The Business of Broadcast & Media
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The Business of Broadcast & Media Global Trends – Focus on APAC Peter White, IABM CEO Asia-Pacific TV distribution - Forecast Number of TV households in APAC region expected to increase from about 900 million in 2018 to 970 million in 2024 • APAC’s Pay-TV sector is vibrant, with both subscribers APAC TV households by distribution platform (million) (+68 million) and revenues (+US$ 2.35 billion) forecast to rise during the next 5 years, while the 2018 2019 2024 growth will be slower-than-expected due to many 350 cable subscribers in China converting to OTT • China and India combined will account for 80% of 300 APAC’s roughly 680 million Pay-TV subscribers by 2024 250 • IPTV (subscription-based services provided by e.g. telecom operators) is expected to grow significantly 200 adding over 80 million subscribers between 2018 and 2024, rising to 272 million 150 • The majority of IPTV growth in the APAC region will 100 originate from China with an additional 40 million Million households subscribers by 2024, followed by India with about 30 50 million new subscribers • Digital cable subscriptions will be flat overall, and 0 China is expected to lose 25 million cable subscribers Analog Analog Digital cable Pay satellite FTA satellite Pay IPTV Pay DTT FTA DTT between 2018 and 2024 terrestrial cable TV TV TV TV TV Source: Digital TV Research, IABM @THEIABM www.theiabm.org IABM Copyright 2019 Global Pay-TV market maturing due to growth of OTT Top countries by number of Pay-TV subscribers US Pay-TV subscribers by platform (million) (million) Analog cable TV Digital cable TV Pay IPTV Pay satellite TV 2017 2023 120 Pay-TV penetration continues to decline in the US due to the 400 China (33%) and India (16%) combined are forecast to high costs related to Pay-TV subscriptions vs. OTT services. have nearly half of the world’s total Pay-TV subscribers by 100 350 2023. The US will be the biggest loser in terms of Pay-TV 300 subscribers, going down by 10 million subscribers. 80 250 60 200 150 Million subscribers Million subscribers 40 100 50 20 0 China India USA Russia Germany Japan Mexico South Brazil 0 Korea 2010 2017 2023 Source: Digital TV Research, IABM @THEIABM www.theiabm.org IABM Copyright 2019 Asia-Pacific Pay-TV market by country China and India combined will account for 80% of APAC’s Pay-TV subscribers by 2024 APAC Pay-TV subscribers by country (000s) APAC Pay-TV penetration rate of TV households Total: ~630 million 2018 2017 New Zealand 2018 Singapore Hong Kong (of China) Australia Malaysia Total: ~ 610 million Total average: 57% Philippines Indonesia 2017 Thailand Taiwan (of China) Vietnam 0 100,000 200,000 300,000 400,000 500,000 600,000 Japan China India South Korea Japan South Korea Vietnam Taiwan (of China) Thailand Indonesia India Philippines Malaysia Australia Hong Kong (of China) China Singapore New Zealand 0% 20% 40% 60% 80% 100% 120% Source: Asia Video Industry Association (AVIA), Media Partners Asia (MPA) @THEIABM www.theiabm.org IABM Copyright 2019 Growth of IPTV in Asia-Pacific - Forecast IPTV expected to be the fastest growing multichannel platform in APAC • Asia-Pacific region is the world’s third-largest IPTV economy after North Number of TV households in APAC with a Pay-IPTV America and Western Europe, with China Telecom being the largest subscription (2018-2024*) IPTV operator globally by subscriber base 300 • In APAC, other major IPTV providers include KT Corporation 272 (South Korea) and Sky Perfect JSAT Corporation (Japan) • China alone accounts for about 80% of all IPTV households in the APAC 250 region, thanks to China Telecom’s fast expansion over the past few 217 years 200 189 • In terms of IPTV subscription revenue, South Korea leads with US$2.3 billion (2017), followed by Japan’s US$1.4 billion and China’s US$1.2 billion 150 • In 2017, China had APAC’s lowest IPTV ARPU (average revenue per user) at US$0.92 per month because China Telecom and 100 China Unicom have both marketed IPTV as a promo service add- on to fixed broadband services. In comparison, IPTV ARPU was Number of TV households highest in New Zealand at US$49.24 50 • Many governments (e.g. Australia, New Zealand, Singapore, Malaysia) are funding fiber rollouts to support the IPTV market in the long term 0 2018 2019* 2024* Source: Digital TV Research, Asia Video Industry Association (AVIA) @THEIABM www.theiabm.org IABM Copyright 2019 Trends in Asia-Pacific Pay-TV market APAC’s Pay-TV industry is currently in the midst of transformation Emergence of online video platforms (home and mobile broadband, IPTV/OTT): Pay-TV operators launching their own SVOD services, rolling out Android set-top-boxes (STB) and shifting to IP-based distribution and STB integration with OTT operators. Pure direct-to-home (DTH) satellite segment declining: DTH satellite operators struggle, while bundled service operators with IPTV and high speed internet continue to grow in countries such as Indonesia, Malaysia and India where customers are shifting to packages with broadband and OTT. Increasing investment in online video content: Premium entertainment and sports growing at a significant pace. Emergence of telcos as content distributors and aggregators of video services: Telcos actively investing in video content, distribution, e-commerce and gaming across Asia-Pacific. Source: Asia Video Industry Association (AVIA) @THEIABM www.theiabm.org IABM Copyright 2019 Asia-Pacific OTT market continues to boom OTT TV and video revenues by country in APAC Legal SVOD OTT penetration per capita in APAC (US$ million, 2018-2024*) (2018) 30,000 40% 35% APAC region has some of the highest rates of 25,000 video piracy in the world. For example, th 30% Singapore ranks 9 in the world for the most number of visits to piracy sites per capita, 20,000 according to Asia Video Industry Association’s 25% study. 15,000 20% US$ millionUS$ 15% 10,000 OTT penetration/capita (%) penetration/capita OTT 10% 5,000 5% 0 0% China Japan South Australia India Others Korea 2018 2019* 2024* Source: Digital TV Research, Media Partners Asia (MPA) @THEIABM www.theiabm.org IABM Copyright 2019 Internet economy – China vs. US Internet Mobile internet Mobile payment 802 million users 778 million users 650 million users (57.7% of total (98.3% of total (46% of total population) internet users) population) Population: 1.42 billion 262 million 55 275 million million users (89%) users (95.3%) users (20.2%) Population: 327 million Source: US Census Bureau, CNNIC, Statista @THEIABM www.theiabm.org IABM Copyright 2019 Technology mix horizon – China, India and US Technology mix - China Technology mix - India Technology mix - US 2G 3G 4G 5G 2G 3G 4G 5G 2G 3G 4G 5G 2025 2025 2025 2017 2017 2017 Source: GSMA 2018. Note: Share of mobile connections by technology @THEIABM www.theiabm.org IABM Copyright 2019 AI technology pioneers including US, China, Israel and UK US leading AI development, but China catching up Number of AI startups by country in 2018 AI market size in China - Growth forecast 1,600 (2015-2020, US$ billion) 16 1,400 1,393 14.3 1,200 14 1,000 12 10.2 800 10 600 8 Number of of startups Number 383 362 400 Billion US$ 6.2 245 6 200 131 113 109 106 82 55 45 42 39 35 28 27 26 26 22 19 4 3.4 0 2.1 1.6 Italy India 2 Israel Spain Brazil China Japan Russia France Finland Canada Sweden Australia Germany Singapore Switzerland South Korea Netherlands 0 United States United United Kingdom 2015 2016 2017 2018 2019 2020 Sources: Roland Berger, CMN, CISTP @THEIABM www.theiabm.org IABM Copyright 2019 The Chinese government promoting AI Baidu, Alibaba, Tencent and iFlyTek the driving forces behind China’s AI advancement Source: SCMP @THEIABM www.theiabm.org IABM Copyright 2019 4K/UHD adoption globally China continues to lead in 4K/UHD adoption 4K TV shipments forecast by region (2015-2020) 50,000 Nearly 100 million 4K/UHD • China will continue to dominate the 4K/UHD TV market, with 42% of all TV sets were sold in 2018, 45,000 TVs in 2017 shipped with 4K panels. By 2020, 4K TV shipments in China and the number is expected are expected to reach 44 million units – the same as North America to double by 2022. 40,000 and Western Europe combined Better visual experience, • In the US, the adoption of 4K/UHD is driven by Pay-TV operators 35,000 availability of 4K content, differentiating their offerings and terrestrial broadcasters who are affordable pricing of 4K sets increasingly adopting the new ATSC 3.0 standard. In South Korea, the 30,000 driving demand globally. adoption of ATSC 3.0 has catalyzed 4K/UHD adoption at terrestrial 25,000 broadcasters OTT operators such as Netflix and Amazon already offer 4K/UHD 20,000 • Shipments (000s) content in several countries 15,000 • China will dominate 8K shipments as its early-adopting consumers are seeking new features and as pricing of 8K sets becomes more 10,000 affordable 5,000 • While Japan is planning 8K broadcasts from 2020, currently shipments in Japan remain constrained by consumer preferences for screen sizes - too small to support even 4K 2015 2016 2017 2018 2019 2020 • In 2018, the FIFA World Cup and the Wimbledon tennis championships China North America were covered in 4K/UHD Western Europe APAC (excl. China, Japan) Latin America Eastern Europe Middle East and Africa Japan Source: IBC365, IHS Markit @THEIABM www.theiabm.org IABM Copyright 2019 In January 2019, China successfully carried out Latest 4K/UHD initiatives in China its first test of 4K UHD video transmission using CCTV China launched 4K channel at the end of 2018 5G-based network In October 2018, China In December 2018,