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Asia
Pacific Cable & Satellite Markets 2005
A research report by Media Partners Asia,
Ltd (MPA) on the Future of Broadband Pay TV Content, Distribution
& Technology
2004
HIGHLIGHTS
- Multi-channel subscribers up 7% Y/Y to 192.4 mil., 34% pen.
of TVHH
- Australia, Hong Kong, Korea and Malaysia show double-digit subscriber
growth
- Korea, Taiwan, India remain highest penetrated markets; Korea
overtakes Taiwan as #1 penetrated market
- Broadband IPTV over ADSL and Ethernet drives multi-channel penetration
to 50% in Hong Kong
- Digital pay TV subscribers reach 10.8 mil., 32% Y/Y growth
- Malaysia and Korea drive digital direct-to-home (DTH) satellite
growth; Japan DTH market saturates
- Australia and Japan drive digital cable growth as China, India,
Korea and Taiwan lag behind
- Korea, Japan and China boost broadband cable penetration as
modem subs reach 9.5 mil., 16% Y/Y growth
- Cable telephony subs up 32% Y/Y to 1.5 mil., driven by Japan
and Australia
- Total industry revenues grow by 14% to reach US$18.6 bil.
- Multi-channel TV subscription up 14% to US$12.8 bil.
- Net (local) pay TV advertising grows by 13% to US$2.7 bil.;
China, India and Taiwan remain primary markets
- Net (regional) pay TV advertising grows 7% to US$144 mil.
- Total revenue pie for C&S TV channels, program suppliers
up 14% in 2004 to US$5.7 bil. and up 17% in Asia (ex-Japan &
Australia) to US$3.6 bil.; Japan, India, China and Taiwan remain
the primary drivers
FUTURE PROJECTIONS
- Digital subs to grow at 18% CAGR over the next decade, reaching
48.5 mil. in 2010 and 67.4 mil. by 2015, with competition set
to accelerate between cable, satellite and broadband IPTV distributors
- Long-term forecast for digital market share: Cable (51%), DTH
(36%), Broadband IPTV (13%)
- Basic multi-channel TV subscriber growth to continue to slow
with 4% CAGR projected over 2004-2015 as total video subs reach
291 mil. (42% pen. of TVHH) by 2015
- VOIP deployments to drive cable telephony growth with total
subs forecast at over 7 mil. by 2015; cable modem growth expected
to slow, growing at 6.5% CAGR over 2004 -2015, reaching under
20 mil. subs
- Multi-channel TV revenue pie to expand to US$30 bil. by 2010
and almost US$40 bil. by 2015; subscription to grow at 9% CAGR
over 2004-2015 to reach US$33.4 bil.; advertising at 8% CAGR to
reach US$6 bil.
- Total industry revenues projected to reach US$34.3 bil. by 2008
and almost US$45 bil. by 2015.
Rapid changes in the competitive environment for video and broadband
services, the development of new technologies and the emergence
of new forms of content provision are starting to have an impact
on the distribution of broadband multi-channel pay television in
the Asia Pacific region, according to a new research report, ASIA
PACIFIC CABLE & SATELLITE MARKETS 2005 (ACSM 2005), published
by Media Partners Asia, Ltd (MPA).
Commenting on the report's findings, MPA director of content &
research Vivek Couto said:
"Competition and demand, together with greater regulatory
clarity and flexibility, will unlock greater value in the distribution
of broadband services and multi-channel television programming in
Asia. The rising penetration of subscription-based TV services and
growing viewership of cable & satellite TV channels, will also
increase the market for pay TV advertising. These dynamics support
MPA forecasts, which indicate that Asia Pacific broadband pay TV
industry revenues could grow from US$18.6 bil. in 2004 to US$34.3
bil. by 2010 and just under US$45 bil. by 2015."
