Asia Pacific MULTICHANNEL TV ADVERTISING

2016 P 186C P 287C P Pro.Blue C CMYK CMYK CMYK 0/100/95/5 100/75/0/10 80/10/0/20 RGB RGB RGB 224/20/38 0/60/141 0/136/198 About CASBAA CASBAA is the Asia Pacific region’s largest non-profit media association, serving the multi-channel audio-visual content creation and distribution industry. Established in 1991, CASBAA has grown with the industry to include digital multichannel television, content, platforms, advertising, and video delivery. Encompassing some 515 million connections within a footprint across the region, CASBAA works to be the authoritative voice for multichannel TV; promoting even-handed and market- friendly regulation, IP protection and revenue growth for subscription and advertising, while promoting global best practices. For more information, visit www.casbaa.com 505

www.casbaa.com

CASBAA Executive Office million 802 Wilson House 19-27 Wyndham Street MULTICHANNEL HOMES Central, Hong Kong Tel: 852 2854 9913 Enquiry: [email protected] CAN’T BE WRONG. www.casbaa.com

2 3 Executive Summary

Globally, there are many factors at work monetization, as advertisers shift in reshaping the Pay TV ecosystem, their spending to online. Initiatives including developments in technology, to improve pay TV measurement in changing consumer expectations, the region are critical, as data-driven a proliferation of new content, and media buying increasingly dominates continually shifting advertising the market. New tools are being dynamics. developed to help add contours to the Contents data landscape, but these will require The digital revolution is a decade old collaboration among industry players now, and while many Asian markets in order to be seen by advertisers and are still lagging in fixed and wireless agencies as credible. broadband deployments, audiences in FAST FACTS ...... 6 the region are nonetheless following Times of change are often difficult, and GLOBAL OVERVIEW ...... 10 global trends. Increasingly, they do not that is certainly the case in Asia’s pay really distinguish between digital and TV industry today. But by embracing ASIA PACIFIC VIEWERS ...... 20 traditional media; what they want is innovation and developing customer- flexibility and choice in how and when centric strategies, we at CASBAA are MEASUREMENT GUIDE ...... 28 they consume the content they want. confident our industry can ride out whatever turbulence happens to come COUNTRY OVERVIEW ...... 34 This is certainly a new Golden Age for our way. TV, with more and better programming ADVERTISING REVENUE ...... 43 being produced than ever before, both internationally and locally. Risks MAKING WAVES WITH OTT ...... 63 are being taken, boundaries pushed, ADVERTISING REGULATIONS ...... 83 and innovation explored, with the very positive consequence that consumer demand is fuelled, and the pace of change is further accelerating.

But even with subscription TV’s continued growth in the region, there are still challenges, particularly around

CASBAA would like to thank Jane Buckthought, the CASBAA Research Committee and the various networks and research companies who made this report possible.

4 MULTICHANNEL TV 2016 5 Non-Terrestrial TV 30% JAPAN Connections 99% 15.2 MILLION SOUTH KOREA 59% 24.7 MILLION CHINA 54% 265.8 MILLION PAKISTAN 11.9 MILLION 84% 97% 61% HONG KONG TAIWAN of homes in Asia 92% 2 MILLION 7.9 MILLION now receive INDIA 149.9 MILLION Multichannel TV. 29% % THAILAND 62 VIETNAM 6.9 MILLION 20% 13.2 MILLION PHILIPPINES 3.3 MILLION 62% MALAYSIA 4.2 MILLION FAST FACTS 62% 11% SINGAPORE INDONESIA POPULATION...... 3,615,467,000 0.95 MILLION 4.6 MILLION TOTAL HOMES...... 946,444,560 HOUSEHOLD SIZE...... 3.8 TELEVISION HOMES...... 834,535,058 MULTICHANNEL HOMES...... 505,548,304 INTERNET USERS...... 1,320,205,943

36% AUSTRALIA 3 MILLION 56% NEW ZEALAND 1. Percent of multchannel homes 2. Millions of connections 0.9 MILLION 3. Thailand government regulations have clarified penetration

6 MULTICHANNEL TV 2016 FAST FACTS 7 Growth of Multichannel Homes

2015 505

2014 501

2013 468

2012 446

2011 407

2010 363

2009 326

2008 291

2007 264

2006 255

2005 228

2004 218

2003 186

2002 181

Millions of homes

Source: Casbaa, MPA, SNL Kagan, Nielsen, Kantar, GfK,, CSM, TAM India, SKY, Gallup Pakistan, Starhub, Astra, Astro, Video 8 Research, TmNS, OzTam, SARFT MULTICHANNEL TV 2016 9 ASIA-PACIFIC PAY TV OUTLOOK: Making growth waves

The multichannel industry in the Asia-Pacific region is Multichannel TV Homes Penetration 2016 positioned for another year of growth, according to SNL 568,461,514 Kagan analysis.

