Market Insight

IPTV driving growth in Asia-Pacific, where cable has a strong footprint

August 16, 2018


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Highlights

  • Pay TV homes in the Asia-Pacific region rose 5.7 percent to reach 76 percent of all homes in 2017. The number of pay TV homes will continue to rise steadily, from 632 million homes in 2017 to 743 million by the end of 2022.
     
  • The majority of pay TV homes in Asia-Pacific subscribe to cable TV, which accounted for 62 percent of total pay TV subscribers in 2017. IPTV increased its market share from 18 percent in 2016 to 23 percent in 2017. Satellite subscriptions remained steady, with 15 percent of pay TV subscribers.
     
  • Use of online video services is growing, and mobile devices will account for a growing amount of video viewing in this region. Online video revenues – including advertising-supported services, subscription services and transactional rentals and purchases –  increased by 50 percent year over year, reaching $16.2 billion in 2017.
     
  • Subscriptions to online video services rose from 132 million in 2016 to more than 200 million in 2017. Nearly three quarters (71 percent) of these subscriptions came from China, followed by Japan with 10 percent.

Our analysis

Despite growth in the number of pay TV homes in the Asia-Pacific region, challenging economic conditions, an increase in competition and rampant piracy continue to pressure the ability of pay TV operators to attract and retain subscribers. Cable is overwhelmingly the dominant pay TV platform in this region, due to the vast number of subscribers in China and India. Despite cable’s dominance, Internet Protocol TV (IPTV) is the core driver for growth and new customer additions.

The online subscription business model is growing fast in this region, while advertising-supported and transactional online video services also play significant roles -- although with varying degrees of importance, on a country-by-country level. Advertising-supported online video comprises the largest share of this market in China, India and across Southeast Asia, while digital retail sales and digital rentals tend to be higher in more developed markets, like Australia, New Zealand, Hong Kong, Japan and South Korea, than in China, India and other emerging transactional online video markets.

Even with all these shifts in the Asia-Pacific market, the rise of online video does not spell the end of pay TV, according to IHS Markit. That's because IPTV, and to a lesser extent growth in satellite and digital terrestrial television (DTT), will offset the decline in the number of homes subscribing to cable TV.

Meanwhile, the surge in online video usage will continue unabated, with online net subscriber additions forecast to outstrip those of pay TV between 2017 and 2022. Competition in the Asia-Pacific online video market will continue to intensify, as Netflix and regional competitors Hooq, Iflix and Viu make similar bids for subscribers.

Furthermore, broadcasters, mobile operators, production houses and studios are also increasingly moving into online video. To capture subscribers as competition intensifies, online video providers are expected to target kids, live-events streaming, sports and other specialized market segments.

Asia Pacific Pay TV and Online Video 2017

This annual report analyzes the 2017 results of major pay TV operators and online video providers in the Asia-Pacific region, including subscriptions, TV household penetration, quarterly net additions and key financials. In addition, several country profiles analyze the position of pay TV operators and online video providers against key competitors.

Research by Market
Media & Advertising
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