APAC pay-TV penetration set to fall
Details
Joseph O'Halloran
| 30 July 2019

The cord-cutting contagion that is blighting the pay-TV industry in the US has spread to the Asia-Pacific region with penetration set to decline marginally until 2023 says research from GlobalData.

The data and analytics company found in its Pay-TV Market Trends and Opportunities in Asia Pacific – 2019 study that cord-cutting in what it called the ‘developed’ parts of the APAC region was set to offset gains in direct-to-home (DTH) and IPTV in emerging APAC — defined as South and Southeast Asia. As a result, GlobalData predicts that the overall region is forecast to witness a marginal decline in pay-TV household penetration from 67.4% in 2018 to 67.0% by the end of 2023.

The research found the APAC region’s pay-TV market very diverse, with household penetration levels ranging from 11% in Indonesia to 168% in South Korea at the end of 2018. Not surprisingly the report shows that China and India are currently the largest pay-TV markets in the region with 415.6 million and 177.2 million subscriptions respectively at the end of 2018. South Korea was the next biggest market but way back with 33.2 million subscriptions.

GlobalData found that an increasing number of video content consumers in the region prefer services that offer watch anywhere capability. While the home TV is still an important device, customers also demand the same experience across mobile handsets, laptops and tablets. This says the company has resulted in a trend of service convergence between traditional over-the-top (OTT) and pay-TV. Yet the worrying trends is for places such as Hong Kong and Australia where during the forecast period markets are expected to witness a decline in pay-TV penetration levels primarily due to cord-cutting and the popularity of OTT video streaming platforms.

The research cited Chunghwa Telecom as a prime example of pay-TV providers providing a response to such dynamics with more modular packages to better match consumer preferences for content and price. The Taiwanese operator offers its Multimedia On Demand (MOD) service in a menu style selection manner with variable pricing per channel from US$0.16 (NT$5) to US$4.98 (NT$150), based on the cost from the content provider. This is designed to enables the company to target price sensitive customers and better compete with lower cost OTT options.

“Currently, the market is facing growing price pressure. Most OTT players offer their services at a lower price point than traditional pay-TV packages,” noted Malcolm Rogers, Telecom Analyst at GlobalData, commenting on the Pay-TV Market Trends and Opportunities in Asia Pacific – 2019 study.

“The effect is an increasing number of consumers only willing to pay for the content they know they will watch. OTT video’s relationship with pay-TV in APAC continues to evolve. Many pay-TV providers in the region have launched or will soon launch their own OTT platforms. Standalone OTT players are also increasingly seeking pay-TV provider partnerships. The pay-TV and OTT platforms are becoming increasingly integrated as customers want a device agnostic viewing experience.”