Aggregate pay TV subscribers from a total of 46 territories are projected to reach 539.5 million by the end of 2015, penetrating 62.9% of TV households in the region. Multichannel video subscription revenue is estimated to reach $36.2 billion by the end of 2015, translating to an average $5.59 in monthly video service ARPU. Over the next ten years, our model indicates the pay TV population in the region is estimated to grow to 777.6 million, generating $74.3 billion in video subscription revenue and an ARPU of $7.96 per month. 112,959,346 111,734,228 94,656,383 77,887,133 Cable remains the most common multichannel platform in the region, accounting 35,357,934 for an estimated 75.9% of total subscribers and 64.8% of total revenue by the end of 2015. While cable’s dominance is expected to last, its share of pay TV subscribers and revenue is projected to decline with each passing year as digital direct-to- ASIA PACIFIC N. AMERICA W. EUROPE E. EUROPE LATIN AMERICA MIDDLE EAST home and IPTV operators ramp up. By the end of 2015, DTH and IPTV platforms are AND CARIBBEAN AND AFRICA anticipated to grab 12.7% and 11.2%, respectively, of Asia Pacific’s pay TV customers and 20.0% and 15.1%, respectively, of pay TV subscription revenue. Pay-digital India is the single largest DTH satellite multichannel market in the Asia-Pacific region, terrestrial television holds a niche position in the region with just 0.1% of subscribers with an estimated active subscriber base of 45.1 million by the end of 2015, out of and revenue. The platform is only available in a handful of markets for pay TV 68.6 million subscribers for the region. Its six licensed operators, namely Dish TV delivery, namely Cambodia, Indonesia, Laos, Myanmar, New Zealand and Vietnam India Ltd., Tata Sky Ltd., Videocon d2h, Sun Direct, Bharti Airtel Ltd. and Reliance Communications Ltd., are all among the largest DTH providers in the region. DTH is With 255 million cable TV households in China and 102 million in India in 2015, the the most expensive multichannel platform in the region at an average monthly ARPU two markets collectively hold a majority share of Asia Pacific’s cable TV subscribers. of $9.21 in 2015, compared to $4.86 for cable, $8.09 for IPTV and $6.60 for pay-DTT, Regionwide, the cable platform is making aggressive digitization headway, with according to SNL Kagan analysis. However, DTH ARPU for the Indian market remains 68.4% of subscribers anticipated to be on a digital connection by the end of 2015. relatively low at just $3.07 per month. DTH is the dominant multichannel platform in Over the coming ten years, our analysis indicates the cable digitization rate will grow Australia, Indonesia, Malaysia and New Zealand. to 93.7%, although it remains a long-term challenge for all markets in the region to have fully digitized cable infrastructure. In markets such as Bangladesh, India, the Philippines and Thailand, market fragmentation is expected to impede digital upgrades due to localized ownership of last-mile networks. Consolidation of local small operators into large-scale MSOs is therefore called for to facilitate digitization initiatives. In China, for instance, regional cable systems are implementing a government-mandated “one province, one network” directive, which has formed some of the biggest cable operations in the world.

10 MULTICHANNEL TV 2016 GLOBAL OVERVIEW 11 GLOBAL OVERVIEW Asia-Pacific pay tv summary

ASIA-PACIFIC REGIONAL UNITS 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2015 - 2025 CAGR

Population (000) 3,771,608 3,803,650 3,835,233 3,866,983 3,897,986 3,929,075 3,959,208 3,989,518 4,019,109 4,049,936 4,080,297 0.8%

HH (000) 1,035,070 1,055,297 1,073,854 1,094,184 1,113,670 1,135,353 1,155,993 1,175,643 1,197,357 1,218,498 1,238,531 1.8%

TVHH (000) 858,128 882,718 906,662 931,372 955,987 982,486 1,008,799 1,034,953 1,063,262 1,091,771 1,119,721 2.7%

DTH Universe

Total DTH Subs (000) 68,646 74,574 80,592 86,342 91,884 97,417 102,854 108,266 113,584 118,882 124,136 6.1%

Total DTH Revenue ($ mil) 7,231.41 7,786.92 8,351.03 8,966.97 9,598.17 10,272.63 11,021.31 11,841.34 12,714.92 13,605.54 14,558.37 7.2%

DTH ARPU $ 9.21 9.06 8.97 8.95 8.98 9.04 9.17 9.35 9.55 9.75 9.98 0.8%

Cable Universe

Analog Cable Subs (000) 129,588 112,452 100,291 87,701 79,562 70,839 61,995 53,324 45,550 39,050 34,312 -12.4%

