Even though renewed dynamism and multi-platform competition are feeling the consumption of pay-TV and broadband in Asia Pacific, this is coming at a high price for operators says a new report by Media Partners Asia (MPA). The report shows that the launch of digital TV services has unlocked the potential for future growth with the number of homes with digital pay-TV to more than double by 2015. Pay-TV subscriptions in Asia Pacific grew by 9% in 2010 to reach approximately 375 million by the end of the year, according to MPA projections which also found that around 8 million households in the region subscribed to multiple pay-TV services. This represented 367 million homes subscribing to pay-TV in Asia Pacific at the end of 2010, almost half (48% penetration) of all TV homes. This number is projected to grow to 57% of TV homes or 486 million subscribers by 2015, and to 62% of TV homes or 570 million subscribers by 2020. India is predicted to be set to overtake US as largest satellite market sometime in 2012, even surpassing China as the largest pay-TV ad market by 2018. Such uptake was at the heart of revenues for the pay-TV industry in Asia Pacific increasing by 14% in 2010 to reach US$38 billion. Pay-TV advertising in Asia Pacific rockets from only 4% growth in 2009 to 15% growth in 2010 to reach approximately US$8 billion in net terms, representing about 25% of total TV advertising in the region. Subscription revenues meanwhile grew by 14% in 2010 to reach US$30 billion, with consumer spends on pay-TV growing by 4% on average. MPA predicts pay-TV industry revenues in Asia Pacific will grow at a 10% CAGR between 2010 and 2015 and at 8% CAGR between 2010 and 2020, to reach US$60 billion by 2015 and US$78 billion by 2020 respectively. Yet the analyst cautions that growth depends on investment in content, distribution and new technology, benefiting consumers and that this is the result of significant investment on behalf of the providers. Investment in content is said to be optimal in markets such as Australia, Japan and Singapore, and growing in markets such as Malaysia and Korea, where pay-TV operators are investing in self-produced content and relevant turnaround channels to retain competitive advantage. However, content investment is poor in the largest markets, China and India. The likely net result will be margin pressure for pay-TV providers in particular India, Japan, Korea and Malaysia. Commented Vivek Couto, executive director of MPA, said: "These trends will prevail over the medium term due to competitive intensity, well meaning but counter-productive regulation and industry fragmentation. Having said that, we already see operating leverage improving in a number of markets. Future growth also hinges on continued improvement in ground-level execution, talent and regulation, especially in India, China and Southeast Asia. Our research shows that the growth of broadband represents more of an opportunity than a threat for pay-TV companies; the key cross-sector competitive dynamic in most markets remains fierce competition from free TV. There is a bright future for pay-TV in Asia Pacific but it belongs to companies willing to invest and innovate, positioning themselves as consumer businesses.