NEW DELHI: Rapid changes in the competitive environment for video and broadband services, the development of new technologies and the emergence of new forms of content provision are starting to have an impact on the distribution of broadband multi-channel pay television in the Asia Pacific region, according to an international report.
Asia Pacific broadband pay TV industry revenues could grow from $18.6 billion in 2004 to $34.3 billion by 2010 and just under $45 billion by 2015, the Asia Pacific Cable & Satellite Markets 2005 (ACSM 2005) report, published by the Hong Kong-based Media Partners Asia (MPA), states.
Multi-channel TV subscriber homes grew by 7 per cent year-on-year to reach 192.4 million by Y/E 2004, signifying a 34 per cent penetration of TV households (TVHHs). MPA's analysis includes subscribers on cable, DTH satellite, IPTV and UHF platforms.
Commenting on the report's findings, MPA director of content and research Vivek Couto said, "Competition and demand, together with greater regulatory clarity and flexibility, will unlock greater value in the distribution of broadband services and multi-channel television programming in Asia."
Couto added, "The rising penetration of subscription-based TV services and growing viewership of cable and satellite TV channels will also increase the market for pay TV advertising. These dynamics support MPA forecasts."
However, the MPA report blames the governments around the region for failing to provide an adequate regulatory framework for convergence to happen, which may impact the ability of distributors to invest in new programming and technologies.
"Nonetheless, market demand for digital pay TV channels; high speed Internet access and IP-based telephony will substantially grow in the future, supported by both rising incomes and the pervasiveness of broadband infrastructure." Couto points out.
2004 INDUSTRY PERFORMANCE REVIEW
By penetration, the leading markets were:
1. Korea (85%)
2. Taiwan (84%)
3. India (55%)
By subscribers, the leading markets were:
1. China (105 mil.)
2. India (51.6 mil.)
3. Korea (14.6 mil.)
In terms of YoY growth, leading performers included:
1. Hong Kong (34%; IPTV, 135%; cable, 7%)
2. Malaysia (22%; solely comprised of DTH)
3. Korea (17%; DTH, 45%; cable, 14%)
Tiered service subscribers grew by 13% in 2004 to reach 10.4 mil. (5% of total multi-channel TV subs), while digital subs grew by 32% to reach 10.8 mil --- still only 2% of TVHHs in the region and 6% penetration of total multi-channel TV subscribers.
Digital satellite deployment remains robust, with DTH subs growing by 19% in 2004 to reach 8.4 million. In 2004, leading DTH markets included:
1. Japan (3.3 mil.)
2. Korea (1.6 mil.)
3. Malaysia (1.5 mil.)
4. Australia (0.89 mil.)
5. New Zealand (0.49 mil.)
Digital cable deployment was given a significant boost by expanded rollouts in Australia and Japan but the overall pace remains slow due to various commercial and regulatory issues in China, India, Korea and Taiwan. Total digital cable subscribers grew by 119% in 2004 to reach 1.9 million subscribers.
In 2004, leading digital cable subscriber markets included:
1. Hong Kong (700,000)
2. China (410,000)
3. Japan (320,000)
The proliferation of broadband ADSL infrastructure has meant that leading telecom providers have begun to utilise ADSL and Ethernet networks to deliver digital video services. The most notable exponents of such services have been two broadband IPTV providers in Hong Kong, which had acquired an aggregated 378,000 IPTV users as of Y/E 2004.
Similar deployments have begun in Taiwan and Japan, but have yet to match Hong Kong?'s success. Future IPTV deployments are expected in China, India, Korea, Malaysia and Thailand.
Cable modem subscribers still trail ADSL in the region, though growth was relatively robust at 16 per cent Y/Y in 2004 with total subscribers reaching 9.5 million Leading markets included:
1. Korea (4.3 mil.)
2. Japan (2.8 mil.)
3. China (0.94 mil.)
Cable telephony subscribers grew by 32 per cent in 2004 to reach 1.5 million. The cable telephony market largely consists of circuit-switched users in Japan (780,000) and Australia (500,000), but MPA expects cable VOIP telephony deployments to accelerate in the future, driven by rollouts
throughout the region, including Greater China, Japan, Korea and Singapore.
Total industry revenues grew by 14 per cent in 2004 to reach $18.6 billion. Leading revenue-generating markets included:
1. Japan (US$5.9 bil.)
2. China (US$3.5 bil.)
3. India (US$2.7 bil.)
In 2004, multi-channel TV services (subscription and advertising) contributed $15.5 billion (14% growth) in revenues; cable modem subscription $2.8 billion (12% growth) and cable telephony subscription US$214 million (18% growth).