Digital Cable Subs (000) 280,055 312,868 341,488 369,365 392,194 414,070 435,402 457,336 477,245 495,033 509,891 6.2%

Basic Cable Subs (000) 409,643 425,319 441,779 457,065 471,757 484,909 497,397 510,660 522,795 534,083 544,204 2.9%

% Cable Subs Taking % 68.4% 73.6% 77.3% 80.8% 83.1% 85.4% 87.5% 89.6% 91.3% 92.7% 93.7% 3.2% Digital

Total Cable Revenue ($ mil) 23,433.89 25,322.81 27,214.15 29,123.46 31,054.24 32,958.82 34,993.30 37,169.37 39,529.63 42,066.31 44,563.51 6.6%

Blended video service $ 4.86 5.05 5.23 5.40 5.57 5.74 5.94 6.15 6.37 6.63 6.89 3.5% ARPU

Digital Terrestrial Universe

Pay DTT HH (000) 747 932 1,098 1,246 1,374 1,496 1,615 1,718 1,819 1,903 1,971 10.2%

Pay DTT Revenue ($ mil.) 52.06 68.33 84.66 100.22 114.98 129.42 143.97 158.25 172.57 186.34 198.89 14.3%

Pay DTT ARPU $ 6.60 6.78 6.95 7.13 7.31 7.51 7.71 7.91 8.13 8.34 8.56 2.6%

Source: SNL Kagan

12 MULTICHANNEL TV 2016 GLOBAL OVERVIEW 13 GLOBAL OVERVIEW Asia-Pacific pay tv summary

ASIA-PACIFIC REGIONAL UNITS 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2015 - 2025 CAGR

IPTV Universe

IPTV Subs (000) 60,451 67,636 74,103 79,874 84,958 89,503 93,625 97,505 100,847 104,130 107,271 5.9%

IPTV Revenue ($ mil.) 5,458.91 6,356.60 7,228.17 8,125.61 9,016.80 9,932.03 10,857.28 11,817.28 12,813.20 13,855.28 14,959.84 10.6%

IPTV ARPU $ 8.09 8.27 8.50 8.80 9.12 9.49 9.88 10.30 10.77 11.27 11.79 3.8%

Total Multichannel HH (000) 539,487 568,462 597,573 624,527 649,973 673,326 695,491 718,149 739,046 758,998 777,582 3.7% Subs

DTH Share of % 12.7% 13.1% 13.5% 13.8% 14.1% 14.5% 14.8% 15.1% 15.4% 15.7% 16.0% 2.3% Multichannel HH

Cable Share of % 75.9% 74.8% 73.9% 73.2% 72.6% 72.0% 71.5% 71.1% 70.7% 70.4% 70.0% -0.8% Multichannel HH

DTT Share of Multichannel % 0.1% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.3% 0.3% 6.2% HH

IPTV Share of % 11.2% 11.9% 12.4% 12.8% 13.1% 13.3% 13.5% 13.6% 13.6% 13.7% 13.8% 2.1% Multichannel HH

Subscriber Share Total % 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 0.0%

Total Multichannel ($ mil) 36,176.27 39,534.66 42,878.01 46,316.26 49,784.19 53,292.90 57,015.86 60,986.24 65,230.33 69,713.47 74,280.61 7.5% Revenue

DTH Share of % 20.0% 19.7% 19.5% 19.4% 19.3% 19.3% 19.3% 19.4% 19.5% 19.5% 19.6% -0.2% Multichannel Revenue

Cable Share of % 64.8% 64.1% 63.5% 62.9% 62.4% 61.8% 61.4% 60.9% 60.6% 60.3% 60.0% -0.8% Multichannel Revenue

DTT Share of Multichannel % 0.1% 0.2% 0.2% 0.2% 0.2% 0.2% 0.3% 0.3% 0.3% 0.3% 0.3% 6.4% Revenue

IPTV Share of Multichannel % 15.1% 16.1% 16.9% 17.5% 18.1% 18.6% 19.0% 19.4% 19.6% 19.9% 20.1% 2.9% Revenue

Revenue Share Total % 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 0.0%

Source: SNL Kagan 14 MULTICHANNEL TV 2016 GLOBAL OVERVIEW 15 GLOBAL OVERVIEW Asia-Pacific Leads the Way

