Mumbai: Media Partners Asia (MPA) has released a report titled "Asia Pacific Pay-TV Distribution 2022," which predicts that, excluding China, Asia-Pacific (APAC) Pay-TV revenues will reach $35 billion by 2027.
According to the report, total Asia Pacific Pay-TV industry revenues, including subscriptions and advertising, will grow by an estimated 3.5 per cent in 2022 and will grow at a 2.1 per cent CAGR over the next five years.
Pay-TV subscriber growth in Asia Pacific (excluding China) will be relatively flat in 2022, with an estimated 1,06,000 subscribers cutting the cord.
The report, "Asia Pacific Pay-TV Distribution 2022," examines the economics of the pay-TV and fixed broadband industries in 17 APAC markets, including subscribers, consumer and advertising spending, content investments, and future growth in the cable, DTH, and IPTV sectors.
Excluding China, the Asia-Pacific Pay-TV revenue pie is expected to grow 1.4 per cent in 2022 and 1.7 per cent between 2022 and 2027. India, Korea, the Philippines, and Vietnam will account for the majority of revenue growth in 2022. Between 2022 and 2027, India and Korea will continue to contribute the most to incremental revenue growth.
India, Korea, and Japan will continue to be the largest revenue-generating markets in Asia Pacific, excluding China, with a combined 74 per cent share in 2022, rising to 78 per cent by 2027. Australia, Malaysia, and the Philippines will continue to be important, contributing seven per cent by 2027, though both will experience cord cutting and face significant structural challenges.
Total Asia Pacific (ex-China) Pay-TV subscribers will increase from 232.9 million in 2022 to 234.7 million by 2027, with TV home penetration reaching 48 per cent in 2027, up from 50 per cent in 2022.
According to MPA analysis, cord cutting peaked between 2019 and 2021, with an aggregate 9.1 million subscription cancellations, 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 expects 1.0 million net new submarines to be added in total between 2022 and 2027, driven by India and parts of South and Southeast Asia but offset in part by contraction in all other regions. Over the 2022–27 period, India and the Philippines will lead in terms of net new subscriber growth.
India will continue to be the largest market, accounting for 52 per cent of total subs by 2027, with DTH satellite platforms driving the majority of growth as overall penetration remains flat.
Korea is the second-largest contributor, accounting for 16 per cent of subs by 2027, thanks to telco IPTV operators. Pakistan and Vietnam will each have six per cent of total pay-TV subscribers by the end of 2027, while Japan's high ARPU but declining subscriber base will contribute five per cent by then.
Commenting on the report’s findings, MPA executive director Vivek Couto said, "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 rationalised in many markets across Southeast Asia as well as India, Hong Kong, Japan, and Taiwan."
China is still the largest pay-TV market in Asia Pacific, but it is inaccessible to international investors and content providers. The high-volume, low-ARPU pay-TV market continues to expand, with total pay-TV subscribers expected to reach 578 million by 2022, representing 90 per cent penetration of TV households after accounting for multiple subscriptions. After surpassing cable TV as the largest pay-TV segment in 2019, IPTV continues to grow in terms of subscribers and revenue, owing to popular telco fibre broadband bundles and superior content offerings (particularly premium on-demand) over cable TV. MPA forecasts 41 million new IPTV subscriptions in China between 2022 and 2027, bringing the total base to 419 million by 2027, with IPTV accounting for 76 per cent of the total fixed broadband base.
Telcos & IPTV Rule Ex-India
The Asia Pacific IPTV market is expected to grow by eight per cent year on year in 2022, reaching 416.5 million subscribers, accounting for more than 60 per cent of total telco fixed broadband subscribers. China continues to drive much of the growth, followed by Korea, Indonesia, Thailand, Vietnam, and Malaysia. Telco fibre broadband deployments continue to grow as high-speed connectivity becomes more common in homes. The importance of video remains, with IPTV and VOD services critical to bolstering the broadband bundle.
According to MPA projections, total Asia-Pacific IPTV subscribers will reach 464 million by 2027. Total Asia Pacific IPTV subscription fees will rise from $20.5 billion in 2022 to $24.7 billion by 2027, representing a four per cent CAGR, driven primarily by China and Korea with incremental growth in Southeast Asia.
Meanwhile, demand for low-ARPU TV channel bundles, HD services, and hybrid DTH/internet video services drives growth in the DTH satellite pay-TV industry. With an estimated 56 million DTH subscribers in 2022, India continues to be the largest DTH market, accounting for 73 per cent of total Asia Pacific DTH pay-TV subscribers. DTH will continue to be the primary driver of growth in India's pay-TV market, capturing the majority of new TV households entering the pay-TV ecosystem.
The Philippines' DTH market is expanding, reflecting demand for low-ARPU platforms with national reach (such as Cignal and GSat) that aggregate local and international TV channels. The DTH pay-TV market in other markets (such as Indonesia and Thailand) has been severely impacted and downgraded.
In mature markets with SVOD and broadband competition, DTH operators continue to harvest high-ARPU subscribers with HD services and next-generation STBs with VOD and broadband connectivity. Foxtel in Australia, Sky TV in New Zealand, and Astro in Malaysia are a few examples.
According to MPA forecasts, Asia Pacific DTH industry subscription revenue will grow at a CAGR of one per cent to reach $6.3 billion by 2027. India will remain the region's leader, followed by Japan, Malaysia, and Australia. By 2027, the Philippines will be ranked fifth.