Asia Pacific pay TV to be worth more than USD40 billion by 2014

New research, recently published by Informa Telecoms & Media, shows that 44% of TV homes in the Asia Pacific region will receive digital signals in 2014, up from just 17% at the end of 2008. The 13th edition of Informa’s Asia Pacific TV report shows that China will account for more than half of the region’s digital total by 2014.In terms of revenues, the pay TV market will undergo a more than seven-fold increase in value, to be worth more than $40 billion by 2014. This will be assisted by the rise of triple-play bundles, from both IPTV and cable, which are starting to have a major impact on the sector, particularly as a customer retention tool.

Top 3 markets – Digital TV households (000):

                    2008  % of total     2014  % of total
                 -------  ----------  -------  ----------
China             47,933          44  163,517          51
India             18,417          17   61,794          19
Japan             20,653          19   37,233          12
Rest of region    21,374          20   57,522          18
                 -------  ----------  -------  ----------
  Total          108,377         100  320,066         100

Source: Informa Telecoms & Media

Adam Thomas, Media Research Manager and author of the report, says: The IPTV players are changing their emphasis away from competing head-on with the other premium pay TV services. Instead they are looking for any way to gain scale. If this means a low-cost or even free strategy, then so be it. Informa’s forecasts indicate that by 2014, only 34% of IPTV subscribers will be standalone TV subscribers, with the other 66% taking bundles with broadband or telephony. For cable, triple-play will be a little less pervasive, with 70% of TV subscribers standalone and the other 30% taking bundles.

Thomas added: Longer term the IPTV operators hope to use this scale to up-sell to more expensive packages and services. We expect this to have some success, with blended ARPU rising. But we also see the TV component of ARPU going down, as cable and satellite cut prices to remain competitive. The telcos are well-placed to see through this strategy. According to Thomas: Most of them have deep pockets and are not desperate for a quick profit. They can afford to target low-ARPU second-sets for now, all the time gaining a presence in the home that could see them clean up in the long term.