IPTV MARKET SUMMARY Total Multichannel TV Homes 2015-2019 700 IPTV should have more than 60 million subscribers across Asia-Pacific markets by the end of 2015, but is still in nascent stages of development in many territories as 600 telecom providers strive to roll out advanced services over DSL or fiber networks. In terms of customer base, China leads the charge in the region with 39.5 million 500 subscribers estimated for 2015, nearly two-thirds of the regional total, and China 400 Telecom is by far the largest multichannel operator in the world with 36.8 million IPTV connections. Yet IPTV services in China are still regarded as an add-on option 300 for fixed-broadband package bundles, with limited content and a lack of advanced features, yielding just $4.15 in monthly subscription ARPU. Well-established IPTV MILLIONS 200 operations are available from mature markets, including Japan, South Korea and 100 Taiwan, with top players such as KT Corp., NTT Group (NTT Plala Inc.) and Chunghwa Telecom Co. Ltd. Governments in Australia, New Zealand and Singapore are funding 0 fiber rollouts, which are expected to foster the IPTV landscape. 2015 2016 2017 2018 2019 ASIA PACIFIC EASTERN EUROPE LATIN AMERICA & CARIBBEAN Multiscreen TV Everywhere and over-the-top initiatives are aggressively pursued MIDDLE EAST & AFRICA NORTH AMERICA WESTERN EUROPE by leading pay TV operators in the Asia-Pacific region. As of August 2015, our survey indicates 26 operators from 13 markets have rolled out TV Everywhere/ OTT services, with wide-ranging linear and on-demand content delivered most Share Of Multichannel TV Homes by Region 2016 commonly through PCs, smartphones and tablets. While the earliest TV Everywhere deployments date back to the October 2009 launch by Australian DTH and

cable incumbent FOXTEL, the majority of multiscreen platforms only started to W.EUROPE emerge within the past three years, especially in developing markets. In terms 11% of content access, many operators are not just offering a pay TV extension with free authenticated streaming, but are also targeting non-subscribers by charging N. AMERICA 11% MIDDLE EAST an additional fee for watching select programming without having to take a ASIA PACIFIC & AFRICA multichannel package. 57% 4%

LATIN AMERICA AND CARIBBEAN 8%

E.EUROPE 9%

Global Multichannel Markets is a service of SNL Kagan, a division of SNL Financial LC. Source: SNL Kagan

16 MULTICHANNEL TV 2016 GLOBAL OVERVIEW 17 GLOBAL OVERVIEW Asia-Pacific Leads the Way—TV Everywhere CONNECTED DEVICE SUPPORTING TV EVERYWHERE SERVICE

COUNTRY OPERATOR PLATFORM TVE LAUNCH SMART SMARTPHONE TABLET GAME PC/MAC DEVICE # OF TV CHANNELS DATE TV CONSOLE COMPATIBILITY SCORES

Australia FOXTEL DTH/Cable Oct-09 yes yes yes yes yes 5 up to 74 channels South Korea CJ HelloVision Cable May-10 yes yes no no yes 4 199 channels Japan NTT Plala Inc. IPTV Aug-11 yes yes no no yes 4 N/A Singapore StarHub Ltd Cable Jun-12 yes yes no no yes 4 up to 71 channels Taiwan Vee Telecom Multimedia Cable Oct-12 yes yes yes yes yes 4 N/A Japan SKY Perfect JSAT Corporation DTH/IPTV Oct-11 yes yes no no yes 4 59 channels Hong Kong PCCW IPTV Dec-09 yes yes yes yes yes 4 6 channels Thailand TOT IPTV Jan-13 yes yes no no yes 4 145 channels Taiwan Chunghwa Telecom IPTV Dec-09 yes yes no no yes 3 N/A New Zealand SKY Network Television Ltd DTH Jan-11 yes yes no no yes 3 up to 11 channels South Korea KT Corporation DTH/IPTV Apr-11 yes yes no no yes 3 70 channels Japan J:COM Cable May-12 yes yes no no yes 3 up to 77 channels Singapore SingTel IPTV Jul-12 yes yes no no no 3 up to 19 channels Malaysia Astro DTH/IPTV Jun-12 yes yes no no yes 3 up to 30 channels Thailand TrueVisions DTH/Cable May-13 yes yes no no yes 3 up to 102 channels China Beijing Gehua Cable Jun-11 yes yes no no yes 3 up to 46 channels India Dish TV India Ltd. DTH Oct-13 yes yes no no yes 3 27 channels India Tata Sky Ltd. DTH Oct-13 yes yes no no yes 3 54 channels Malaysia Telekom Malaysia IPTV Jul-13 yes yes no no yes 3 up to 57 channels Indonesia First Media Cable Feb-14 yes yes no no yes 3 50 channels Indonesia PT MNC Sky Vision DTH Jun-14 yes yes no no yes 3 N/A Philippines Cignal TV DTH Jul-13 yes yes no no no 2 up to 14 channels Australia FetchTV IPTV Dec-13 yes yes no no no 2 N/A India Videocon d2h DTH Jul-15 yes yes no no no 2 70 channels India Bharti Airtel DTH Mar-14 no no no no no 1 Hong Kong i-Cable Communications Cable Feb-12 yes no no no no 1 Total 25 7 25 23 3 20

