The recent analysis released by Media Partners Asia (MPA) indicates that total Asia Pacific online video industry revenue will grow by 16% year-on-year in 2022 to reach US$49.2 billion. SVOD will contribute 50%; UGC AVOD, 37% and Premium AVOD, 13%. The industry will grow at an 8% CAGR to reach US$72.7 billion in 2027, with SVOD: AVOD ratios remaining stable. Ex-China, the APAC online video industry will grow 24% in 2022 to reach US$25.6 billion in revenue, with SVOD contributing 47%; UGC AVOD, 43%; and Premium AVOD, 10%. Ex-China APAC online video revenues are forecast to grow at a CAGR of 11% to US$42.8 billion by 2027, with SVOD at 44%, UGC AVOD at 43%, and Premium AVOD at 13%.
China, APAC’s largest market, will generate US$11.2 billion in revenue in 2022, representing 48% of the APAC online video revenue pie. Two long-form platforms, Tencent Video and iQIYI, and two short-form video players, ByteDance and Kuaishou lead, will capture ~70% of China’s online video revenue in 2022. Despite regulatory hurdles and market maturity, China will remain APAC’s largest online video market, growing at a CAGR of 5% over 2022-27 to top US$30 billion or 42% of the APAC online video revenue by 2027. China’s online video market is insular and mainly closed to international streamers.
Australia is a high revenue generating online video market. SVOD has reached maturity, with household penetration at 85% in 2022, higher than even in the USA globally. Japan and Korea house high-ARPU and relatively high-CPM audiences, with significant growth potential as SVOD penetration of households is not yet saturated at 49% and 42%, respectively. Content from Japan and Korea has proven global travel ability, allowing local content investment to be monetized internationally by multi-market players. Ex-China, Japan is APAC’s largest OTT revenue market, generating US$9.7 billion in 2022 and forecast to grow to US$14.7 billion by 2027.
India’s streaming OTT video market is in its second growth phase, with total revenues of US$3 billion in 2022 expected to double to almost US$7 billion by 2027. Competitive intensity grows between global giants and newly capitalized local players. Telcos' reach remains critical in the market along with AVOD business models and low-ARPU, high-volume SVOD services. Five leading platforms, YouTube, Meta, Disney+ Hotstar, Amazon Prime Video, and Netflix, will account for 82% of total online video revenues in 2022.
Indonesia is Southeast Asia’s largest online video market, generating close to US$1 billion in revenue in 2022, with advertising contributing 62% and subscriptions 38%. The premium video sector (SVOD and premium inventory) has emerged as a material revenue generator. Five significant players, Netflix, Vidio, Disney+ Hotstar, MNC Digital, and Viu, will account for 75% of premium video revenue in 2022. Amazon Prime Video will expand its Indonesia SVOD service after August 2022. Thailand’s online video industry is forecast to generate US$809 million. In revenue in 2022. Thailand’s accessible and sizeable content creation ecosystem has historically had more strong production values than other Southeast Asian markets, positioning the market for a potentially transformational period as streamers such as Netflix, Disney+ Hotstar, WeTV, Viu, and others scale local content investment.
“Investors increasingly focus on enhanced scale, improved monetization, and real profitability across global, local and regional online video platforms. In this context, the role of Asia Pacific continues to have a critical role in the future of the global online video industry. The region remains the largest growth contributor to global online video customers and users today and is emerging as a significant contributor to revenue growth. With the US and Europe fast maturing and China inaccessible, APAC’s large markets, India, Indonesia, Japan, Korea, and Thailand, will be increasingly important to global platforms. Each of these markets requires local content and distribution strategies with long-term investment," Vivek Couto, MPA Executive Director, stated.
