The total pay TV industry in India will grow at a CAGR of 6% to touch $15 billion by 2024. According to Asia Pacific Pay-TV Distribution 2020, a new report published by Media Partners Asia (MPA), an independent provider of research, advisory and consulting services across media, telecom and technology industries in Asia Pacific, India remains the highest growth and most scalable pay-TV market in the Asia Pacific region. The total APAC pay-TV industry revenue, comprising subscription fees and local and regional advertising sales, will grow at a CAGR of 3% to top $66 billion by 2024. TV industry revenue in the area grew 6% in 2019 to reach $57 billion.
However, there remains significant near-term uncertainty in India due to the impending enforcement of recent regulations by the Telecom Regulatory Authority of India (Trai). According to the new tariff order brought in by the regulator in December 2018, consumers could choose the TV channels they want to watch and pay only for them at maximum retail prices (MRPs) set by broadcasters, instead of the pre-set bouquets offered earlier. The new tariff order was expected to make channels cheaper for the consumer and offer more choice. However, on ground, the opposite happened as the cost of like-to-like channel options went up.
According to the report, China and Korea will both grow at CAGR of 3% to reach $27 billion and $8.3 billion in revenue by 2024 respectively while Japan will climb 1% to $7 billion.
Excluding China and India, total Asia Pacific pay-TV revenue grew only 1.3% in 2019 to reach $23 billion and is projected to climb 1.1% CAGR to reach $25 billion by 2024. Australia, Hong Kong, New Zealand, Malaysia, Singapore, Taiwan and Thailand will register CAGR revenue declines in the range of 1-5% over 2019-24 while growth will moderate in the Philippines and Vietnam, the report said.
Asia Pacific, including China and India, added 12.8 million net new subscribers in 2019 with India contributing 47% and China, 37%. The total Asia Pacific pay-TV subscriber base grew 2% in 2019 to reach 630 million, representing 62% penetration of total TV homes, adjusted for multiple subscriptions in a home. MPA projections indicate that total Asia Pacific pay-TV subscribers will grow at a CAGR of 1% between 2019-24 to reach 663 million by 2024, representing 63% penetration, adjusted for multiple subscriptions.
India will also contribute almost half of net subscriber additions in Asia Pacific over the next five years.
“Mushrooming consumer choice and piracy across the digital ecosystem has created cracks in the traditional pay-TV ecosystem. Business models remain dependent on the monetization of branded channels and sports rights in the pay-TV window. But the growth of legal online video services means that pay-TV operators and content providers are striving to distribute and monetize online,” MPA executive director Vivek Couto said in a statement. Inevitably, this strategy is being executed at a significant potential cost with the risk of cannibalization and growth at the expense of household-based pay-TV.
“For pay-TV operators with a broadband business, such a strategy could lead to fresh opportunity as key players reaggregate new bundles of branded channels and OTT video. For others, long-term subscriber erosion is a reality with the emphasis on serving and retaining existing premium customers and managing content costs and where possible, entering into partnerships and M&A with telcos and broadband operators,” he added. Livemint