“The Asia Pacific video industry continues to experience a secular shift from TV to online in terms of engagement and monetization,” highlighted a report released by research and analysis company Media Partners Asia Research Services (MPA) on Wednesday. Among the key data points, the firm estimated that the video industry in the region grew by 5.5 percent in 2023 to hit $145 billion in revenue, driven by a 13 percent jump in “online video sector sales to $57 billion, partially offset by less than 1 percent growth in the TV revenue pie to $98 billion.”
The report analyzed free-to-air TV, pay TV, subscription VOD, premium advertising VOD and user-generated content (UGC)/social video advertising in 14 Asia Pacific markets.
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“China remains the largest and most regulated video market, generating $64 billion in revenue in 2023,” it found. “Ex-China, the largest markets in 2023 are Japan ($32 billion), India ($13 billion), Korea ($12 billion) and Australia ($9.5 billion) followed by Taiwan and Indonesia, both at around $3 billion.”
Excluding China, Asia Pacific (APAC) video industry revenue increased by 3.2 percent in 2023 to $81 billion. That was driven by a 13 percent gain in online video sales to $30 billion, partially offset by a 2 percent drop in TV revenue to $51 billion.
Online streaming VOD grew 15 percent in 2023 across the region to reach $28 billion in revenue, but excluding China, the gain amounted only to 12 percent to $12 billion. In comparison, APAC advertising VOD (AVOD) revenue increased 11 percent to $29 billion, or 13 percent to $17 billion when excluding China. UGC/social video “continues to dominate the AVOD category with 80 percent share, while premium AVOD had 20 percent share in 2023,” MPA said.
Pay-TV subscription revenue showed marginal declines when excluding China, including revenue declines in such big markets as India and Japan. In addition, “almost every market in Southeast Asia contracted,” MPA highlighted. “Pay-TV advertising grew in India but was decimated in Korea. Free TV advertising was down 2 percent in 2023 across APAC excluding China, with significant declines in Australia, Indonesia and Korea.”
China will hold back growth in the years ahead though, according to the latest estimates. MPA projected that total APAC video industry revenue will grow at a compound annual growth rate (CAGR) of 2.6 percent between 2023 and 2028 to reach $165 billion, or at a CAGR of 3.3 percent when excluding China to $95 billion. “The APAC online video sector is projected to grow at 6.7 percent CAGR to reach $78.5 billion in value by 2028, or at 9.2 percent CAGR to $46 billion in APAC excluding China,” the report noted.
Advertising contributed 51 percent to the region’s online video revenue in 2023 (or 58 percent when excluding China), but its contribution is projected to grow to 54 percent by 2028 (or to 63 percent when excluding China), according to the MPA projections.
“Improved connectivity, rising connected TV (CTV) penetration combined with the growth of local creator economies, investment in premium local content as well as the wide availability of premium sports streaming, will continue to drive dollars and eyeballs online,” said MPA managing & executive director Vivek Couto.
“Clear beneficiaries in the digital video economy include global and local technology and media companies investing in product and content with consumers at the forefront of their strategies,” he also highlighted. “According to MPA, eight companies had an aggregate 65 percent share of the APAC online video revenue pie in 2023: Amazon Prime Video, ByteDance (including TikTok), Disney, Google-owned YouTube, iQIYI, Meta (video), Netflix and Tencent.”
Among sector giants, Netflix has in recent years made headlines with such Asian content as Korean hit series Squid Game, reality TV show Physical: 100 and feature film Kill Boksoon. It is now setting its eyes on bringing that winning formula to its Japanese content slate. Disney+ has just announced that Parasite‘s Song Kang-ho will star in Uncle Samsik, an ambitious period drama from Korean writer-director Shin Yeon-shick. And Amazon Prime Video is expected to unveil its largest Japan slate to date this year, while Warner Bros. Discovery’s Max will take subscribers back into Tokyo’s neon-lit back alleys with season 2 of the big-budget drama thriller Tokyo Vice.
But it is not all about global streaming giants in the APAC region. Excluding China, Couto noted that “certain local players are competing successfully and have scale potential, including Jio Cinema and Zee-Sony in India, Foxtel’s Kayo and Nine’s SVOD and broadcaster VOD (BVOD) platforms in Australia, TVer and U-Next in Japan, Tving in Korea, Vidio in Indonesia, and Viu across Southeast Asia.”
New investments by strategic players and private equity firms in the online video sector in China, India, Indonesia, Japan, Korea and Southeast Asia are helping local and regional companies compete, the expert also argued. His conclusion: “The online video sector is also starting to rationalize with price increases in the SVOD category along with disciplined content and marketing investment, the introduction of ad tiers, new strategies to drive monetization and the start of local market consolidation in Korea, Japan and India.”
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