The show goes on: Streaming drives growth of video industry in APAC

According to the research, last-mile access through broadband, cable or DTH remains a high-margin business

YouTube, TikTok, and Meta will lead the user-generated content market. Streaming video platforms should turn profitable in the next 1-2 years. Last-mile access through broadband, cable or DTH remains a high margin business.

These were some of the highlights of the research presented by Vivek Couto, co-founder and executive director, Media Partners Asia (MPA) at APOS 2022 in Singapore last month. MPA’s signature event looks at everything to do with video and audio in the Asia Pacific region.

The other points highlighted in the presentation were that free-to-air television was in decline, as a result, TV-based content creators will see value erosion while those that depend on premium video-on-demand will see better economics. 

Local content drives growth in users and subscribers in Japan, Korea and India, while international content drives it in Indonesia, Thailand, Singapore, and large swathes of Southeast Asia.

The entire business in Asia Pacific countries is expected to go from $142 billion this year to $169 billion by 2027. At 8.2 per cent compounded annual growth rate between 2022-27, online video will continue to drive this growth. Free-to-air will decline by 2 per cent while pay TV will grow 2.1 per cent. These top line trends determine most of the conclusions MPA has drawn.

At an overall level, pay OTT continues to eat into pay TV. Pure-play pay TV operators have held onto margins even as revenues begin declining in markets such as Japan, Australia, Indonesia, and Thailand where subscription driven video-on-demand has overtaken pay TV. It still lags behind in India, Korea, and the Philippines where pay TV remains strong.

In India, major operators — Disney Star, Sony Zee, Viacom18 and Sun18 — have their own large OTT brands. They are, therefore, on the way to capturing the future value that this business could generate. The report states that across the region, TV broadcasters with a streaming offering are expanding revenues and managing to keep revenue stable.

On the telecom/broadband side, the two big players — Airtel and Jio — offer media services. However, across the Asia Pacific, the potential for aggregation is yet to be unlocked.

In India, there are attempts by firms that own physical infrastructure (Jio, Airtel, Tata Play) to aggregate a variety of offerings. However, the scale these have achieved compared to their overall user bases is very small.

YouTube, TikTok, Meta, Disney+Hotstar, Netflix, and Amazon Prime Video capture nearly half of the Asia Pacific online video market. The social brands have a stronghold over advertising while the others have a grip on pay revenues.