"The
failure of governments around the region to provide a proper regulatory
framework for convergence may impact the ability of distributors
to invest in new programming and technologies. Nonetheless, market
demand for digital pay TV channels; high speed Internet access and
IP-based telephony will substantially grow in the future, supported
by both rising incomes and the pervasiveness of broadband infrastructure."
2004 INDUSTRY PERFORMANCE REVIEW
According to ACSM 2005, Asia Pacific multi-channel TV subscriber
homes grew by 7% year-on-year to reach 192.4 mil. by Y/E 2004, 34%
penetration of TVHH. MPA's analysis includes subscribers on cable,
DTH satellite, IPTV and UHF platforms.
By penetration, the leading markets were:
1. Korea (85%)
2. Taiwan (84%)
3. India (55%)
4. Hong Kong (50%)
By subscribers, the leading markets were:
1. China (105 mil.)
2. India (51.6 mil.)
3. Korea (14.6 mil.)
4. Japan (8.7 mil.)
5. Taiwan (5.5 mil.)
6. Australia (1.7 mil.)
7. Malaysia (1.5 mil.)
In terms of year-on-year growth, leading performers included:
1. Hong Kong (34%; IPTV, 135%; cable, 7%)
2. Malaysia (22%; solely comprised of DTH)
3. Korea (17%; DTH, 45%; cable, 14%)
4. Australia (14%; DTH, 15%; cable, 12%)
Tiered service subs grew by 13% in 2004 to reach 10.4 mil. (5%
of total multi-channel TV subs) while digital subs grew by 32% to
reach 10.8 mil, still only 2% of TVHH in the region and 6% penetration
of total multi-channel TV subs.
Digital satellite deployment remains robust, with DTH subs growing
by 19% in 2004 to reach 8.4 mil. In 2004, leading DTH markets included:
1. Japan (3.3 mil.)
2. Korea (1.6 mil.)
3. Malaysia (1.5 mil.)
4. Australia (0.89 mil.)
5. New Zealand (0.49 mil.)
6. Thailand (0.30 mil.)
Digital cable deployment was given a significant boost by expanded
rollouts in Australia and Japan but the overall pace remains slow
due to various commercial and regulatory issues in China, India,
Korea and Taiwan. Total digital cable subs grew by 119% in 2004
to reach 1.9 mil. subs.
Subscribers to expanded basic and/or premium TV channels in addition
to basic tier TV channels
Includes only individual fee paying residential DTH subs on CS124/128
and CS110 platforms
Includes only residential customers
Includes only residential customers
In 2004, leading digital cable subscriber markets included:
1. Hong Kong (700,000)
2. China (410,000)
3. Japan (320,000)
4. Australia (250,000)
The proliferation of broadband ADSL infrastructure has meant that
leading telecom providers have begun utilize ADSL and Ethernet networks
to deliver digital video services. The most notable exponents of
such services have been two broadband IPTV providers in Hong Kong,
which had acquired an aggregated 378,000 IPTV users as of Y/E 2004.
Similar deployments have begun in Taiwan and Japan but have yet
to match Hong Kong's success. Future IPTV deployments are expected
in China, India, Korea, Malaysia and Thailand.
Cable modem subs still trail ADSL in the region though growth was
relatively robust at 16% Y/Y in 2004 with total subs reaching 9.5
mil. Leading markets included:
1. Korea (4.3 mil.)
2. Japan (2.8 mil.)
3. China (0.94 mil.)
4. Taiwan (0.42 mil.)
Cable telephony subs grew by 32% in 2004 to reach 1.5 mil.. The
cable telephony market largely consists of circuit-switched users
in Japan (780,000) and Australia (500,000) but MPA expects cable
VOIP telephony deployments to accelerate in the future, driven by
rollouts throughout the region, including Greater China, Japan,
Korea and Singapore.
Total industry revenues grew by 14% in 2004 to reach US$18.6 bil.
