VOD to reach 228.3MN subscribers in China in 2016
DetailsRebecca Hawkes | 12 March 2015
Subscription video-on-demand services will reach 28.3 million users in China within the next two years as exclusive deals are sealed for premium sports content like the English Premier League, suggests a new report from Pyramid Research.
Come 2016, Chinese subscription video on demand (SVOD) services will generate over US$1.2 billion, accounting for 6% of overall pay-TV revenue. The increased take-up will be simultaneous to the rollout of fibre to the home (FTTH) broadband connections, which look set to almost double from 66 million in 2014 to 117 million in 2016.
From 2010 to 2013, English Premier League (EPL) football was available to watch without subscription on free-to-air (FTA) television in China, as well as on over the top (OTT) video platforms and online platforms such as Sina. The platforms had to pay content holders according to the traffic they attracted and the advertising revenue they generated. Since 2014, however, Super Sports Media Group (SMGG), which owns the EPL media rights to in China, has raised the annual fee for EPL games from US$1 million to $11 million.
Only cash-rich OTT players LeTV and PPTV, along with SMGG's online platform, were able to raise this figure, and together they now broadcast more English Premier League football matches in China than traditional free-to-air broadcasters.
"It is fascinating to see that OTT plays a bigger role in securing exclusive rights for paid sports content in China. As FTA platforms find it more challenging to pinpoint sports viewers to shore up advertisement revenue, OTT players will seek further differentiation with premium sports, which can be as valuable as extensive film and television libraries," said Hansang He, analyst, Pyramid Research .
Chinese OTT will be well positioned to charge subscribers for EPL-only packages through a range of on-demand options within the next two years, such as charging per game, per club, or on a weekly or monthly basis – on top of existing subscription fees or in combination with other exclusive sports packages, predicts the market research company.