Asia-Pac online video to soar to $35BN over next five years

Traditional ChineseOnline video revenue in the Asia Pacific region is expected to reach $35 billion by 2021, an average annual growth of 22% from US$13 billion in 2016, says a report published by Media Partners Asia (MPA).



Traditional ChineseIn its Asia Pacific Online Video Distribution report, the analyst found that China will remain the largest market, accounting for just over three-quarters of Asia Pacific online video revenue by 2021. Japan, Australia, Korea and India are expected to jointly account for 17% of regional online video revenue by 2021.

MPA calculated that online video advertising accounted for less than 15% of Asia Pacific digital ad spend in 2015 but that this will grow to 22% by 2021. Online video ad sales will reach approximately $22 billion by 2021 versus $9 billion in 2016, a 19% CAGR. China will represent more than 70% of the online video advertising by 2021.

For online subscription video-on-demand (SVOD), MPA forecasts total paying customers to grow from 177 million by 2016 to 360 million by 2021, with China contributing the majority. It believes that SVOD revenue will likely reach US$13 billion by 2021, a 28% CAGR from US$3.7 billion in 2016. China will again contribute the majority, representing more than 80% by 2021. The Southeast Asia SVOD opportunity will grow rapidly but from a low base, representing about US$200 million in revenue by 2021.

Asia Pacific fixed broadband subs will reach 345 million in 2016, and grow to 425 million by 2021. Average broadband household penetration will grow from 35% in 2016 to 41% in 2021. Mobile broadband will reach 79% of the Asia Pacific population by 2021, versus 46% in 2016.

Commenting on the report findings, MPA executive director Vivek Couto said: “The growth of broadband, combined with slow but progressive change in content licensing, is driving demand for online video services. However, the distribution of driver local content online is modest, especially outside of China, India and Korea. This is evident in Southeast Asia, where broadband penetration is growing rapidly but from a low base in most markets.

“Telecom operators in these markets are investing in broadband networks and integrating with online video platforms to help drive subscriptions. This allows online video operators to utilise carrier billing, overcoming market limitations in payment infrastructure. It’s a bet to drive online video consumption in the short term and ARPUs in the long term.”