Service penetration by device platform 27% 100% 92% 12% 77%

18 19 MULTICHANNEL TV 2016 Source: SNL Kagan GLOBAL OVERVIEW THE MULTICHANNEL TV VIEWER IN ASIA

• Across Asia Pacific, viewing of multi-channel TV services are measured by People Asia Pacific Average Audience: All Time meter TV. Audiences continue to grow each year and 80% of all people watch in s s ALL PEOPLE (000 ) AFFLUENT PEOPLE (00014156) a month. 36151 33506 13090 11840 • Multichannel TV average audience continues to grow and outpace viewing of 29544 terrestrial channels which are seeing a continuing decline. 14156 36151 33506 13090 The Ipsos Affluent Survey shows that multi-channel TV audiences in the main 16389 11840 • 29544 15887 14793 cities in Asia are more likely to be more affluent, early adopters, purchase more 4035 3784 3823 consumer items, travel more and keep up-to-date with new trends. 16389 15887 14793 Asia Pacific Monthly Cumulative Audience 2012 2013 2014 20124035 20133784 20143823 ALL PEOPLE 80% 79% 75% 73% 80% 2012 2013 2014 2012 2013 2014 79% 80% 78% 77% 78% 75% 73% 80% 78% 77% 75% 78% 76% 68% 75% 66% 76% 68% Asia Pacific Average Audience: Prime Time 66% ALL PEOPLE (000s) AFFLUENT PEOPLE (000s)

2009 2010 2011 2012 2013 2014 67832 64163 27275 57261 25706 2009 2010 2011 2012 2013 86%2014 23443 Asia Pacific Monthly Cumulative Audience85% AFFLUENT PEOPLE 85% 67832 86% 74% 86% 72% 64163 85% 34929 33941 27275 85% 76% 57261 31369 25706 80% 85% 83% 82% 86%73% 74% 72% 23443 9186 8927 85% 76% 8739 80% 83% 82% 73% 34929 33941 31369 9186 2012 2013 2014 2012 20138927 20148739

MULTICHANNEL TV TERRESTRIAL TV 2012 2013 2014 2012 2013 2014

2009 2010 2011 2012 2013 2014 Prime Time 1800-2359 MULTICHANNEL TV TERRESTRIAL TV 2009 2010 2011 2012 2013 2014 Source: Peoplemeter, Asia Pacific includes: India, Taiwan, Malaysia, Singapore, Philippines, Hong Kong, New Zealand, South MULTICHANNEL TV TERRESTRIAL TV Korea, Australia (some overlap of metro and urban data) All people universe 446,813,395; Affluent universe 170,951,684 MULTICHANNEL TV TERRESTRIAL TV

20 ASIA PACIFIC VIEWERS 21 Multichannel TV Monthly Reach Affluent Viewers Strongly Agree That...

INDIA AUSTRALIA TAIWAN INDEX WATCH DON’T WATCH 95% 96% 33% 33% 100% 100% PAY TV PAY TV I am always one of the first to use 114 70 innovative tech products MALAYSIA SINGAPORE PHILIPPINES I have confidence in purchasing products/ 112 87 65% 74% 51% 52% 20% 39% services that have been advertised

I tend to go for premium rather than HONG KONG NEW ZEALAND SOUTH KOREA 110 86 standard goods/services 38% 44% 53% 58% 87% 87% I have expensive tastes 111 89

ALL PEOPLE AFFLUENT ADULTS Gaining knowledge and becoming better 105 91 Source: Peoplemeter India. Australia (metro), Taiwan, Malaysia, Singapore, informed is a priority for me Philippines, Hong Kong, New Zealand, South Korea People come to me for advice before 110 75 buying new things Multichannel TV Consumed More Than Other Media

(MONTHLY) ANY CABLE/SATELLITE TV CHANNEL 82.1 (WEEKLY) ANY CABLE/SATELLITE TV 77.2 (DAILY) ANY CABLE/SATELLITE TV 54.6 ANY INFLIGHT MAGAZINE 9.6 ANY REGIONAL MONTHLY MAGAZINE 18.3 ANY REGIONAL TRI-WEEKLY MAGAZINE 1.7 ANY REGIONAL WEEKLY MAGAZINE 7.3 ANY REGIONAL DAILY NEWSPAPER 2.8 ANY REGIONAL TITLE 22

MULTICHANNEL TV OTHER MEDIA

Source: Ipsos Affluent Survey Asia Pacific Q1-Q4 2014 Source: Ipsos Affluent Survey Asia Pacific Q1-Q4 2014 Average Base Index: 100. Bangkok or Hong Kong or Jakarta or Kuala Lumpur or Manila or Singapore or Taipei or Seoul or Bangkok • Hong Kong • Jakarta • Kuala Lumpur • Manila • Singapore • Taipei • Seoul • Sydney • Melbourne • India Sydney or Melbourne or India. Viewed Pay TV Yesterday or Not Viewed International Channels in past month

