SINGAPORE: Media Partners Asia announced Monday that the Asia Pacific online video industry grew revenue by 14% Y/Y in 2020 to reach $30.5 billion, according to MPA’s new report, Asia Pacific Online Video & Broadband Distribution 2021.
Asia Pacific online subscription video-on-demand (SVOD) overtook AVOD to contribute 53% of total revenues; AVOD contributed 47%. Total online video revenues are projected to grow at a CAGR of 12% to reach $54.5 bil. by 2025, with SVOD contributing 57% and advertising, 43%. Ex-China, total Asia Pacific online video revenues grew 14% in 2020 to reach $14 bil. with SVOD contributing 48% and AVOD, 52%. Ex-China Asia Pacific online video revenues are forecast to climb at a CAGR of 16% to $30 bil. by 2025 with the SVOD:AVOD ratio moving to 52:48.
SVOD grew 34% in 2020 to $16.3 bil. in revenues, with China contributing 58%. Ex-China, the Asia Pacific SVOD sector grew revenues by 47% to $6.8 bil. in 2020. SVOD revenue is projected to reach $15.3 bil. in APAC ex China by 2025 and $31.3 bil. with China.
Weak advertiser demand resulted in Asia Pacific online advertising video-on-demand (AVOD) revenues declining 3% in 2020 to $14.2 bil.
AVOD outlook is improving with a recovery evident in China, India, Korea and Southeast Asia. 2021 Asia Pacific AVOD revenues are set to expand 13% to $16.1 bil. and grow to $23.2 bil. by 2025.
Commenting on the findings of the report, MPA executive director Vivek Couto said: “During 2020, the COVID-19 pandemic created a work-from-home (WFH) environment that scaled the adoption of online services, including SVOD. The average number of SVOD services subscribed by customers outside of China grew through 2020, reaching 3.8 in Australia and Japan and 2.8 in markets such as India and Southeast Asia. While subscriber growth will decelerate in 2021 and the production of new content will remain impacted in 1H 2021, the scale and velocity of investment in premium content should ensure that net new customer additions will remain robust over the medium term.
Moreover, profitability should grow more rapidly than revenues and subscribers as online businesses scale. This is particularly true in larger markets such as Australia, China, Japan and Korea.
“In the emerging markets of India and Southeast Asia, the landscape for SVOD is promising but is still being shaped because of growing competitive intensity with increased investment in content and distribution.
“Theatrical windows are narrowing for online video operators while key genres are moving rapidly and exclusively online. Mobile plans and low ARPU pricing are becoming common to drive affordability, reach and customer adoption across large pre-paid consumer segments. ARPUs will remain compressed as platforms scale in markets such as India and Indonesia. The future will also see more distribution deals with mobile, fixed broadband, pay-TV and smart TV operators to drive consumption and payment on small and big screens. Evolving regulations may impact content creation and investment as governments look to introduce censorship and impose content quotas.”
MARKET LEADERS
According to the MPA analysis, 13 online video operators accounted for more than 70% of Asia Pacific online video revenues in 2019, generating $21.1 bil. in aggregate. Bytedance, Tencent Video and iQIYI remain strong in China and have expanded globally with Tencent Video’s WeTV and iQIYI slowly making inroads into Southeast Asia. Netflix has built a strong business in Asia Pacific, on the back of growing success in Japan, Korea and Australia. Amazon Prime Video is successful in India and Japan and is growing in Australia.
Disney’s global SVOD expansion has been a success to date. Its subscribers in India are low-ARPU but the platform could secure more than 80 mil. subscribers if it can retain key sports rights and continue to invest in local originals.
The launch of Disney+ Hotstar in Indonesia has met with early success especially in terms of reach and paid subscribers. The core Disney+ service has succeeded in Australia and New Zealand and is growing in Japan. These markets will benefit from the launch of Star (as part of Disney+) in 2021 as access to series and movies from ABC, Fox and FX brands should help drive customer growth.
