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Far from fading,televisioncontinues to shinebrightly in Asia, isthe confidentverdict fromAravindVenugopal. Asanalyst at MediaPartners Asia, aleading provider ofresearch andanalysis on mediaand telecoms inAsia, he has thefinger on the pulseof what'shappening in thewhole region. Hereis his overview andoutlook

he televisionindustry in AsiaPacific remains fullof growth with muchmore potential inthe years to come.TV viewership,

including both terrestrial free‐to‐air(FTA) and pay‐TV, continues togrow, especially in emergingmarkets such as India and acrossSoutheast Asia. At the same time,strong macro‐economic drivers arecreating a powerful demand driverfor TV. This is helping fuel both TVand pay‐TV household penetration.

According to Media PartnersAsia (MPA), the proportion ofhouseholds that have at least oneTV set in Asia Pacific topped 80% in2011 and will trend towards 90% by2020. Television viewership inSoutheast Asia and India istrending at around four hours aday and FTA TV has an average70% or more of the total advertisingpie in Southeast Asia (with theexception of Malaysia where print

has ~50% share), close to 45% inIndia and 30% ‐ 40% in North Asia,where broadband and online ismore pervasive.

Key macro drivers of future TVindustry growth include risingincomes, literacy and the growth ofhouseholds and urbanisation inmajor geographies. Industry driversinclude the massive growth of localand regional programming inAsia’s largest markets and itsappeal to consumers across massdemographics as well as keyadvertisers.

At the same time, pay‐TVpenetration is growing rapidly,reaching 43% of total households(or more than 50% of TV homes) inAsia Pacific last year. This isexpected to grow to about 65% by2020 (about 70% of total TV homes),according to MPA. The growth ofboth digital terrestrial TV (DTT)and digital pay‐TV in the years tocome is important as DTV switch‐over approaches in key marketsover the next decade, including

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China, India, Korea and SEA.About a third of TV homes in Asiahad DTV as of end‐2011; this isexpected to surpass 70% by 2020,driven largely by pay‐TV withsome DTT, according to MPA.

OTT IMPACTAll this optimism about TV is not tosay that the growth of broadband isnot having an impact. Fibre deploy‐ment, which supports sufficientspeeds for quality online video,grew 27% in 2011 to reach less than70 million homes, still only 7%household penetration, though thisis expected to double to 15% overthe next decade, implying a base ofmore than 160 million homes. Thisbase will easily be able to receivebroadcast quality video contentonline.

Much of the volume and markettoday for over‐the‐top (OTT) servicesand online video is in early deployerssuch as Hong Kong, Japan, Koreaand China but going forward nextgeneration broadband systems willproliferate in Australia, Singaporeand Taiwan, while there will also bepockets of growth in parts ofSoutheast Asia. This should be anopportunity rather than a threat forTV broadcasters and operators,especially those who continue toinvest in network and content forproduct innovation.

The multi‐screen approach,embracing the four‐screen era (TV,smartphone, tablet and PC), is keyfor many integrated media andtelecom operators in Asia, wrestlingwith the likes of Apple to integrateHD content, cloud storage anddigital eco‐system services acrossdifferent screens.

Operators in Australia and Japanhave long led the way in HD andDVR deployment, and are nowinnovating with multi‐screen andTV Everywhere type services. In

Hong Kong, Singapore, Taiwan andMalaysia, operators have embracedproduct innovation and multi‐screen strategies, while over thecoming months packaging will besimplified in these markets and theuser interface improved (especiallyin Singapore and Hong Kong).

Operators in Singapore, Taiwan,Korea, Australia and Malaysia havealso driven HD growth andaccelerated broadband speeds tomaximize the consumer experiencewhile in Korea, Australia andMalaysia, KT SkyLife, Foxtel andAstro have rolled out hybrid DTH‐IP set top box services offeringconsumers HD channels, VOD andInternet functionality.

In China, traditional cableoperators have digitalisedinfrastructure and are nowdeploying VAS and HD services.

In Asia’s growth markets – India,Indonesia and Southeast Asia – thefocus remains very much on singleproducts, as TV remains a vitalconsumer media growth platform.Nonetheless, DTH and cableoperators are investing in HD andDVRs, though the focus is onvolumes and grabbing eyeballs. Inthe future, DTH platforms may berequired to transition to a multi‐play strategy as broadbandadoption picks up, though fibrepenetration will remain modest inIndia and Indonesia in particular.

PAY-TV GROWTHThe key to the future of pay‐TV isdependent on the next five years ofdevelopment in India andSoutheast Asia. Pay‐TV in Indiaand Indonesia is growing at a rapidpace in particular, with competitionintensifying and structuraldynamics changing, while DTHplatforms are emerging as keygatekeepers. Similar trends areoccurring, though arguably with

less intensity, in markets such asMalaysia, Philippines, Thailandand Vietnam.

Future growth in these marketswill depend on ground executionand access to capital. India is set toundergo a massive digitalizationprocess that will drive value acrossthe industry eco‐system, but it is aprocess that will require strongexecution and high levels offunding. Multiple new operatorsare entering into Indonesia’s pay‐TV market, while incumbents arealso consolidating and accessingcapital markets to fund futuregrowth. In Thailand and Malaysia,new entrants could drive large‐scale growth but there is asignificant risk on ground execution.