"Key themes are emerging. First, the availability of high-quality local content online with travel ability is growing, led by Korea, Japan, China, India, Thailand, and Taiwan. Also, premium sports rights (i.e., football, cricket) are transitioning online in markets such as Australia, India, Indonesia, Korea, Singapore, and Thailand. Growth at any cost models is fast transitioning towards more rational models anchored to monetizable reach through telcos and organic, direct customer funnels. The inflationary content costs remain a challenge, especially in India, Japan, Korea, and Thailand. A more strategic and partnership-driven model may help alleviate production ecosystem pressure. Online piracy levels are also alarmingly high in India and Southeast Asia markets. Growing incomes and a rising middle class have helped drive affordability in emerging markets. Still, monetizable demand for online video services remains largely confined to large urban markets with huge untapped demand in micro ARPU rural and second / third-tier regions. This will likely change in India and Indonesia in the future,” Couto added.
TAM & PARTNERSHIPS
The total addressable market (TAM) for high-speed broadband continues to expand rapidly in Asia with more significant 4G, 5G, and fiber-enabled connectivity. Ex-China, combined 4G and 5G users will reach 78% of the population across APAC in 2022, while fiber-driven fixed broadband penetration will get 31%. Telcos, connected TV (CTV) operators, and pay-TV operators remain important aggregators of SVOD, freemium, and AVOD services, contributing between 20-80% to OTT video platform reach, depending on the market. Rising CTV penetration and considerable screen consumption are helping fuel advertising growth across YouTube and premium AVOD platforms, led by BVOD players in particular while bolstering demand and monetization at SVOD platforms.
According to MPA analysis, 20 online video platforms will account for 67% of APAC's online video revenue. YouTube leads with an estimated 42% share of the APAC ex-China AVOD pie in 2022. Meta Video is also sizable. YouTube and Meta are being challenged by China’s ByteDance, which owns and operates TikTok in international markets. TikTok’s consumption continues to soar in Southeast Asia with its short videos, and monetization is building. YouTube still dominates in Japan and Korea. In the global SVOD category in APAC, Netflix, Disney, and Amazon lead.
According to MPA, the three players will have a 56% share of the APAC ex-China SVOD pie in 2022, with Netflix at 33%, Amazon Prime Video at 12%, and Disney+ (including Disney+ Hotstar) at 11%. Netflix established an early lead given its launch and expansion in APAC after 2015-16 and success with premium Korean and Japanese content in particular. Its share of revenues has declined, however, from 35% in 2021. Disney+ and Disney+ Hotstar services build scale, local content investment, and monetization in markets such as Australia, India, Indonesia, and Thailand while also expanding in high ARPU and strong regional markets such as Japan.
However, a third of revenues come from India, where it has recently lost digital rights to the highly successful IPL cricket franchise to Viacom18. Prime Video leads the Japan SVOD category while also increasing in India and is now set to expand in key Southeast Asia markets in Q4 2022. Successful platforms are emerging in the local and regional categories of Australia, Indonesia, Japan, and Korea. Indonesia’s Vidio, owned by Emtek’s SCMA Group, is leveraging content production synergies and a library of popular local entertainment content and sports rights to drive a potentially large-scale SVOD business. Australia’s Stan is on a similar SVOD trajectory but faces greater competition from global giants and is more reliant on licensed and acquired content.
In Korea, Tving from CJ ENM and Wavve from SK Telecom and Korea’s major FTA networks have also reached a level of SVOD scale, but consolidation in the market is likely. The merger is expected in Japan, where Hulu Japan and UNext have emerged as crucial local SVOD platforms. BVOD, led by 9Now and 7Plus in Australia, is a vital category helping to drive premium video advertising growth while enabling TV broadcasters to expand online with a potentially high-margin business. The same applies to TVer in Japan, owned by Japan’s five largest TV networks. Indonesia and Thailand have significant BVOD potential.
Viu is a significant proxy for premium advertising growth in Southeast Asia and a freemium business model. Ad-supported SVOD models will launch across the Asia Pacific in 2023-24, led by Netflix and Disney+. New local players with deep pockets in India are gearing up to grab market share, led by a newly recapitalized Viacom18, backed by strategics Reliance, Bodhi Tree and Paramount, while domestic incumbents Zee and Sony are merging to create a strong TV / online video business. In the future, Viacom18’s new streaming platform, leveraging IPL cricket and local entertainment, will emerge as an essential player in the AVOD space, particularly grabbing material share over time as it leverages massive reach via Jio mobile and connected TV.