A major new study released Monday shows that the Asia-Pacific region is the biggest contributor to the growth of the global online-video industry.
With the U.S. and Europe fast maturing and China inaccessible, APAC’s large markets – India, Indonesia, Japan, Korea and Thailand – will be increasingly important to global platforms, said consultancy and research firm Media Partners Asia in its report “Asia Pacific Online Video & Broadband Distribution 2022.”
The report, which includes AVOD and SVOD segments, covers China, India, Australasia and Southeast Asia. As well as South Korea or Japan. SVOD will make up 50%, while user-generated content-driven ad supported VOD 37% and premium AVOD 13%.
The industry is projected to grow at a 8% compound annual growth rate to reach $72.7 Billion in 2027. This will be despite the fact that the industry mix of SVODs and AVOD has not changed.
China’s Bytedance, operator of Douyin and Tiktok, has the largest video revenue in the region with a 2022 figure close to $7 billion. China is home to three of the five largest companies by revenue. MPA ranks the five biggest companies in China as: YouTube, Tencent Video (YouTube), Netflix, and iQiyi.
“YouTube and Meta are being challenged by ByteDance. TikTok’s consumption continues to soar in Southeast Asia in particular, and monetization is building. YouTube still dominates in Japan and Korea,”The report provides more information.
Two long-form platforms Tencent Video, iQIYI and two short-form video players ByteDance, are the most popular in China. Those four are forecast to capture some 70% of China’s online video revenue in 2022. And China, despite regulatory hurdles and increasing maturity, will remain APAC’s largest single video market. It is expected to grow at an annual rate of 5% to 2027, with revenues exceeding $30 billion (or 42% of APAC’s total). However, China’s video market is “insular and largely closed to international streamers.”
YouTube, Netflix and Amazon Prime Video account for almost half of all online video revenue outside of China. MPA forecasts figures coming in at $5.7 billion, Netflix at $4 billion, Amazon’s Prime Video at $1.4 billion; and Disney at $1.3 billion in 2022.
The report describes Australia as “a high revenue generating market [where] SVOD has reached maturity, with household penetration at 85% in 2022, higher than even the U.S.”
Both for content and industry growth, Japan and Korea are important markets. Both countries have high average revenue per client (ARPU), high advertising rates and CPM, but online video penetration in both countries is much lower than that of Australia or the U.S. The penetration rate of households in Japan is 49%, and Korea is 42%. After China, Japan is the region’s largest OTT market by revenue, generating $9.7 billion in 2022. It is projected to increase to $14.7 million by 2027.
India’s streaming video market is “in its second growth phase,”According to the report, total revenues will reach $3 billion by 2022. The report predicts that this figure will rise to nearly $7 billion by 2027. MPA believes that India’s competition between giants worldwide and newly capitalized local players will continue to increase. Five leading platforms – YouTube, Meta, Disney+ Hotstar, Amazon Prime Video and Netflix – will account for a combined 82% of total online video revenues in 2022.
The market leaders in Asia-Pacific SVOD are Amazon, Disney, and Netflix.
“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,”According to the report.
Prime Video is the leading SVOD provider in Japan, while it also has a rapid growth rate in India. Prime Video is set to expand into key markets in Southeast Asia starting the fourth quarter 2022.
In Australia, Indonesia, Japan and Korea, successful locally-owned platforms are emerging. “Indonesia’s Vidio is leveraging content production synergies and a library of popular local entertainment content and sports rights, to drive a potentially large scale SVOD business,”According to the report. “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, Tving from CJ ENM and Wavve from SK Telecom and Korea’s major FTA networks, have also reached a level of SVOD scale. The report predicts consolidation in Korea’s market. Seezn announced this month that it would merge with TVing. “Consolidation is also likely to occur in Japan where Hulu Japan and UNext have emerged as important local SVOD platforms,”It says.
Half a dozen themes are included in the report.
- Online access to high-quality local content with travelability is on the rise, led by Korea and Japan, China, India (Thailand), Thailand, and Taiwan.
- Premium sports rights (especially cricket and soccer) are now available online in countries like Australia, India. Indonesia, Korea. Singapore. Thailand.
- Companies that are focused on revenue growth are more inclined to switch to “more rational models, anchored to monetizable reach through telcos and organic, direct customer funnels”;
- Inflation remains a problem, particularly in India, Japan, Korea, and, increasingly, Thailand.
- Also, online piracy is a growing problem “alarmingly high”In markets like India and throughout Southeast Asia
- Rising incomes and a growing middle class have helped to make emerging markets more affordable. However, micro ARPU rural and the second-tier regions will continue to gain importance, particularly in India and Indonesia.