Leading revenue generating markets included:
1. Japan (US$5.9 bil.)
2. China (US$3.5 bil.)
3. India (US$2.7 bil.)
4. Korea (US$2.3 bil.)
5. Taiwan (US$1.6 bil.)
6. Australia (US$1.1 bil.)
In 2004, multi-channel TV services (subscription and advertising)
contributed US$15.5 bil. (14% growth) in revenues; cable modem subscription,
US$2.8 bil. (12% growth); and cable telephony subscription, US$214
mil. (18% growth).
Multi-channel TV subscription revenue grew by 14% in 2004 to reach
US$12.8 bil. with Japan (US$4.2 bil.), China (US$2.5 bil.) and India
(US$2.0 bil.) remaining sector leaders, followed by Taiwan (US$1.1
bil.), Korea (US$975 mil.) and Australia (US$795 mil.). Net (local)
cable & satellite TV advertising grew by 13% in 2004 to reach
US$2.7 bil. C&S advertising remains driven by increasing viewership
and high penetration in major markets such as China (US$907 mil.);
India (US$644 mil.) and Taiwan (US$492 mil.) and the growing attractiveness
of leading cable & satellite TV channels in terrestrial TV-dominated
territories such as Korea, Australia, Hong Kong and Japan.
According to MPA estimates, the total revenue (including advertising
and subscription) pie for cable & satellite TV channels and
program suppliers in Asia grew by 12% in 2004 to US$5.6 bil. Excluding
Japan and Australia, the revenue pie grew by 17% to reach US$3.6
bil. with advertising contributing 67% to the revenue stream and
subscription representing 33%. In 2004, the leading markets for
pay TV channels and program suppliers in Asia were Japan (US$1.7
bil.); India (US$902 mil.); China (US$825 mil.) and Taiwan (US$399
mil.); with the remaining US$1.5 bil. largely derived from Australia
and Korea with Malaysia and Hong Kong leading the S.E. Asia region.
The value of content should increase over time as expenditure on
programming (movie and sports rights; turnaround channels; and internally-produced
channels) rises amid greater competition for TV consumers amongst
cable, satellite and broadband IPTV distributors.
2004 BROADBAND MULTI0CHANNEL TV DISTRIBUTOR & CHANNEL PERFORMANCE
REVIEW
In terms of revenue generation, the leading multi-channel TV related
(distribution and content-focused) companies in FY 2004 were:
1. J-COM Broadband/Japan (US$1,495 mil.)
2. Sky Perfect Communications/Japan (US$720 mil.)
3. Foxtel/Australia (US$581 mil.)
4. Jupiter Programming Co./Japan (US$518 mil.)
5. Astro All Asia Networks/Malaysia (US$455 mil.)
6. STAR Group/Regional (US$408 mil.)
7. Zee Telefilms/India (US$345 mil.)
8. Sky TV/New Zealand (US$304 mil.)
9. i-CABLE Communications/Hong Kong (US$298 mil.)
10. Austar United (US$297 mil.)
In terms of EBITDA or operating cash flow, the leading companies
in FY 2004 were:
1. J-COM Broadband/Japan (US$585 mil.)
2. Sky TV/ New Zealand (US$130 mil.)
3. Zee Telefilms/India (US$120 mil.)
4. Eastern Multimedia Co./Taiwan (US$115 mil.)
5. Astro All Asia Networks/Malaysia (US$105 mil.)
6. i-CABLE Communications/Hong Kong (US$104 mil.)
7. China Network Systems/Taiwan (US$103 mil.)
8. Sky Perfect Communications (US$90 mil.)
9. Taiwan Broadband Communications/Taiwan (US$85 mil.)
10. Jupiter Programming Co./Japan (US$83 mil.)
FUTURE PROJECTIONS
MPA forecasts indicate that total multi-channel pay TV subscriber
homes could grow from 192.4 mil. in 2004 to over 258 mil. by 2010
and 291 mil. by 2015, implying that multi-channel TV penetration
of total TV households will grow from 34% in 2004 to 39% by 2010
and 42% by 2015. MPA projections indicate that total digital pay
TV subs will grow from 10.8 mil. in 2004, to 48.5 mil. by 2010 and
67.4 mil. by 2015. This means that digital penetration of multi-channel
TV households could scale up to 23% by 2015, with digital pay TV
penetration of TV homes at 10%.
