Asia-Pac C&S growth slows to 9%: MPA

NEW DELHI: The overall basic cable & satellite TV subscriber growth rate slowed down to 9 per cent year on year (Y/Y) in 2003 in the Asia-Pacific region, but India, along with Korea, Malaysia and New Zealand registered a double-digit subscriber growth, according to an international research report.

The rate of growth of C&S subscribers may shown signs of flagging in 2003 (178.8 million subscribers by yearend 2003, signifying 32 per cent penetration of TV households), the leading markets by penetration were Taiwan (83%), Korea (73%) and India (54%). 

The total number of C&S subscribers is expected to grow to 234 million by 2008 and 283 million by 2015, the soon-to-be released report , Asia-Pacific Cable & Satellite Markets 2004 (ACSM), prepared by the Hong Kong-based Media Partners Asia Ltd. (MPA) stated.

However, MPA feels that the slow down in the growth rate is a sign of "maturity" of the industries after almost a decade and a half in Asia with deployment of digital set-top boxes (STBs) and tiered services gradually increasing. These trends could accelerate over the next decade, the report has indicated. 

Commenting on the report's findings, MPA director of content & research, Vivek Couto, said, "As basic subscriber growth slows, operators need to build up new revenue streams through an economic tiering of expanded basic and premium programming services and the rollout of video-on-demand, high definition TV and personal video recorder-type services."

According to Couto, most major pay TV markets and operators have begun to overcome the burden of network, programming and technology costs, boosted by consolidation, stronger regional currencies and greater access to capital. "However, regional markets and cable operators, in particular (as opposed to digital satellite and ADSL video platforms), remain restricted by the effects of regulation, which continues to impact the development of a viable digital pay TV franchise, an increase in tiered service penetration, and the rollout of set-top boxes to combat piracy, build addressability and reduce profit leakage," he added.

Some of the highlights of the ACSM 2004 are as follows: 

- Taiwan, Korea and India remain highest penetrated C&S markets.


- Digital C&S subscribers reach 7.9 million, signifying, 25 per cent Y/Y growth, driven by DTH satellite.

- Digital cable subscribers reach 756,000 as regulatory roadblocks impact volume-led deployment.


- Broadband penetration increases as cable modem subscribers top 9 million, signifying a 27 per cent Y/Y growth. 

- Total industry revenues grow by 17 per cent to reach US$15.9 billion. 

- C&S TV subscription revenues up 18 per cent to reach US$11.2 billion. 

- Net (local) C&S TV advertising up 12 per cent to US$2.2 billion. 

Couto added, "Critical to ACSM 2004's revenue and subscriber forecasts is greater deregulation, which may occur in the long term. In the medium term, MPA believes that the inevitability of market demand will drive digital and tiered service subscriber penetration in the region, particularly as equipment prices continue to decline and consumer demand continues to increase."

The development of tiers and new services along with growth (albeit, at a reduced rate) in basic tier subscribers could increase total C&S industry revenues (video, voice and data subscription and advertising) from US$15.9 billion in 2003 to US$26.8 billion by 2008 and US$37.2 billion by 2015, according to forecasts from MPA.

Doing a crystal ball gazing, MPA predicts that tiered service subscribers and digital penetration are poised to grow exponentially as market demand would increase, equipment prices fall, premium and pay TV content availability becomes greater, and regulatory roadblocks ease.

The MPA reports further states that digital C&S subscribers is estimated to touch the 29.5 million mark by 2008 and over 54 million by 2015.

However, the overall regional trend in 2003 was that basic subscriber additions were trending downward, while tiered service subscriber additions were gradually increasing and on the cusp of exponential future growth, driven by greater digital deployment. 

Here are some other highlights of the MPA research report.

By subscribers, the leading markets were: 

1. China (100 mil.) 

2. India (47.7 mil.) 

3. Korea (11.9 mil.) 

4. Japan (8.1 mil.) 

5. Taiwan (5.3 mil.) 

6. Australia (1.5 mil.) 

7. Malaysia (1.2 mil.) 

In terms of year-on-year growth, leading performers included digital DTH satellite platforms in: 

1. Korea (109%) 

2. Malaysia (26%) 

3. New Zealand (16%) 

Cable TV platforms in: 

1. Korea (45%) 

2. India (11%) 

Digital satellite deployment remains robust, with DTH subscribers growing by 20 per cent in 2003 to reach 7.1 million, driven by platforms in: 

1. Japan (3.1 mil.) 

2. Malaysia (1.2 mil.) 

3. Korea (1.1 mil.) 

4. Australia (807,000) 

5. New Zealand (453,000) 

6. Thailand (298,000) 

Digital cable deployment remains slow, largely held up by regulatory issues. Total digital cable subscribers grew by 123 per cent in 2003 to reach 756,000 subscribers, driven by Hong Kong (400,000) and China (201,000).

Broadband cable penetration continues to gradually increase as consumer prices and equipment costs decline. Cable modem subscribers still heavily trail ADSL in the region and saw annualized growth almost halved from 52 per cent in 2002 to 27 per cent in 2003 with total subscribers reaching 9.1 million, driven by Korea (4.6 mil.) and Japan (2.5 mil.)

Total industry revenues grew by 17 per cent in 2003 to reach US$15.9 billion, led by Japan (US$5 bn.), China (US$2.9 bn.) and India (US$2.5 bn.) 

In 2003, video or TV-based services (subscription and advertising) contributed US$13.4 billion (17 per cent growth) in revenues; cable modem subscription US$2.4 billion (21 per cent growth); and cable telephony subscription US$171 million (24 per cent growth).

Cable & satellite TV subscription revenue grew by 18 per cent in 2003 to reach US$11.2 billion, while net (local) cable & satellite TV advertising grew by 12 per cent in 2003 to reach US$2.2 billion. C&S advertising remains driven by increasing viewership and high penetration in major markets such as Taiwan, India and China.

In terms of revenue generation, the top 10 leading cable & satellite related (distribution and content-focused) companies in FY 2003 (all estimates to fiscal year ended Dec. 2003) included J-COM Broadband/Japan    (US$1,210 mil.), Sky Perfect Communications/Japan (US$687 mil.), Foxtel/Australia (US$466 mil.) and Star Group/Regional (US$ 292 mil), which was mainly derived from India, Taiwan and China. India's home grown Zee Telefilms occupied the No. 8 slot with revenues of US$ 267 million.

The voluminous ACSM 2004 is a 400-page report in its entirety with profiles of six industry sectors, 12 segments, 13 markets and up to 50 cable, DTH & ADSL operators, together with comprehensive data and forecasts from 2000 - 2015, plus detailed listings of leading industry players.

Based in Hong Kong, MPA is a leading publishing and research company dedicated to comprehensive and independent analysis of Asia's media & communications industries through a variety of platforms. MPA publishes a fortnightly newsletter (Media Route 26) and a quarterly magazine (The Asia Media Journal).

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