Total Asia Pacific online video industry revenue will grow by 16% year-on-year in 2022 to reach $49.2 billion, according to the new report Asia Pacific Online Video and Broadband Distribution 2022, published by Media Partners Asia (MPA). Subscription video on demand (SVOD) will contribute 50%; UGC AVOD (advertising video on demand), 37% and Premium AVOD, 13%. The industry is to grow at an 8% CAGR to reach $72.7 billion in 2027, with SVOD:AVOD ratios remaining stable. Ex-China, the APAC online video industry will grow 24% in 2022 to reach $25.6 billion in revenue with SVOD contributing 47%; UGC AVOD, 43%; and Premium AVOD, 10%. Ex-China APAC online video revenues are forecast to grow at a CAGR of 11% to $42.8 billion by 2027, with SVOD at 44%; UGC AVOD, 43% and Premium AVOD, 13%.
Investors are increasingly focused on enhanced scale, improved monetisation and real profitability across global, local and regional online video platforms, Vivek Couto, executive director, MPA, said. “In this context, the role of Asia Pacific continues to have a critical role in the future of the global online video industry. The region remains the largest growth contributor to global online video customers and users today and is emerging as a significant contributor to revenue growth. With the US and Europe fast maturing and China inaccessible, APAC’s large markets – India, Indonesia, Japan, Korea and Thailand – will be increasingly important to global platforms. Each of these markets require local content and distribution strategies with long-term investment,” he added.
Ex-China, Japan is APAC’s largest OTT revenue market, generating $9.7 billion in 2022. India’s streaming OTT video market is in its second growth phase with total revenues of $3 billion in 2022 expected to more than double to almost $7 billion by 2027. Competitive intensity is set to grow between global giants and newly capitalised local players. Telco reach remains critical in the market along with AVOD business models and low-ARPU, high volume SVOD services.
The total addressable market (TAM) for high-speed broadband continues to expand rapidly in the Asia Pacific with greater 4G, 5G and fiber-enabled connectivity. Ex-China, combined 4G and 5G users will reach 78% of the population across APAC in 2022 while fiber driven fixed broadband penetration will reach 31%. Telcos, connected TV (CTV) operators and pay-TV operators remain important aggregators of SVOD, freemium and AVOD services, contributing between 20-80% to OTT video platform reach, depending on the market. Rising CTV penetration and big screen consumption is helping fuel advertising growth across YouTube and premium AVOD platforms, led by BVOD players in particular, while also bolstering demand and monetization at SVOD platforms.
According to MPA analysis, 20 online video platforms will account for 67% of the total APAC online video revenue pie. YouTube leads with an estimated 42% share of the APAC ex-China AVOD pie in 2022. Meta Video is also sizable. Both YouTube and Meta are being challenged by China’s ByteDance, which owns and operates TikTok in international markets. TikTok’s consumption continues to soar in Southeast Asia in particular with its short videos and monetization is building. YouTube still dominates in Japan and Korea.
In the global SVOD category in APAC, Netflix, Disney and Amazon lead. According to MPA, the three players will have a 56% share in aggregate of the APAC ex-China SVOD pie in 2022 with Netflix at 33%; Amazon Prime Video, 12%; and Disney+ (including Disney+ Hotstar) at 11%.
Netflix established an early lead given its launch and expansion in APAC after 2015-16 and success with premium Korean and Japanese content in particular. Its share of revenues has declined however from 35% in 2021. Disney+ and Disney+Hotstar services are building scale, local content investment and monetization in markets such as Australia, India, Indonesia, and Thailand while also expanding in high ARPU, strong local markets such as Japan. A third of revenues come from India however, where it has recently lost digital rights to the highly successful IPL cricket franchise to Viacom18. Prime Video leads the Japan SVOD category while also growing rapidly in India and is now set to expand in key Southeast Asia markets in Q4 2022.
In India, new local players with deep pockets are gearing up to grab market share, led by a newly recapitalised Viacom18, backed by strategics Reliance, Bodhi Tree and Paramount while domestic incumbents Zee and Sony are merging to create a strong TV / online video business. Going forward, Viacom18’s new streaming platform, leveraging IPL cricket and local entertainment, will emerge as an important player in the AVOD space in particular, grabbing material share over time as it leverages massive reach via Jio mobile and connected TV.