Inside Satellite TV
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Asian brands and networks that focus on India as part of a region-wide strategy will continue to do well, but Korea and Japan will become increasingly important, a new report says. As part of Media Partners Asia‘s Asia Pacific Pay-TV & Broadband Markets 2008, the consultancy examined prospects for the region s large broadcasters. It found there were significant local growth opportunities in Japan and Korea, the report says. The authors continue: Going forward, more pay-TV broadcasters from Korea, Japan and ASEAN are likely to emerge as leading revenue-generators.
Originators of Indian and Chinese content will continue to capitalize on the growth of consumer media industries in both India and Greater China, as well as the demand for Indian and Chinese-language programming in Asia and the rest of the world.
In 2007, pay-TV channels and content providers in Asia generated US$10.6 billion in advertising and subscription revenues, forecast to double to US$20 billion by 2011 and US$28 billion by 2017. Revenue growth will be driven both by growing penetration of pay-TV as well as wider economic expansion.
However, there are challenges, with the economics of channel distribution remaining difficult outside of traditionally structured pay-TV markets such as Japan and Australia. The economics of channel distribution remain very different outside of Japan and Australia, as subscription fees are challenging due to relatively low pay-TV ARPUs and limited penetration of digital pay-TV, says MPA. Revenue composition is unlikely to significantly change in the near term because of the strong pace of ad growth and less than optimal sub fees.
But the report adds that over the long term, digital deployments in India, North Asia and ASEAN (South-East Asia) countries will give revenues a big boost, with channel fees forecast to climb at a CAGR of 14% to reach US$11.4 billion by 2007 against a relatively low US$4.5 billion in 2007.
Star Group is the leading pay-TV broadcaster in the region by revenues, with turnover forecast at US$801 million for its current financial year (to the end of June). Ranked next is Japan s Wowow, which operates only within Japan, with revenues of US$551 million for the year to the end of March. Next is Zee, which operates services across the globe and not just regionally and in its home market of India. Its revenues are forecast at US$445 million.
Fourth amongst the regional broadcasters is the only US operator in the top five Time Warner. Its Asian channels had revenues of US$401 million for 2007. And rounding out the top five is Korea s On Media, with 2007 revenues of US$340 million.
Specific positives for the future include the Indian ad market, which is growing at over 20% a year, combined with new digital distribution platforms emerging; China s growing critical mass of digital subs raising a sliver of opportunity for pay-TV broadcasters; the proliferation of digital pay-TV in Korea and Japan; and Indonesian broadcast groups starting to realize gains, both from terrestrial TV ads and pay-TV distribution.
But risks, especially in the content space, remain. Intensifying competition in India means greater costs and regulation; China also has regulatory barriers and slow growth of actual pay-TV; while there are also soft macro conditions and regulatory constraints in Taiwan. Finally, the growing pay-TV sector across the region has its ad revenues already under threat from the online and digital sectors.