Multi-channel TV subscription revenue grew by 14% in 2004 to reach $12.8 billion. Japan (US$4.2 bil.), China (US$2.5 bil.) and India (US$2.0 bil.)were sector leaders, followed by Taiwan (US$1.1 bil.), Korea (US$975 mil.) And Australia (US$795 mil.).
Net (local) cable & satellite TV advertising grew by 13% in 2004 to reach $2.7 billion. C&S TV advertising remains driven by increasing viewership and high penetration in major markets such as China ($907 mil.), India ($644 mil.) And Taiwan (US$492 mil.) And the growing attractiveness of leading
cable & satellite TV channels in terrestrial TV-dominated territories such as Korea, Australia, Hong Kong and Japan.
According to MPA estimates, the total revenue (including advertising and subscription) pie for cable & satellite TV channels and programme suppliers in Asia grew by 12 per cent in 2004 to $5.6 billion.
Excluding Japan and Australia, the revenue pie grew by 17% to reach $3.6 billion with advertising contributing 67% to the revenue stream and subscription representing 33%.
In 2004, the leading markets for pay TV channels and programme suppliers in Asia were Japan ($1.7 bil.); India ($902 mil.); China ($825 mil.) And Taiwan ($399 mil.). The remaining $1.5 billion was largely derived from Australia
and Korea with Malaysia and Hong Kong leading the South East region.
BAND MULTI-CHANNEL TV DISTRIBUTOR & CHANNEL PERFORMANCE REVIEW
In terms of revenue generation, the leading multi-channel TV related (distribution and content-focused) companies in FY 2004 were:
1. J-COM Broadband/Japan ($1,485 mil.)
2. Sky Perfect Communications/Japan ($720 mil.)
3. Foxtel/Australia ($581 mil.)
4. Jupiter Programming Co./Japan ($518 mil.)
5. Astro All Asia Networks/Malaysia ($455 mil.)
6. STAR Group/Regional ($408 mil.)
7. Zee Telefilms/India ($345 mil.)
8. Sky TV/New Zealand ($304 mil.)
9. i-CABLE Communications/Hong Kong ($298 mil.)
10. Austar United (US$297 mil.)
FUTURE PROJECTIONS
MPA forecasts indicate that total multi-channel pay TV subscriber homes could grow from 192.4 million in 2004 to over 258 million by 2010 and 291 million by 2015, implying that multi-channel TV penetration of total TV households will grow from 34 per cent in 2004 to 39 per cent by 2010 and 42 per cent by 2015.
Projections indicate that total digital pay TV subscribers will grow from 10.8 million in 2004 to 48.5 million by 2010 and 67.4 million by 2015. This means that digital penetration of multi-channel TV households could scale up to 23 per cent by 2015, with digital pay TV penetration of TV homes at 10 per cent.
The market for cable modem services could grow from 9.5 million subscribers in 2004 to 16.7 million subscribers by 2010 and almost 20 million subscribers by 2015.
Cable telephony subscribers could grow from 1.5 million in 2004 to just under 5 million by 2010 and over 7 million by 2015, driven by increased VOIP deployments across the region.
Digital drivers include the continued success of deployments in Australia and Japan, plus further momentum in cable digitisation in China, Korea, and Taiwan and, to a lesser extent, India.
The demand for digital DTH services will be substantially driven by the growth of two satellite pay TV platforms in India and a significant increase
In Indonesia as two incumbents reposition services. DTH growth in Korea, Malaysia, Japan, Australia, New Zealand and Thailand will remain robust, though MPA expects subscriber growth to decline in the long-term as the focus will be more on delivering premium subscriber growth with new channels and PVR-type services.
IPTV deployment over ADSL and Ethernet networks, should also drive consumer demand for digital services in India, Hong Kong, and Japan, and to a lesser extent, Taiwan and Korea.
The report's projections show that video services will remain the core revenue stream for the broadband pay TV industry. Total video revenues, including subscription and advertising, will grow from $15.5 billion in 2004 to just under $30 billion by 2010 and approaching $40 billion by 2015, contributing almost 90 per cent to total industry revenues over the long-term.
Average monthly consumer spend on cable Internet services will continue to decline amid more competition and greater commoditisation, though broadband service prices are expected to stabilise in the long-term. Total cable mode subscription revenues could grow from $2.8 billion in 2004 to $4 billion by 2010 and $4.6 billion by 2015.
Cable telephony subscription could grow from $214 million in 2004 to $485 million by 2010 and $659 million by 2015.
ACSM 2005 is a report spanning over 500 pages in its entirety with profiles of multiple pay TV and broadband industry sectors, geographical territories and cable, DTH and ADSL operators. It also combines comprehensive data and forecasts from 2000 to 2015, plus detailed listings of leading industry players.
