Warc, 6 May 2014
MUMBAI: The expansion of the digital pay-TV market in Asia has slowed, with just 26m net new customers added across the region during 2013, new data have shown.
According to figures from Media Partners Asia (MPA), announced at the Asia Pacific Operators Summit in Bali and reported by Indiantelevision.com, this was the lowest annual growth since 2007. MPA revised downwards future growth forecasts to 9% CAGR out to 2018, while anticipating that pay-TV penetration would increase from the current figure of 53% to reach 60%.
In particular, the information services business noted that the Chinese and Indian markets had softened although it expected some uplift in the latter during 2015-16 as the digitisation of Indian TV continued.
MPA executive director Vivek Couto explained: "Now we see the next delayed phase of digitisation that is phase III, boosting net new subscribers [in Indian] to 8 million a year in 2015 and 7 million in 2016 before decelerating again by 2018."
Of the existing 60m digital subscribers some 37 million came from DTH and the remaining 23 million from cable.
"Over the last 24 months, it's been a transitionary process for the cable industry in India," said Couto as he outlined the economics of the situation facing operators there.
"While in the analogue regime, the multi system operators were at Rs 11 per subscriber, in the digital era, the MSOs are now getting anywhere between Rs 50-70 in Mumbai and Delhi. They will now need to get to Rs 100-110 to start breaking even on video excluding carriage," he stated.
The Chinese market faced a different challenge, as IPTV, internet TV and online video provided strong competition to traditional pay TV channels. IPTV, for example had seen 5.6 million net additions in 2013 thanks to increasing broadband reach and accompanying content.
"Looking at the macro landscape, you can see pay-TV penetration marginally improve in China over the next five years and this will deliver real pay models, driven largely by IPTV," observed Couto.
The greatest growth in southeast Asia last year came in Indonesia and Malaysia, which together accounted for almost half of all net additions and these two, along with the Philippines, are projected to drive future increases.
Data sourced from Indiantelevision.com; additional content by Warc staff