Market Insight

ABUdigital 2019 review: Asian broadcasters look to digital to counter falling ad revenues

July 09, 2019

Kia Ling Teoh Kia Ling Teoh Senior Research Analyst – Advertising & Television Media, IHS Markit

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The Asia-Pacific Broadcasting Union (ABU) last week held ABUdigital, a forum set up to concentrate minds on how its members should respond to declining TV advertising revenues and emerging online opportunities. IHS Markit analysts attended the inaugural ABUdigital in Kuala Lumpur, Malaysia on 3-4 July. 
    
The ABU has 272 members in 76 countries on four continents. The union runs a range of services, including the Asiavision daily TV news exchange, co-productions, programme exchanges, conferences and consultancies. It also negotiates rights for major sports events and organises coverage in the region.

Our analysis

For most broadcasters in the region, TV advertising revenue is their bread and butter. While advertising has developed in video on-demand, regional players are working hard to support necessary content expenses with digital advertising income still low. In the forum, digital innovations such as use of data, virtual reality and IP monetisation across multiple platforms were discussed.     

In the battle against the likes of Netflix and Amazon Prime Video, broadcasters were finding it hard to convince the audience that they are more than a catch-up video service and that the content they offer is of premium quality. This was highlighted in a presentation by TVNZ, which offers advertising video on-demand service, TVNZ On-Demand. Even though New Zealand's online advertising revenues grew 4% in 2018, TVNZ pointed out the threat posed by YouTube, which offers a lower and more attractive CPM. To counter this, the ability of TVNZ to find its own strategic proposition is key, such as positioning itself as a premium ad inventory owner that targets global advertisers. According to IHS Markit, New Zealand’s TV advertising revenues dropped 9% in 2018 and we expect the decline to continue in the next five years. 

In Malaysia, Media Prima attempted to launch a subscription video on-demand service in 2016 but converted it to an advertising model in 2018. We believe that the increased prices commanded by premium content and the unwillingness of users to pay encouraged the commercial free-to-air broadcaster to return to grow its digital advertising revenues. However, unlike pay TV operators, commercial broadcasters own little user data which they can leverage for ad targeting; hence, the data scarcity issue must be addressed.

NHK, one of the largest programming investors in the world, highlighted the risk of its ageing audience (the majority are above the age of 60) and the need to partner with digital platforms to engage with a younger audience. The company shared its experiences of collaborating with Twitter and Yahoo Japan to create and distribute content targeting different demographics.

Media Prima presented Ejen Ali and Mak Cun, programmes that have been successfully exploited across multiple platforms, including linear TV, online video and games. Like Media Prima, we expect other broadcasters to attempt to gain more revenue from their programming and IP.

Organization
BBC Google Inc. NHK YouTube
Research by Market
Media & Advertising
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