22 MULTICHANNEL TV 2016 ASIA PACIFIC VIEWERS 23 Affluent Viewers Are Early Adopters...... and Decision Makers...

WATCH PAY TV DON’T WATCH PAY TV WATCH PAY TV DON’T WATCH PAY TV (INDEX) (INDEX) (INDEX) (INDEX)

102 92 106 85 SMARTPHONE CAR OWNER

104 93 106 81

TABLET OWN PLATINUM/BLACK CREDIT CARD

111 76 102 80

SMART TV BUSINESS DECISION MAKER

115 75 104 79 HOME THEATRE SOUND SYSTEM TOP MANAGER

106 87 102 99

DIGITAL VIDEO CAMERA HOUSEHOLD MONTHLY INCOME US $15,000+

Source: Ipsos Affluent Survey Asia Pacific Q1-Q4 2014 Average Base Index: 100. Bangkok or Hong Kong or Jakarta or Kuala Lumpur or Manila or Singapore or Taipei or Seoul or Sydney or Melbourne or India. Viewed Pay TV Yesterday or Not Viewed International Channels in past month

24 MULTICHANNEL TV 2016 ASIA PACIFIC VIEWERS 25 ...and Travelers Too.

WATCH PAY TV DON’T WATCH PAY TV (INDEX) (INDEX)

120 49 TAKE A BUSINESS TRIP IN PAST 12 MONTHS

140 28

6+ BUSINESS TRIPS IN PAST 12 MONTHS

128 46

FLY 1ST OR BUSINESS CLASS

110 74 12+ NIGHTS IN A HOTEL IN PAST 12 MONTHS

121 62

3+ LEISURE TRIPS IN PAST 12 MONTHS

Source: Ipsos Affluent Survey Asia Pacific Q1-Q4 2014 Average Base Index: 100. Bangkok or Hong Kong or Jakarta or Kuala Lumpur or Manila or Singapore or Taipei or Seoul or Sydney or Melbourne or India Viewed Pay TV Yesterday or Not Viewed International Channels in past month.

26 MULTICHANNEL TV 2016 27 TV Audience Measurement 2015-2016

COMMERCIAL COMMERCIAL CABLE/ BREAK RATINGS SPOT LOGS PAY TV REACH TABLETS, PEOPLEMETER PANEL SIZE (HOMES/ SATELLITE DTT FOR PAY TV FOR PAY TV & FREQUENCY SMARTPHONES, COUNTRY RESEARCH COMPANY HOUSEHOLDS) PANEL COVERAGE MEASURED MEASURED CHANNELS CHANNELS AVAILABLE SOFTWARE INTERNET Australia Nielsen TAM on behalf 3,500 (Metropolitan), Metro areas (5 cities) & nationally Yes Yes No No Yes User choice* No of OzTAM 1,413 (National subscription TV) for Subscription TV Australia Nielsen TAM on behalf 2,135 (Regional) Queensland, Northern NSW, Yes Yes No No Yes User choice* No of Regional TAM Southern NSW, Victoria, Tasmania & Regional Western Australia Bangladesh MRB Bangladesh 550 Homes, 2200 individals Dhaka Metro, Dhaka Other Yes No Yes Yes Yes Media XPress No Urban, Dhaka Rural, Chittagong Metro and Chittagong Rural Cambodia Kantar Media 795 Diaries Phnom Penh, Siem Riep & Yes Yes Yes Yes Yes Infosys+ No Battambang China CSM 34,175 National 1 / Provincial 25 / Yes Yes No No Yes Infosys+ Yes City 138 Hong Kong Nielsen 800 HK Region Yes Yes No No Yes for Arianna Yes - Laptop/ subscribers Desktop Hong Kong CSM Media Research 2,000 (Return Path Data Panel) HK Region; Now TV subscriber Now TV No No Yes Yes InfoSys+ Yes - & Eye base channels only device India TAM Media Research 11,100 Homes, 12,200 Urban India (including LC1 Yes No Yes Yes Yes MediaX*Press No PeopleMeters Towns) India BARC 22,000 Homes, 25,000 Bar-O- All India (Urban + Rural) Yes Yes Yes Yes Yes BMW No Meters Indonesia Nielsen 2,273 (Terrestrial), 300 (Pay TV) Terrestrial: 11 cities, Yes No No No Yes Arianna No Pay TV: Greater Jakarta Japan Video Research Ltd 6,600 National panel & separate Tokyo & Osaka Yes No No No Yes RVCS No Subscription TV Panel 600 * Malaysia Nielsen 1,100 TV households in Across 11 states in Peninsular Only Astro No Yes, 29 Yes, 29 channels Yes Arianna Plan for digital Peninsular Malaysia Malaysia, covering both urban PayTV, not channels ad ratings and rural NJOI (Free (DAR) Q4 Sat) 2015 - website browser only Malaysia Kantar Media 2,700 homes at present, aim Across all 13 states in Peninsular Yes (Astro No Yes all channels Yes all channels Yes Infosys+ Planned 5,000 by Y/E 2015. Return Path & East Malaysia, covering Urban PayTV and integration of Data panel representing Astro & Rural NJOI) Astro On The subscriber base. Go viewing in Q4 2015 New Zealand Nielsen 600 National Yes Yes Yes Yes Yes Arianna No Pakistan Medialogic Pakistan 1000+ HH ,6000+ Individuals Top 20 Cities Incl. 3 Metros Yes N/A Yes (80 Yes (80 Yes InfoSys+ No channels) channels) (Kantar) Pakistan Gallup Pakistan National Panel: 2,500 HH , 3500 National (Urban+Rural) Yes N/A Yes Yes Yes Reporter No Individuals (2,000 Urban HH & 500 Rural HH)* Philippines Nielsen National Panel 3,500. National (Urban+Rural) Yes No Yes Yes Yes Arianna Launch of DAR (2,000 Urban homes (NUTAM) Q3 2015 and 1,500 Rural homes (RTAM)

