Pay-TV revenue to touch $30 bn in Asia: Casbaa

MUMBAI: The Cable and Satellite Broadcasting Association of Asia (Casbaa) has announced that pay-TV in Asia has reached the tipping point of 50 per cent penetration of all Asian TV homes. This development opens the door to growth in ad revenues over the next five years.

According to Asia Pacific pay-TV industry research carried out by Casbaa, pay-TV services now connect with almost 363 million homes in Asia, surpassing the US where pay-TV reaches 121 million.
Pay-TV penetration varies dramatically across the region. South Korea with 99 per cent has the highest penetration while Indonesia with penetration of three per cent of TV homes has the lowest.

Growth in the pay-TV industry is primarily driven by India (75 per cent penetration of all TV homes) and China (48 per cent) but Pakistan, Thailand and Vietnam are contributing significantly to this growth.

Nevertheless, in terms of revenues earned, pay-TV in Asia continues to lag behind North America and Western Europe in both penetration and revenues. According to data firm SNL Kagan, in North America pay-TV reaches 87.7 per cent of households and generated $102.50 billion in revenues in 2010, while Western Europe enjoys penetration of 61.9 per cent and revenues of $41.04 billion.  
In 2010 pay-TV in Asia will generate a little over $30 billion from its 50 per cent penetration rate.

Casbaa CEO Simon Twiston Davies says, “Asia now leads the world in multichannel TV connections, with growth only expected to accelerate. With more than 50 per cent penetration across the region and the lion‘s share of the high net worth audience, subscription TV is more attractive than ever to subscribers, advertisers and investors”.

According to an annual piracy survey by Casbaa and Standard Chartered Bank, over $2 billion will have been lost to piracy this year. Casbaa noted that this loss, while high, does not include revenues lost to internet piracy.

Revenues lost through piracy damage not just pay-TV operators, but also regional governments. Research undertaken by PwC reveals that at least $262 million is lost annually from government coffers. This includes lost corporate profits tax in 2010 of $195 million and VAT/GST of $67 million.

According to Casbaa, governments worst hit by piracy include Thailand, Pakistan and the Philippines, which in 2010 will have lost $87 million, $63 million, and $38 million respectively.

Despite these hurdles, the increasing digitisation of pay-TV in Asia combined with the ongoing commitment from governments, regulators, operators and content providers to eradicate piracy, continues to have a positive impact across the region as the industry continues on its upward course.

“Technology works. In Hong Kong we have seen a dramatic fall in revenue leakage to $1.09 million in the past year. In India, while some regulatory weaknesses leave a huge hole in the industry revenue flow, the government is benefiting from a new will to collect entertainment and business taxes on more than 25 million digital pay-TV subscriptions. Improving digital roll-outs in the Philippines are helping our industry “hold the line” in terms of revenue losses to individuals stealing from the pay-TV operators. An increasing recognition that intellectual property rights enforcement can benefit the entire value chain is gradually taking hold in markets where domestic content has been damaged by theft. The next big challenge for pay-TV operators and providers of all kinds will be to monetize “the massive on-line opportunity,” said Davies.

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