August 2017

Online video market in Asia set to skyrocket over next five years

Revenues from online videos, comprising advertising and subscription fees, is expected to grow at a 21 percent compound annual rate in Asia between 2017 and 2022.

In a report titled “Asia Online Video & Broadband Distribution”, independent consulting and research provider Media Partners Asia (MPA) forecasts that the online video market in Asia will expand nearly threefold over the next five years, climbing to more than US$46 billion in 2022 from US$17.6 billion today. Despite a huge increase in global streaming providers, MPA expects different business models to co-exist with local operators expected to survive based on a continued need for local content.

Over half of the overall revenue will come from China, forecasts MPA. The agency expects advertising on Chinese video platforms to hit US$13 billion by 2022, while subscription fees are expected to reach US$17.3 billion during the same period. The figure is significantly higher than China’s theatrical movie sector, which was worth US$6.4 billion in 2016.

The reasons for the success of the Chinese online video market are manifold. The country has a weak market for traditional pay-TV, huge sums have been invested in original content, and infrastructure improvements have meant widespread adoption of smart TVs and set-top boxes.

"Access to local and Asian content is increasingly essential in almost all markets, while demand for recent windows for franchise-based Hollywood product is also robust," says MPA executive director Vivek Couto. "Content curation, packaging, and pricing remain critical, along with brand equity."

In smaller territories such as Thailand and Malaysia, the uptake of premium video content is balanced by corporation between OTT operators and local telcos.

Paul Poole (South East Asia) Co., Ltd. is an independent marketing consultancy based in Bangkok, Thailand specialising in commercial sponsorship and partnership marketing, working with both rights holders and brands - acting as a catalyst by bringing them together and maximising the relationship.

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