According to the study, Asia is crucial for the growth of the global online video industry

Asia-Pacific is now the largest contributor to the growth of the global online video industry, a major new study released Monday shows.

With the U.S. and Europe maturing fast and China inaccessible, Asia-Pacific’s big markets — India, Indonesia, Japan, Korea and Thailand — are becoming increasingly important for global platforms, consulting and research firm Media Partners Asia said in its Asia Pacific Online Video & Broadband Distribution 2022 Report.

The report, which covers the AVOD and SVOD sectors and includes China, India, Australasia, Southeast Asia, as well as South Korea and Japan, shows that the entire industry is set to grow 16% year-to-date to $49.2 billion. SVOD contributes 50%; user-generated content-driven ad-supported VOD 37%; and premium AVOD, 13%.

The industry is projected to grow at a compound growth rate of 8% to $72.7 billion by 2027, with little change in the mix of SVOD and AVOD.

China’s Bytedance, which operates Douyin and Tiktok, has the largest video revenue in the region at nearly $7 billion in 2022. In fact, China has three companies in the top 5 by revenue. MPA ranks among the top five: Bytedance, YouTube, Tencent Video, Netflix, and iQiyi.

“YouTube and Meta are challenged by ByteDance. TikTok consumption continues to rise, particularly in Southeast Asia, and monetization is increasing. YouTube still dominates in Japan and Korea,” the report states.

Within China, two long-form platforms lead Tencent Video and iQIYI, and two short-form video players ByteDance and Kuaishou. These four are predicted to capture about 70% of China’s online video revenue by 2022. And China will remain the largest single video market in APAC, despite regulatory hurdles and increasing maturity. It is projected to grow 5% annually through 2027, with revenue in excess of $30 billion, or 42% of APAC’s total. However, China’s video market is “locked down and largely closed to international streamers.”

Outside of China, YouTube, Netflix, Disney and Amazon Prime Video account for nearly 50% of the region’s online video revenue. MPA forecasts $5.7 billion, Netflix $4 billion, Amazon Prime Video $1.4 billion; and Disney at $1.3 billion in 2022.

The report describes Australia as “a high-volume market [where] SVOD is mature, with household penetration reaching 85% in 2022, higher than even the US.”

Japan and Korea are key markets for both industry growth and content. Both countries offer high average revenue per user (ARPU) and advertising rates (CPM), but online video penetration lags far behind Australia or the US. US household penetration is 49% for Japan and 42% for Korea. After China, Japan is the region’s largest OTT market by revenue, generating $9.7 billion in 2022. It is forecast to grow to $14.7 billion by 2027.

India’s streaming video market is “in its second growth phase,” according to the report, with total revenue of $3 billion in 2022. That number is expected to more than double to nearly $7 billion by 2027. MPA says competition between global giants and newly capitalized local players in India is set to continue growing. Five leading platforms — YouTube, Meta, Disney+ Hotstar, Amazon Prime Video, and Netflix — will collectively account for 82% of total online video revenue in 2022.

In the SVOD category in Asia Pacific, the leaders are Netflix, Disney and Amazon. Outside of China, Netflix is ​​expected to have 33% of the SVOD revenue pie this year (up from 35% in 2021); Amazon Prime Video, 12%; and Disney+ (including Disney+ Hotstar) at 11%.

“Disney+ and Disney+ Hotstar services are building scaling, local content investment and monetization in markets like Australia, India, Indonesia and Thailand while expanding into strong local markets with high ARPU like Japan. However, a third of its revenue comes from India, where it recently lost the digital rights to the hugely successful IPL cricket franchise to Viacom18,” the report said.

Prime Video is a leader in the Japanese SVOD category and is also growing rapidly in India. From the fourth quarter of 2022, the company is now expected to expand into important Southeast Asian markets.

Successful local platforms are emerging in Australia, Indonesia, Japan and Korea. “Indonesia’s Vidio is leveraging content production synergies and a library of popular local entertainment content and sports rights to advance a potentially large-scale SVOD business,” the report reads. “Australia’s Stan is on a similar SVOD trajectory but faces greater competition from global giants and is more reliant on licensed and acquired content.”

In Korea, CJ ENM’s Tving and SK Telecom’s Wavve, as well as Korea’s major FTA networks, have also reached a SVOD level. However, the report forecasts consolidation in the Korean market, where it was announced earlier this month that Seezn would merge with TVing. “Consolidation is also likely to occur in Japan, where Hulu Japan and UNext have emerged as major local SVOD platforms,” ​​it said.

The report contains half a dozen thematic analyses.

  • The availability of high quality local online content with travel capability is increasing, led by Korea, Japan, China, India, Thailand and Taiwan;
  • Premium sports rights (football and cricket in particular) are coming online in markets such as Australia, India, Indonesia, Korea, Singapore and Thailand;
  • Companies with models geared towards revenue growth are increasingly shifting to “more streamlined models anchored on monetizable reach through telcos and organic, direct customer funnels”;
  • Content inflation remains a challenge, particularly in India, Japan, Korea and increasingly Thailand.
  • Online piracy is also “alarmingly high” in markets like India and across Southeast Asia.
  • Rising incomes and a growing middle class have helped boost affordability in emerging markets, but rural micro-ARPU and second-tier regions are likely to gain prominence, particularly in India and Indonesia. According to the study, Asia is crucial for the growth of the global online video industry

Charles Jones

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