MPA forecasts Asia Pacific online video opportunity at US$35 billion by 2021

MUMBAI: According to a report by Media Partners Asia (MPA), Asia Pacific online video revenue is expected to reach US$35 billion by 2021, an average annual growth of 22 per cent from US$13 billion in 2016.

China will remain the largest market, accounting for 76 per cent of Asia Pacific online video revenue by 2021. Japan, Australia, Korea and India will also be significant, in aggregate accounting for 17 per cent of regional online video revenue by 2021. 

The report, entitled Asia Pacific Online Video Distribution, covers 14 markets, tracking the growth of advertising and subscription-based online video, as well as mobile and fixed broadband.

Commenting on the report findings, MPA executive director Vivek Couto said, “The growth of broadband, combined with slow but progressive change in content licensing, is driving demand for online video services. However, the distribution of driver local content online is modest, especially outside of China, India and Korea. This is evident in Southeast Asia, where broadband penetration is growing rapidly but from a low base in most markets. Telecom operators in these markets are investing in broadband networks and integrating with online video platforms to help drive subscriptions. This allows online video operators to utilize carrier billing, overcoming market limitations in payment infrastructure. It’s a bet to drive online video consumption in the short term and ARPUs in the long term.”

Online video advertising accounted for less than 15 per cent of Asia Pacific digital ad spend in 2015. This share will grow to 22 per cent by 2021. Online video ad sales will reach approximately US$22 billion by 2021 versus US$9 billion in 2016, a 19 per cent CAGR. China will represent more than 70 per cent of the online video advertising pie by 2021.

In the online subscription video-on-demand (SVOD) segment, MPA expects total paying customers to grow from 177 million by 2016 to 360 million by 2021, with China contributing the majority. SVOD revenue will reach US$13 billion by 2021, a 28 per cent CAGR from US$3.7 billion in 2016.

China will again contribute the majority, representing more than 80 per cent by 2021. The Southeast Asia SVOD opportunity will grow rapidly but from a low base, representing about US$200 million in revenue by 2021.

Asia Pacific fixed broadband subs will reach 345 million in 2016, and grow to 425 million by 2021. Average broadband household penetration will grow from 35 per cent in 2016 to 41 percent in 2021. Mobile broadband will reach 79 per cent of the Asia Pacific population by 2021, versus 46 per cent in 2016.

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