Asia Pacific to add 400 million digital TV homes

Asia Pacific is undergoing a digital TV boom that will see penetration increase from 29% in 2010 to 73% in 2016 – or up by nearly 400 million homes, according to a new report from Digital TV Research. Fast-growth economies, higher disposable incomes and rising populations will lead this expansion. Digital TV Asia Pacific calculated that these factors will also result in 92 million more TV households between 2010 and 2016.

Report author Simon Murray said: “China and India have a massive influence over the region, due mainly to their 1 billion-plus populations. Together, they will have 608 million TV households (73% of the region’s total) by 2016. They will provide 467 million digital TV homes combined – or 77% of Asia Pacific’s total.”

“Although China and India dominate the region, several other large countries, especially Indonesia, Pakistan, the Philippines, Thailand and Vietnam, have underdeveloped TV markets. By 2016, these five countries will have 127 million TV households combined, but only 38% digital penetration and 24% pay TV penetration.”

Asia Pacific TV households by platform (mil.)

                     2010  2011  2012  2013  2014  2015  2016
                    ----- ----- ----- ----- ----- ----- -----
Digital cable subs  110.6 135.3 165.0 202.8 240.2 270.8 298.9
Analog cable subs   205.5 197.4 169.6 134.8 101.0  80.2  59.0
Pay IPTV subs        13.2  29.8  43.9  58.5  71.9  84.8  98.4
Pay DTH              36.7  42.0  48.5  53.2  57.3  61.5  65.5
Digital free DTH     34.0  38.9  42.3  45.0  47.5  49.7  51.6
Analog terrestrial  318.1 283.0 262.1 239.2 218.1 191.4 167.8
Primary FTA DTT      23.7  30.5  40.7  53.5  66.1  79.4  92.2
                    ----- ----- ----- ----- ----- ----- -----
Total               741.8 756.9 772.0 787.2 802.4 817.9 833.4

Source: Digital TV Research Ltd

Despite the rapid conversion, digital TV will still have plenty of room for growth for some time to come. By 2016, Indonesia and the Philippines will still have analog penetration of 85% and 79%, respectively. China will have 83 million analog homes and India 58 million.

Of the 388 million digital homes to be added between 2010 and 2016, 68 million will come from DTT. Digital cable will contribute a further 188 million and pay DTH 29 million, with pay IPTV supplying a further 85 million.

So pay TV penetration will rise from 49% in 2010 to 63% in 2016, adding 156 million subs to take the total to 522 million. China will provide 296 million pay TV households, with India supplying a further 133 million. However, pay TV penetration will be higher in South Korea (91%) and Hong Kong (85%). Legitimate pay TV penetration will be lowest in Indonesia (7%), with the Philippines and Thailand the next lowest, with 23% each.

Asia Pacific pay TV revenues by platform (US$ million)

                    2006    2011    2016
                  ------  ------  ------
Digital cable TV   1,871   7,111  17,337
Analog cable TV   13,007  12,209   4,209
IPTV                 134   1,125   5,363
DTH                4,756   6,450  10,336
                  ------  ------  ------
Total             19,768  26,895  37,252

Source: Digital TV Research Ltd

Pay TV revenues in Asia Pacific will be US$16.5 billion higher in 2016 (US$37.3 billion total) than in 2010. Japan (US$9.9 billion) will remain market leader in 2016, followed by China (US$8.5 billion) and India (US$7.8 billion). However, pay TV revenues will be flat in Australia, Hong Kong, Singapore and South Korea.

Murray added: “Cable TV will remain the highest earner, though its revenues will remain flat at US$21 billion during the forecast period. Digital cable TV revenues will climb by US$10.2 billion between 2010 and 2016 to US$17.3 billion, with analog cable TV falling from US$12.2 billion to US$4.2 billion.”

There will be 358 million cable homes by 2016, up only 42 million from 316 million at end-2010. Cable penetration will be 43.0% by 2016, almost unchanged from 42.6% at end-2010.

Murray said: “The good news for cable operators is that the number of digital subs will nearly triple over the same period to nearly 300 million, though the analog total will fall to a third of its 2010 total.”

Digital cable penetration will be highest in China (52%), Singapore (47%) and South Korea (43%) by 2016. China and India will together supply 88% of the total digital subs.

Although the total is falling rapidly, there will still be 59 million analog cable subs (7.1% of TV households) by 2016. About 38% of Taiwan’s TV households will still receive analog cable signals by 2016, with Pakistan on 27%. India will still have 41 million analog cable subs in 2016.

The number of homes paying for IPTV will take off from a low base to reach nearly 100 million by 2016 – or 11.8% of TV households. IPTV penetration will be highest in Hong Kong and Singapore in 2016, at 38% and 36% respectively. China will contribute 70 million IPTV subs by 2016. IPTV revenues will climb to US$5.4 billion by 2016, up from only US$1.1 billion in 2010. China and Japan will each supply US$1.6 billion to the 2016 total.

IPTV subs will overtake pay DTH ones in 2013. Nearly 30 million pay DTH homes will be added between 2010 and 2016, taking the total to 66 million (or 7.9% of TV households). India (45 million – or two-thirds of the regional total) will be the largest country by DTH subscribers, but penetration will be higher in Malaysia (40%) and New Zealand (39%). India will generate US$3.2 billion of the region’s US$10.3 billion DTH revenues in 2016. The number of free DTH homes will reach 52 million by 2016, up from 34 million in 2010.

After a slow start, DTT is taking off. Primary DTT households (homes not subscribing to cable, DTH or IPTV but taking DTT) will rocket from 24 million (3.2% penetration) at end-2010 to 92 million (11.1%) by 2016. China will provide 52 million of the 2016 total, followed by Japan with 12 million. However, penetration will be higher in Australia (66%) and Malaysia (31%).

Analog terrestrial signals will still be received in 20% of TV households (168 million) by 2016, though this is well down on 43% (318 million) at end-2010. In fact, analog terrestrial penetration will still be very high in Indonesia (85%) and the Philippines (71%) in 2016. China will have 83 million ATT homes at end-2016, with India supplying a further 41 million.