According to MPA, the market for cable modem services could grow
from 9.5 mil. subs in 2004, to 16.7 mil. subs by 2010 and almost
20 mil. subs by 2015. Cable telephony subs could grow from 1.5 mil.
in 2004 to just under 5 mil. by 2010 and over 7 mil. by 2015, driven
by increased VOIP deployments across the region.
Digital drivers include the continued success of deployments in
Australia and Japan plus further momentum in cable digitization
in China, Korea, Taiwan and, to a lesser extent, India. The demand
for digital DTH services will be substantially driven by the growth
of 2 satellite pay TV platforms in India and a significant increase
in Indonesia as two incumbents reposition services. DTH growth in
Korea, Malaysia, Japan, Australia, New Zealand and Thailand will
remain robust, though MPA expects subscriber growth to decelerate
in the long-term, with the focus more on delivering premium subscriber
growth with new channels and PVR-type services.
IPTV deployment over ADSL and Ethernet networks, should also drive
consumer demand for digital services in India, Hong Kong, and Japan,
and to a lesser extent, Taiwan and Korea.
All estimates to Fiscal Year End Dec. 2004 except Sky Perfect (Y/E
Mar. 2005); STAR Group (Y/E June 2004); Foxtel (Y/E June 2004);
Astro (Y/E Jan. 2005); Zee Telefilms (Y/E Mar. 2005); and Sky TV
(Y/E June 2004)
Includes Astro's pay TV services, radio broadcasting and movie library
(pay TV represents about 90% of turnover)
Consolidated estimates; excludes 50%-held ESPN-STAR Sports JV and
various stakes in cable systems
Includes India, Asia and Overseas operations
See note 4
MPA projections also show that video services will remain the core
revenue stream for the broadband pay TV industry. Total video revenues,
including subscription and advertising, will grow from US$15.5 bil.
in 2004, to just under US$30 bil. by 2010 and approaching US$40
bil. by 2015, contributing almost 90% to total industry revenues
over the long-term. Average monthly consumer spend on cable Internet
services will continue to decline amid more competition and greater
commoditization, though broadband service prices are expected to
stabilize in the long-term. Total cable modem subscription revenues
could grow from US$2.8 bil. in 2004 to US$4 bil. by 2010 and US$4.6
bil. by 2015, while cable telephony subscription could grow from
US$214 mil. in 2004 to US$485 mil. by 2010 and US$659 mil. by 2015
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The
Indian Scenario
India's broadband cable &
satellite TV industry, a US$2.7 bil. revenue opportunity in
2004, is in a state of flux as uncertainties surrounding market
regulation and competition in the delivery of video services
cloud visibility over the potential of one of Asia's most
attractive consumer blocks.
In the long-term, MPA believes
that market demand will spur competition to cable TV monopolies
and provide a foundation for the deployment of digital video
services. Such competition will likely obviate the need to
regulate the distribution of pay TV channels.
MPA forecasts indicate that total pay TV industry revenues
(subscription plus advertising) could grow from US$2.7 bil.
in 2004 to US$5.8 bil. by 2010 and US$8.6 bil. by 2015. We
see the value of pay TV distribution growing from US$2 bil.
in 2004 to US$4.7 bil. by 2010 and US$7.3 bil. by 2015.
We forecast cable & satellite TV advertising
to grow in line with nominal GDP with the revenue opportunity
projected at over US$1 bil. by 2010 versus US$644 mil. in
2004, growing to more than US$1.3 bil. by 2015.
