SVoD surges in Asia Pacific

Total online video revenues in Asia Pacific are projected to reach US$54.5bn by 2025, with SVoD services contributing to over half of that total.

Vivek Couto

The prediction is made in Asia Pacific Online Video & Broadband Distribution 2021, a report published today by research and consulting service Media Partners Asia (MPA).

SVoD is booming in Asia Pacific and grew by 34% in 2020 to US$16.3bn in revenues, with China contributing 58% of this, according to the report.

Excluding China, the Asia Pacific SVoD sector grew revenues by 47% to US$6.8bn in 2020 and SVoD revenue is projected to reach US$15.3bn in the region, excluding China, by 2025 and US$31.3bn with China.

Meanwhile, weak advertiser demand resulted in Asia Pacific online advertising video-on-demand (AVoD) revenues declining by 3% in 2020 to US$14.2bn.

However, the outlook for AVoD is improving with a recovery evident in China, India, Korea and Southeast Asia, according to MPA. Asia Pacific AVoD revenues are set to expand by 13% to US$16.1bn in 2021 and grow to US$23.2bn by 2025.

Total online video revenues are projected to grow to reach US$54.5bn by 2025, with SVoD contributing 57% and AVoD 43%.

Thirteen OTT operators accounted for more than 70% of total online video revenue in Asia Pacific in 2020, including Tencent, ByteDance, Netflix, Amazon, Disney, iQiyi, UNext, Nine, Wavve and PCCW Media.

MPA executive director Vivek Couto said: “During 2020, the Covid-19 pandemic created a work-from-home environment that scaled the adoption of online services, including SVoD.

“The average number of SVoD services subscribed to by customers outside of China grew through 2020, reaching 3.8 in Australia and Japan and 2.8 in markets such as India and South-East Asia.

“While subscriber growth will decelerate in 2021 and the production of new content will remain impacted in the first half of 2021, the scale and velocity of investment in premium content should ensure that net new customer additions will remain robust over the medium term.

“Moreover, profitability should grow more rapidly than revenues and subscribers as online businesses scale. This is particularly true in larger markets such as Australia, China, Japan and Korea.”

Couto added: “In the emerging markets of India and Southeast Asia, the landscape for SVoD is promising but is still being shaped because of growing competitive intensity with increased investment in content and distribution.

“The future will also see more distribution deals with mobile, fixed broadband, pay TV and smart TV operators to drive consumption and payment on small and big screens. Evolving regulations may impact content creation and investment as governments look to introduce censorship and impose content quotas.”