MPA projections indicate thatthe pay‐TV market in Asia Pacificadded 35 million net new homes in2011. Excluding the utility‐drivenChina market, the region added 15million new subscribers. Ex‐China,India accounted for more than 60%of the new growth in 2011, withSoutheast Asia contributing 15%, ledby Indonesia with 5%. North Asiaremains significant, contributing17% to net adds in Asia ex‐China in2011, driven by Korea at 11%(fueled by DTH and IPTV).

MPA analysis also indicates thatglobal pay‐TV penetration will growfrom 58% to 72% between 2011 and2016, driven in particular by thegrowth of key distribution platformsin Asia Pacific. The latter will accountfor 62% of global pay‐TV subscribersby 2016 versus 57% in 2011, drivenby contributions from markets such

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In Chinarevenuesfrom HDand VASwill growrapidly

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Asia Pacific TV Industry Revenue Trends (US$ bil.)

2011 2012 2013 2014 2015 2016 CAGR 2011-16

Total TV Sales 69.2 74.5 80.3 86.4 91.5 98.5 7.3%

Advertising 35.9 37.9 40.3 43.1 45.6 48.4 6.1%

Subscription 33.3 36.7 40.0 43.4 46.0 50.1 8.5%Note: Includes free-to-air and pay-TV platforms with recognition of linear and non-linear servicesSource: Media Partners Asia

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as China, India, Indonesia,Malaysia, Japan and Korea.

MPA projections indicate thatbetween 2011 and 2020 the marketfor pay‐TV in Asia will see 318million‐plus net new additions, or125 million in Asia ex‐China. SouthAsia’s (i.e. India, Pakistan, SriLanka) contribution to new growthex‐China will be more than 75%,with Southeast Asia representing15% (led by Indonesia at 5%) andNorth Asia coming in at 8%.

In addition, digitalization willhave a major impact on industrygrowth in China, Japan, Korea,Malaysia, the Philippines, Thailand,Vietnam and Taiwan, as operatorsinvest more in upgraded networks tosupport new services, volumes andhigher average revenue per user.

KEY MARKETSChina, India and Indonesiadominate growth trends for the TVindustry while Thailand, Vietnamand the Philippines also offergrowth potential along with untapped

territories such as Myanmar.In Indonesia television industry

sales will grow at 17% over 2011–16to reach US$3.5 billion per year innet terms by 2016, says MPA, drivenby FTA terrestrial advertisinggrowth and the proliferation ofDTH‐driven pay‐TV. FTA networks,in aggregate, are expected to retainabout 70% of the media ad spend pieby 2016 while pay‐TV penetrationis expected to climb from only 5%in 2011 to 14% by 2016.

No one stands still in Indonesia.Many of the groups that acquireand produce local and internationalcontent, including MNC group,Emtek, Trans, and Bakrie / Viva, arealso in the driving seat for pay‐TVand online media. MNC owns thelargest pay‐TV operator, significantproduction capabilities and a clutchof online sites; Trans has a leadingonline presence and scores ofstudios; Emtek, a FTA cash cow, haslaunched a DTT‐enabled pay‐TVservice; and Bakrie is investing inonline and may move into pay‐TV.

DTT WILL BE BIG The big new development inIndonesia is DTT licences, thebidding for which is underwaywith 41 licences up for grabsalthough actual commercial launchwill likely only play out afteranother 2‐3 years. The DTT licenceswill be split into 15 service zoneswith the four existing broadcastgroups. While the cost to upgradeis affordable for existing groups,the cost to the government andrelated associations is steep.

In China, macro‐economicfundamentals and a strong nationalmandate will continue to drivedigital growth for all TVdistribution platforms includingdigital cable TV, IPTV and DTH aswell as broadband. Any upside tothe growth of pay‐TV remainscapped however, due to regulatorydynamics and the development ofbroadband online platforms as apotentially more viable window forpremium content. That said,revenues from HD and value‐added services (VAS) will growrapidly as the adoption of HDTVand VOD reaches critical mass.

India remains a large scale cable& satellite marketplace with morethan 600 channels. The transition topay‐TV was first driven by thesignificant growth of DTH after2006 and now the focus is ondigitising India’s fragmented 80 ‐90 million or so cable households,which the government wants totake place over the next three years.

Digitalisation will undoubtedlyboost commercial and contentprospects for televisionbroadcasters. The first boost willcome through a higher proportionof subscription revenues, as well aspotentially rationalized carriageand placement fees, which channelscurrently pay out to cableoperators. At the same time,broadcasters in both niche andmass genres will need toprogramme stronger, differentiatedcontent to survive and prosper, andcreate consumer demand in a neweco‐system. ■

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The bignew develop-ment inIndonesiais DTT licences

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KT SkyLife is making inroads with3D as well as HDAnindya Bakrie, head of VIVA -owner of Indonesia’s tvOne and antvAstro On-the-Go gives customersconstant access to channels

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MarketsTotal TV Sales (US$ bil.)

China 31.1

Japan 22.3

India 14.3

Australia 7.9

Korea 7.4

Indonesia 3.5

Taiwan 2.4Note: Includes net advertisingafter discounts and subscriptionfees

Source: Media Partners Asia

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