel products are being rationalized in many markets across Southeast Asia as well as India, Hong Kong, Japan, and Taiwan,” MPA executive Director, Vivek Couto, said.

China remains the largest pay-TV market in the Asia Pacific but remains inaccessible to international investors and content providers. The high volume, low-ARPU pay-TV market continues to grow, with total pay-TV subscribers reaching 578 mil. in 2022, 90% penetration of TV households, after adjusting for multiple subscriptions. After overtaking cable TV as the largest pay-TV segment in 2019, IPTV continues to gain a share of subs and revenue, benefitting from popular telco fiber broadband bundles and superior content offerings (especially premium on-demand) over cable TV. MPA projects 41 million new IPTV subscriptions in China between 2022 and 2027, taking the total base up to 419 mil. by 2027, with 76% of the total fixed broadband base subscribing to IPTV.

Total Asia Pacific pay-TV industry revenues, including subscription and advertising, will grow by an estimated 3.5% in 2022 and are projected to grow at 2.1% CAGR over the next five years. Ex-China, the Asia Pacific pay-TV revenue pie is estimated to grow 1.4% in 2022 and at a CAGR of 1.7% between 2022 and 2027. Revenue growth in 2022 has largely been driven by India, Korea, the Philippines, and Vietnam. India and Korea will continue contributing the most to incremental revenue growth between 2022-27. India, Korea, and Japan will remain the largest revenue-generating markets in Asia Pacific ex-China, accounting for a combined 74% share in 2022, growing to 78% by 2027. Australia, Malaysia, and the Philippines will remain important, contributing 7% by 2027 though both Australia and Malaysia will see cord-cutting and face significant structural challenges.

The Asia Pacific IPTV market will grow by an estimated 8% Y/Y in Asia Pacific in 2022 to reach 416.5 million subs, representing more than 60% of total telco fixed broadband subs. Much of the growth remains driven by China, followed by Korea, Indonesia, Thailand, Vietnam, and Malaysia. Fibre broadband deployments by telcos continue to scale as high-speed connectivity becomes pervasive across households. The role of video remains important, with IPTV and VOD services critical to strengthening the broadband bundle. MPA projections indicate that total Asia Pacific IPTV subs will grow to 464 mil. by 2027. Total Asia Pacific IPTV subscription fees will grow from US$20.5 billion  in 2022 to US$24.7 billion by 2027, a CAGR of 4%, driven largely by China and Korea, as well as incremental growth in Southeast Asia.

Meanwhile, demand for low-ARPU packages of TV channels, HD services, and hybrid DTH/internet video services continues to drive growth for the DTH satellite pay-TV industry. India remains the largest DTH market with an estimated 56 mil. subs in 2022, accounting for 73% of total Asia Pacific DTH pay-TV subs. DTH will remain the key driver of growth in India’s pay-TV market, capturing most of the new TV households entering the pay-TV ecosystem. The Philippines DTH market continues to grow, reflecting demand for low-ARPU platforms (i.e., Cignal and GSat) with national reach, aggregating local and international TV channels. In other markets (i.e., Indonesia and Thailand), the DTH pay-TV market has been severely impacted and downgraded.

DTH operators in mature markets facing competition from SVOD and broadband continue to harvest high-ARPU subscribers with HD services and next-generation STBs with VOD and broadband connectivity. Examples include Foxtel in Australia, Sky TV in New Zealand, and Astro in Malaysia. MPA forecasts indicate that Asia Pacific DTH industry subscription revenue will expand at a CAGR of 1% to reach US$6.3 billion by 2027. India will continue to lead the region, followed by Japan, Malaysia, and Australia. The Philippines will be in fifth place by 2027.