The Asia-Pacific region is now the largest contributor to growth of the global online video industry, a major new study published Monday finds.
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 covers the AVOD and SVOD sectors and spans China, India, Australasia, Southeast Asia as well as South Korea and Japan, shows the overall industry on course to grow by 16% in the current year to $49.2 billion. SVOD will contribute 50%; user-generated content-driven ad-supported VOD 37%; and premium AVOD, 13%.
The industry is to grow at an 8% compound average growth rate to reach $72.7 billion in 2027, with the mix of SVOD and AVOD little 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. Indeed, China has three companies in the top five by revenue. MPA ranks the five largest as: Bytedance, YouTube, Tencent Video, 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 notes.
Within China, two long-form platforms Tencent Video and iQIYI, and two short-form video players ByteDance and Kuaishou lead. 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 forecast to grow at an annual 5% to 2027 with revenues in excess of $30 billion, or 42% of the APAC total. However, China’s video market is “insular and largely closed to international streamers.”
Outside of China, YouTube, Netflix, Disney and Amazon Prime Video have almost 50% of online video revenue in the region. 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.”
Japan and Korea are key markets, both for industry growth and for content. Both countries offer high average revenue per customer (ARPU) and high advertising rates (CPM), yet online video penetration is far behind Australia or the U.S. Households penetration is 49% for Japan and 42% for Korea. After China, Japan is the region’s largest OTT market by revenue, generating $9.7 billion in 2022. It is forecast to grow to $14.7 billion by 2027.
India’s streaming video market is “in its second growth phase,” according to the report, with total revenues of $3 billion in 2022. That figure is forecast to more than double to almost $7 billion by 2027. MPA says competition between global giants and newly capitalized local players, in India is set to grow still further. 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.
In the SVOD category in Asia-Pacific, Netflix, Disney and Amazon are the market leaders.Outside of China, Netflix this year is forecast to have 33% of the SVOD revenue pie (down from 35% in 2021); Amazon Prime Video, 12%; and Disney+ (including Disney+ Hotstar) at 11%.
“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,” the report says.
Prime Video leads the Japan SVOD category while also growing rapidly in India. It is now set to expand in key Southeast Asia markets from the fourth quarter of 2022.
Successful locally-owned platforms are emerging in Australia, Indonesia, Japan, and Korea. “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,” the report says. “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. But the report forecasts consolidation in the Korean market, where it this month announced that Seezn 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.
The report includes half a dozen thematic analyses.
- The availability of high-quality local content online with travelability is growing, led by Korea, Japan, China, India, Thailand and Taiwan;
- Premium sports rights (especially soccer and cricket) are transitioning online in markets such as Australia, India, Indonesia, Korea, Singapore and Thailand;
- Businesses with models focused on revenue growth are increasingly switching to “more rational models, anchored to monetizable reach through telcos and organic, direct customer funnels”;
- Content inflation remains a challenge, especially India, Japan, Korea and increasingly, Thailand.
- Online piracy levels are also “alarmingly high” in markets such as India and across Southeast Asia;
- Growing incomes and a rising middle class has helped drive affordability in emerging markets but micro ARPU rural and second third-tier regions are likely to grow in importance, especially in India and Indonesia.