Pay-TV and broadband set to boom in Asia

26 April 2007

Hong Kong- Millions of Asians will be transformed into voracious consumers of pay-TV, digital TV and broadband over the next five to eight years, according to a new study of the region's booming media and entertainment industries.
The combined annual revenues of pay-TV and broadband businesses in Asia are predicted to jump from US$44 billion to US$102 billion by 2015. Total pay-TV subscribers, which reached 255 million last year, will climb to 381 million by 2011 and 446 million by 2015, according to Media Partners Asia, which surveyed 16 territories in the region. That means pay-TV penetration would grow from just under 40% of TV homes in 2006 to more than 50% by 2011 and almost 55% by 2015. Digital pay TV subs are projected to rocket from 27.6 million to 146.5 million in 2011 and 219 million by 2015. By then, almost 50% of pay-TV households will have a digital STB, versus just 11% in 2006.
And mergers and acquisitions in the pay-TV and broadcasting sectors, which were worth a record $8.7 billion last year, will continue apace, driven by activity in Greater China, India and Korea. "In 2006, Asia's pay-TV and broadband industries generated turnover in excess of US$44 billion, which represented 0.4% of real GDP," said MPA Director of Content & Research Vivek Couto. "This has the potential to grow exponentially. Multi-play video and broadband competition will accelerate. Distribution pipes will multiply. The demand for content will increase. Economic growth will fuel consumer and brand spend on pay-TV along with broadband communications and various interactive services."
MPA projections show that total broadband subs in Asia could grow from 108 million to 216 million by 2011 and 287 million by 2015. This implies broadband household penetration, which averaged 13% in 2006, could hit 24% by 2012 and 31% by 2015. Penetration levels in Korea, Singapore, Japan, Taiwan, Hong Kong and Australia will peak at 80-90%, on average, while penetration in China will approach 40% by 2015. Malaysia will lead the ASEAN region with almost 50% broadband household penetration by 2015, while levels in India will remain modest at 11% by 2015.
In 2006, the revenue opportunity for pay-TV channels in Asia was estimated at $9.2 billion, which MPA says could spurt to $18 billion by 2011 and top $24 billion by 2015. MPA expects advertising to grow at a CAGR of 10% over the next decade to peak at $12.6 billion by 2015, while channel subscription could climb at a CAGR of 13% to reach $11.5 billion. Its projections indicate total channel revenue in Asia, excluding Japan and Australia, will leap from $6.5 billion to $14 billion by 2011 and approach $20 billion by 2015. Last year, advertising contributed 74%, on average, to the channel revenue stream in Asia, excluding Japan and Australia. This is expected to decline to 60% by 2015 as subscription climbs to 40%.