28 MULTICHANNEL TV 2016 MEASUREMENT GUIDE 29 TV Audience Measurement 2015-2016

Survey Notes: (Seoul, Incheon, Busan, Gwangju, Daejeon, Daegu, Ulsan, Gyungi Province, Kangwon Province, North Chungcheong Province, South Chungcheong Province, North Gyeongsang Province, South Gyeongsang Province, North Jeolla Province, South Jeolla Province, Jeju Australia,OzTAM: Peoplemeter. 5 City Metro Markets: Sydney, Melbourne, Brisbane, Adelaide & Perth & nationally for Subscription TV. Island) Japan,Video Research Ltd: Peoplemeters in Tokyo & Osaka.Non-continuous measurement,2 week sweeps conducted every two months (12 weeks/year). Subscription TV panel is separate from national terrestrial TV panel of 6,600 homes, 52 weeks reporting /year Vietnam,Kantarmedia : People meter & Diary, 1 National diary panel, 3 cities diary panel: Danang, Hai Phong & Nha Trang, 3 People meter cities: HCMC, Hanoi and Can Tho. Please contact the research company for a comprehensive report on measurement. Pakistan,Medialogic: 9 key cities - Karachi, Lahore, Islamabad, Faisalabad, Multan, Hyderabad, Sukkur, Gujranwala and Peshawar Pakistan, Gallup Pakistan: National diary panel include all 3 Metros (Karachi, Lahore, Islamabad/Rawalpindi: 2,100 individuals) , 5 Large Cities (Faisalabad, Hyderabad, Multan, Peshawar, Quetta : 1,100 individuals), 10 Small Cities & Towns (Gujrat,Jacobabad,Kasur,Mardan,Pashin,Rajanpur,Rohri,Sahiwal,Sargodha,Thatta : 1,500 individuals) , Rural 800 individuals Philippines: NUTAM (National Urban), Mega TAM (Metro Manila & suburbs), MCTAM (Metro cities). South Korea, Nielsen: National and monitoring 78 Pay TV channels South Korea, TNmS: Peoplemeter Panel and also DMB measurement, Car navigation device (310 panel) and Smartphone of Android OS (700 panel). And Return Path Data panel size is 10,000 homes of KT IPTV India: TAM and BARC to cooperate in the future

30 MULTICHANNEL TV 2016 MEASUREMENT GUIDE 31 Audience Measurement 2015-2016

CAB/SAT REACH & AREA RESEARCH COMPANY SURVEY SAMPLE SIZE PANEL COVERAGE METHODOLOGY DEMOGRAPHIC MEASURED DTT SOFTWARE FREQUENCY Hong Kong Ipsos Media Atlas 5,000 National CATI/Online/F2F 12 - 64 Yes Yes User choice Yes Hong Kong 10 Asia Ipsos Affluent Asia 18,800 10 Markets CATI / Online Affluent 25-64 Yes No User choice Yes Markets 8 Asia Ipsos BE Asia 3,500 8 Markets CATI, Postal & Elite / Top Yes No User choice Markets Online Business Hong Kong Nielsen Media Index 6,000+ Hong Kong Face-to-face/ 12 - 64 Online Australia Nielsen Consumer & 100,000+ Australia Online 14+ Media View New Nielsen Consumer & 12,000 New Zealand Face-to-face 10+ Clear Zealand Media View Decisions Indonesia, Nielsen Consumer & 23,000^ Indonesia, 11 cities Face-to-face 10+ 11 cities Media View Peninsular Nielsen Consumer & 10,000 Pen Malaysia Only Face-to-face 15+ Fuse with TAM No Clear Clear Decision Malaysia Media View data Decision Only Philippines, Nielsen Consumer & 10,000 National Urban Face-to-face 10+ National Media View Urban Singapore Nielsen Consumer & 4,200+ Singapore Face-to-face 15+ Media View Thailand Nielsen Consumer & 9,000+ Thailand Face-to-face 12+ Media View Bangladesh MRB Bangladesh National 15,800 National Face-to-face 15+ Yes No ThinkMedia Yes Media Survey(NMS) China CTR China CNRS 100,000 60 1-4 tier cities F-F /self 15-69 completed/On- line India IMRB India 51,000 National F-F /self 15-55 ABC completed South Korea Hankook South Korea 9,000 National F-F /self 11-64 completed Sri Lanka IMRB Sri Lanka 3,000 National 15-55

