MUMBAI: New research on the pay-TV channel ecosystem shows India powering revenue and profit growth for regional pay-TV broadcasters in Asia Pacific. Revenue for pay-TV channel groups owned by global media companies expanded by 4 per cent in 2017 to reach USD 5 billion across the region, while ebitda grew by 9 per cent year-on-year (yoy) to reach USD 1 billion according to leading industry analysts Media Partners Asia (MPA).
India continues to make a massive contribution to this pie, led by large local channel businesses owned and operated by 21st Century Fox, Sony and Viacom. MPA’s figures show India comprising 65 per cent of revenue for regional pay-TV channel groups in 2017, followed by Southeast Asia with 15 per cent, Japan with 7 per cent and Australia with 5 per cent.
Media Partners Asia executive director Vivek Couto said, “Success in a large-scale market such as India shows that regional broadcasters that invest in IP and local businesses can create a lot of long-term value.”
Excluding large local pay channel businesses in India, pay-TV channel revenue for regional broadcasters declined by 1 per cent across the region in 2017, inching down to USD 2.2 billion while ebitda contracted by 4 per cent yoy to USD560 million. The performance reflects a more challenging wholesale and retail market for pay-TV in Southeast Asia as well as in Australia and New Zealand, Japan and Hong Kong and Taiwan. Nonetheless, Southeast Asia still leads the top-line contribution for this revenue segment at 33 per cent, followed by India (20 per cent), Japan (16 per cent), Australasia (11per cent) and Hong Kong and Taiwan (11 per cent).
Ex-India, declines have been evenly spread across most genres. The notable exception is sports, wherein the growth of BeIN Media has helped boost the category. Together, factual, lifestyle, kids, news, music, movie and Asian entertainment channels experienced an aggregate contraction of close to US$150 million in affiliate and advertising sales ex-India in 2017.
Nonetheless, a number of global broadcasters with investments in Asia are still seeing sustained growth in the region on the back of licencing deals and partnerships with online video and telecom platforms, growth of consumer products and nascent online video advertising. Leading broadcasters will also accelerate development of their own branded online video services in the region, a trend already underway with the launch of key entertainment and sports OTT platforms over 2016-17. Partnerships with streaming and telecom services will also proliferate over 2018.
In India, macro hurdles as well as competitive and regulatory pressures will impact near-term performance for foreign-owned pay channels, MPA said.
Nonetheless, major players should still outperform the market with strong double-digit growth along with longer-term upside from the growth of branded online video networks.“Success in a large-scale market such as India shows that regional broadcasters that invest in IP and local businesses can create a lot of long-term value,” said Couto. “These bets are starting to percolate across Southeast Asia, Korea and Japan. At the same time, businesses are starting to tap more growth from streaming platforms, including partnerships with online video and telco services.”
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