Against the background of channel proliferation, rising program
costs (sports and movies, in particular), the increased commoditization
of content (that must provide regulation promises) and greater
competition between platforms (which DTH and broadband TV
promise), there will be growing consolidation in the channel
space with only the strongest surviving in a fragmented universe.
Channel economics, currently reliant
on advertising, will steadily improve as competition in the
delivery of video services increases with the rollout of new
digital platforms (DTH, IPTV and cable). We see TV channel
subscription revenues growing from US$270 mil. in 2004 to
US$1.1 bil. by 2010. and US$1.7 bil. by 2015, contributing
57% to revenues by 2015 versus 30% in 2004.
Our forecasts indicate that total multi-channel homes could
grow from 51.6 mil. in 2004 to just under 80 mil. by 2010
and almost 95 mil. by 2015. Cable's share of total video subs
will, MPA forecasts indicate, reduce to around 85% in the
long-term with DTH at 10% and broadband TV (IPTV) at 5%. We
model total digital video subs rising from 236,000 in 2004
to 10 mil. by 2010 and 15 mil. by 2015, fuelled by the expansion
of DTH and IPTV services. We see DTH as the primary digital
platform in the long term, acquiring more than a 65% share
of subs, followed by IPTV at under 25% and cable at 10%.
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Lavina Chulani
E-mail: lavina@media-partners-asia.com
About The Publisher
Based in Hong Kong, Media Partners Asia Ltd (MPA) is a leading
publishing and research company dedicated to independent analysis
of Asia's media & communications industries through a variety
of platforms including publishing, research, consulting and conferences.
Its leading publications include a fortnightly newsletter (Media
Route 26) and a quarterly magazine (The Asia Media Journal). Media
Route 26 is Asia's leading research and analysis-based newsletter
for media investors and executives. The Asia Media Journal (AMJ)
is Asia's leading media-focused magazine with exclusive and authoritative
analysis of the companies and individuals that shape media development
across Asia.
MPA also publishes annual research reports and databooks focused
on Asia's media industries. These publications contain extensive
market and sector profiles, incorporating analysis of major media
distributors in Asia with exclusive MPA data and forecasts. MPA's
reports include the ASIA PACIFIC CABLE & SATELLITE MARKETS SERIES,
which includes 4 comprehensive research reports published annually
since 2001; KOREA'S BROADBAND PAY TV OPPORTUNITY (2004); SUNRISE
OR SUNDOWN: THE IMPACT OF CAS ON INDIA'S MEDIA & ENTERTAINMENT
ECONOMY (2003); CURRENT ISSUES IN TAIWAN'S CABLE TELEVISION SECTOR
(2003); and CHINA'S CABLE TV OPPORTUNITY (2002).
MPA also undertakes specialized consulting projects on the behalf
of regional and global media, financial and technology companies.
Sectors of expertise include advertising, broadcasting, broadband,
cable & satellite TV, interactive multimedia, print media and
regulatory practices. Services include: advisory reports; policy-making
reports; custom-made sector and market reports; fair market appraisals;
and expert witness testimony.
Additionally, MPA organizes conferences, focusing on a variety
of sectors within the media industry. Such events explore critical
business issues, evaluate future market trends and provide unique
networking opportunities for media distributors, vendors and financiers.
Since 2001, MPA has organized six major broadband cable television
conferences in partnership with local cable TV associations, including
THE MPA-ACBN TAIWAN CABLE TV SUMMIT 2001 (October 2001), THE MPA-KCTA
KOREA CABLE TV FORUM 2002 (May 2002) and THE MPA-CBIT TAIWAN CABLE
TV SUMMIT 2002 (September 2002), THE MPA-KCTA KOREA CABLE TV FORUM
2003 (March 2003), THE MPA-CBIT TAIWAN CABLE TV SUMMIT 2003 (September
2003) and the MPA-KCTA KOREA CABLE TV FORUM 2004 (March 2004).
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