Vietnam Kantar Media Vietnam 13,560 6 cities F-F /self 15+ 4 Choices Yes completed

Note: Please contact the research company for a comprehensive report on measurement. 32 MULTICHANNEL TV 2016 MEASUREMENT GUIDE 33 Asia Pacific Pay-TV & Broadband Industry: 2015 Review

Macro malaise, underlined by softer econonic growth, weakening consumption and currency depreciation, has limited media advertising growth for much of 2015 but the consumption of pay-TV & broadband services remains robust. Analysis and research from Media Partners Asia (MPA) showcases the following key trends:

Asia Pacific

• With the exception of Australia, India and the Philippines, pay-TV subscriber additions continue to decelerate in much of Asia Pacific though regional penetration remains robust, reaching 61% in 2015.

• The bundled broadband and pay-TV proposition has started to bolster subscriber growth with customers often paying for broadband as the primary service with pay-TV as a hard bundle or as a value-add. This is increasingly evident in Indonesia and Thailand.

• Fixed broadband adoption has started to grow rapidly from a low base across Southeast Asia and India while mobile broadband is also rapidly scaling up across Asia Pacific, driven by smartphone usage. Fixed broadband household penetration reached 33% in 2015, while wireless broadband per capita penetration soared to 36%.

• In general, most pay-TV operators are experiencing a slowdown in Southeast Asia markets due to macro issues and, in certain cases, market dynamics and structural barriers to growth. The slowdown is occuring at the same time as the growth of low-cost multichannel services (i.e. Astro’s Njoi in Malaysia) and the continued expansion of free satellite services – both organized (i.e. Thailand) and unorganized (Indonesia).

34 MULTICHANNEL TV 2016 COUNTRY OVERVIEW 35 • Also growing at a significant pace in Australia is Astro-owned IPTV wholesaler Pay-TV Net Adds Pay-TV Net Adds 2015 2015 Fetch TV. The company has benefited from wider content availability and an (000’) (000’) aggressive push from third-party telcos, led by Optus. China 9,035 Sri Lanka 185 India 5,079 Japan 155 Korea 1,747 Thailand 150 India Pakistan 590 Malaysia 80 • TV advertising growth has been strong this year but new customer growth across Vietnam 525 Hong Kong 30 satellite and cable platforms has been modest relative to previous years with a little Indonesia 488 Singapore 25 over 5 million net new additions, largely driven by digital satellite. Australia 339 Taiwan 10 • Addressability is growing through digitalization, with close to 50% of India’s pay-TV Philippines 320 New Zealand 5 households having a digital set-top box (STB) at end-2015. Total APAC 18,763 • More growth through digitalization and infrastructural investment is likely to come through the expansion of HITS (a new service for local cable operators in Phases 3 and 4 of digital migration) and R-JIO (a fiber broadband service that requires last- • Pay-TV is increasingly saturated in Hong Kong, Japan, Malaysia, Singapore and mile partnership with cable operators). Taiwan. The focus has shifted in these markets to pricing power and new on- demand services. • The market also needs to factor in Free Dish, a free satellite service with penetration of up to 15 million homes. • The subscription-enabled OTT proposition (i.e. SVOD) from both Netflix and pay- TV operators and broadcasters has started to gain traction in strong broadband markets such as Australia and Japan as well as China and Korea, but faces Korea significant barriers in most other markets due to piracy, and lack of payment gateways and infrastructure. • IPTV operators continue to grow at a healthy pace as MPA projects KT, SKB and LG will add a combined 1.65 million new customers in 2015.

Australia • Hybrid DTH-IPTV operator KT SkyLife (KTS) has also showed a rebound in growth in 2015. • New repackaging and competition is driving pay-TV subscriber growth. • The Korean cable industry remains under pressure from cord-cutting and • