Pay TV penetration in Asia Pacific will decline in the next five years thanks largely to an acceleration of cable cord cutting in China, according to research by Media Partners Asia (MPA).
However, it said that pay TV penetration will fall from 57% of TV homes in 2018 to 55% in 2023 when adjusted for multiple subscriptions.
Excluding China, the region’s pay TV base is tipped to grow from 267 million subscribers in 2018 to 288 million subs by 2023, representing a 2% CAGR, with adjusted pay TV penetration remaining flat at 57% of TV homes.
Focusing in on 2018, MPA expects the pay TV subscriber base to grow 3% year-on-year – although when you exclude China, customer net additions in Asia Pacific are tipped to “significantly slow” from 10.4 million in 2017 to 6.5 million in 2018.
India is expected to account for 47% of the growth in 2018, followed by Indonesia (12%), the Philippines (12%), Korea (10%), Pakistan (7%) and Sri Lanka (3%).
“Pay TV stakeholders are adjusting to new realities as the industry shifts to IP-based distribution,” said MPA executive director, Vivek Couto. “The growth of high-speed broadband and online video is driving fundamental changes in content consumption and investment across key markets. This, together with piracy, will continue to adversely impact pay TV industry growth.
“There will be more fixed broadband subs than pay TV subs across much of Asia Pacific by 2021, while the gap between the mobile broadband subs base and pay TV and fixed broadband subs will further widen as mobile networks emerge as a major means for mass content distribution, accelerating the shift in content consumption from households to individuals.”
In terms of revenue, the Asia Pacific pay TV industry is expected to continue to expand at a 3% CAGR between 2018-2023 to exceed US$66 billion in revenue by 2023. Pay TV revenue in the region – from both subscription fees and advertising sales – are forecast to top US$56 billion in 2018.
According to MPA, over the next five years the biggest gains will come from the Chinese market, where pay TV revenues are projected to grow at a 3% CAGR to reach US$25 billion by 2023, and the more accessible and commercial India market, where pay TV revenues are set for an 8% CAGR to reach US$16 billion by 2023. Korea is expected to grow at a 3% CAGR to reach US$7.4 billion in revenue by 2023.
Australia, Hong Kong, New Zealand, Malaysia, Singapore and Thailand are all expected to register pay TV revenue declines ranging between -1% and -6% CAGR over the 2018-23 forecast period.