Online video revenue across 14 markets in Asia Pacific is expected to reach US$35 billion by 2021 – an average annual growth of 22% from 2016, according to a new report published this week by Media Partners Asia (MPA).
The report, Asia Pacific Online Video Distribution, says China will remain the largest contributing market, accounting for 76% of the total Asia Pacific online video pie by 2021, driven by a flourishing digital ecosystem in which video is increasingly important. China has about 25 OTT platforms; six or seven dominate and are investing heavily in content creation.
Released ahead of MPA’s annual Asia Pacific Video Operators Summit (APOS) in Bali (26-28 April 2016), the report tracks and projects consumption and revenue generation across advertising and subscription-based online video platforms in 14 Asia Pacific markets. The report also covers the growth of mobile and fixed broadband networks.
The new study says the contribution from Japan, Australia, Korea and India will be significant over the next five years, accounting for an aggregate 17% of revenue by 2021.
“The growth of broadband, combined with slow but progressive change in content licensing, is helping drive demand for online video services,” says MPA executive director Vivek Couto.
“The distribution of driver local content online remains modest however, especially outside of China, India and Korea,” he adds. In Japan, Nippon Television-owned Hulu Japan has done well on the back of local content, and this will continue to grow. “The opportunities in Japan are significant,” Couto says.
In Southeast Asia, broadband penetration is growing rapidly but from a low base in most markets.
“In these markets, telecom operators are investing in next-generation broadband networks and integrating with subscription-based online video platforms, on a wholesale basis or as part of promotional partnerships,” Couto says.
He adds that this “allows online video operators to utilise carrier billing, thereby overcoming market limitations in payment infrastructure. It’s a bet to drive consumption in the short...
Online video revenue across 14 markets in Asia Pacific is expected to reach US$35 billion by 2021 – an average annual growth of 22% from 2016, according to a new report published this week by Media Partners Asia (MPA).
The report, Asia Pacific Online Video Distribution, says China will remain the largest contributing market, accounting for 76% of the total Asia Pacific online video pie by 2021, driven by a flourishing digital ecosystem in which video is increasingly important. China has about 25 OTT platforms; six or seven dominate and are investing heavily in content creation.
Released ahead of MPA’s annual Asia Pacific Video Operators Summit (APOS) in Bali (26-28 April 2016), the report tracks and projects consumption and revenue generation across advertising and subscription-based online video platforms in 14 Asia Pacific markets. The report also covers the growth of mobile and fixed broadband networks.
The new study says the contribution from Japan, Australia, Korea and India will be significant over the next five years, accounting for an aggregate 17% of revenue by 2021.
“The growth of broadband, combined with slow but progressive change in content licensing, is helping drive demand for online video services,” says MPA executive director Vivek Couto.
“The distribution of driver local content online remains modest however, especially outside of China, India and Korea,” he adds. In Japan, Nippon Television-owned Hulu Japan has done well on the back of local content, and this will continue to grow. “The opportunities in Japan are significant,” Couto says.
In Southeast Asia, broadband penetration is growing rapidly but from a low base in most markets.
“In these markets, telecom operators are investing in next-generation broadband networks and integrating with subscription-based online video platforms, on a wholesale basis or as part of promotional partnerships,” Couto says.
He adds that this “allows online video operators to utilise carrier billing, thereby overcoming market limitations in payment infrastructure. It’s a bet to drive consumption in the short term and ARPUs long term”.
The report shows that mobile consumption of clips and short-form video continues to climb across Asia Pacific.
“This is informing the creation of new local content in China, India and Korea, and will drive demand for other genres, including sports, factual and lifestyle,” MPA says.
Couto and analyst Aravind Venugopal, say Korea’s CJ E&M is one of the region’s short-form leaders, driving a “fundamental shift” that will continue.
These new slates of local short-form are “a key catalyst for the large advertising opportunity for online video, which will grow further as video’s share of digital advertising expands,” Couto says.
“This will not only benefit global platforms with local reach but also local players with IP ownership in China, India, Korea and parts of Southeast Asia,” the report says.
At the same time, linear streaming opportunities on OTT remain strong for now, Venugopal says.
MPA says online video advertising accounted for less than 15% of Asia Pacific digital ad spend in 2015. This share will grow to 22% by 2021.
Total online video ad sales will reach approximately US$22 billion by 2021 versus US$9 billion in 2016, a 19% CAGR.
China will represent more than 70% of the pie by 2021, with Japan, Australia and India leading the other markets.
In the online subscription video on demand (SVOD) segment, MPA expects total paying customers to grow from 177 million by 2016 to 360 million by 2021, with China contributing the majority.
Japan, Korea and Australia will lead a second group of markets.
Total SVOD revenue will reach US$13 billion by 2021, a 28% CAGR from US$3.7 billion in 2016.
China will again contribute the majority, representing more than 80% by 2021, with Japan, Australia, Korea and Hong Kong leading the next tier of markets.
The Southeast Asia SVOD opportunity will grow rapidly but from a low base, representing about US$200 million in revenue by 2021. This excludes wholesale revenues that telcos are paying SVOD providers to hard-bundle their platforms with broadband/multi-service offerings.
Retail subscription dollars will take longer to eventuate in emerging Southeast Asian economies and India.
“SVOD in these markets requires greater education, marketing, scale (as pricing power will always remain modest) and consolidation, as more local and vernacular content comes online, along with premium Asian content with cross-border appeal (i.e. Chinese, Indian, Korean) as well as Hollywood and international content that’s already being exploited,” the report says.
Asia-Pacific fixed broadband subs will reach 345 million in 2016 and grow to 425 million by 2021.
The report says this means that average broadband household penetration will grow from 35% in 2016 to 41% in 2021, with the most significant growth coming through fibre network upgrades and the rollout of next-generation broadband cable.
Mobile broadband will reach 79% of the Asia Pacific population by 2021 versus 46% in 2016, with smartphones and 4G deployment defining the future. Big beneficiaries include China, India, Indonesia, the Philippines, Thailand and Vietnam.
In his presentation on Thursday (28 April), Venugopal will also talk about the role of social media in the video environment.
Published on ContentAsia's eNewsletter, 18 April 2016