Page 38 - AIB | The Chanel | Issue 2 2012

38 | ISSUE 2 2012 | THE CHANNEL
China, India, Korea and SEA.
About a third of TV homes in Asia
had DTV as of end‐2011; this is
expected to surpass 70% by 2020,
driven largely by pay‐TV with
some DTT, according to MPA.
OTT IMPACT
All this optimism about TV is not to
say that the growth of broadband is
not having an impact. Fibre deploy‐
ment, which supports sufficient
speeds for quality online video,
grew 27% in 2011 to reach less than
70 million homes, still only 7%
household penetration, though this
is expected to double to 15% over
the next decade, implying a base of
more than 160 million homes. This
base will easily be able to receive
broadcast quality video content
online.
Much of the volume and market
today for over‐the‐top (OTT) services
and online video is in early deployers
such as Hong Kong, Japan, Korea
and China but going forward next
generation broadband systems will
proliferate in Australia, Singapore
and Taiwan, while there will also be
pockets of growth in parts of
Southeast Asia. This should be an
opportunity rather than a threat for
TV broadcasters and operators,
especially those who continue to
invest in network and content for
product innovation.
The multi‐screen approach,
embracing the four‐screen era (TV,
smartphone, tablet and PC), is key
for many integrated media and
telecom operators in Asia, wrestling
with the likes of Apple to integrate
HD content, cloud storage and
digital eco‐system services across
different screens.
Operators in Australia and Japan
have long led the way in HD and
DVR deployment, and are now
innovating with multi‐screen and
TV Everywhere type services. In
Hong Kong, Singapore, Taiwan and
Malaysia, operators have embraced
product innovation and multi‐
screen strategies, while over the
coming months packaging will be
simplified in these markets and the
user interface improved (especially
in Singapore and Hong Kong).
Operators in Singapore, Taiwan,
Korea, Australia and Malaysia have
also driven HD growth and
accelerated broadband speeds to
maximize the consumer experience
while in Korea, Australia and
Malaysia, KT SkyLife, Foxtel and
Astro have rolled out hybrid DTH‐
IP set top box services offering
consumers HD channels, VOD and
Internet functionality.
In China, traditional cable
operators have digitalised
infrastructure and are now
deploying VAS and HD services.
In Asia’s growth markets – India,
Indonesia and Southeast Asia – the
focus remains very much on single
products, as TV remains a vital
consumer media growth platform.
Nonetheless, DTH and cable
operators are investing in HD and
DVRs, though the focus is on
volumes and grabbing eyeballs. In
the future, DTH platforms may be
required to transition to a multi‐
play strategy as broadband
adoption picks up, though fibre
penetration will remain modest in
India and Indonesia in particular.
PAY-TV GROWTH
The key to the future of pay‐TV is
dependent on the next five years of
development in India and
Southeast Asia. Pay‐TV in India
and Indonesia is growing at a rapid
pace in particular, with competition
intensifying and structural
dynamics changing, while DTH
platforms are emerging as key
gatekeepers. Similar trends are
occurring, though arguably with
less intensity, in markets such as
Malaysia, Philippines, Thailand
and Vietnam.
Future growth in these markets
will depend on ground execution
and access to capital. India is set to
undergo a massive digitalization
process that will drive value across
the industry eco‐system, but it is a
process that will require strong
execution and high levels of
funding. Multiple new operators
are entering into Indonesia’s pay‐
TV market, while incumbents are
also consolidating and accessing
capital markets to fund future
growth. In Thailand and Malaysia,
new entrants could drive large‐
scale growth but there is a
significant risk on ground execution.
MPA projections indicate that
the pay‐TV market in Asia Pacific
added 35 million net new homes in
2011. Excluding the utility‐driven
China market, the region added 15
million new subscribers. Ex‐China,
India accounted for more than 60%
of the new growth in 2011, with
Southeast Asia contributing 15%, led
by Indonesia with 5%. North Asia
remains significant, contributing
17% to net adds in Asia ex‐China in
2011, driven by Korea at 11%
(fueled by DTH and IPTV).
MPA analysis also indicates that
global pay‐TV penetration will grow
from 58% to 72% between 2011 and
2016, driven in particular by the
growth of key distribution platforms
in Asia Pacific. The latter will account
for 62% of global pay‐TV subscribers
by 2016 versus 57% in 2011, driven
by contributions from markets such
THE CHANNEL | FOCUS
In China
revenues
from HD
and VAS
will grow
rapidly
“
”
Asia Pacific TV Industry Revenue Trends (US$ bil.)
2011 2012 2013 2014 2015 2016 CAGR 2011-16
Total TV Sales 69.2 74.5 80.3 86.4 91.5 98.5 7.3%
Advertising 35.9 37.9 40.3 43.1 45.6 48.4 6.1%
Subscription 33.3 36.7 40.0 43.4 46.0 50.1 8.5%
Note: Includes free-to-air and pay-TV platforms with recognition of linear and non-linear services
Source: Media Partners Asia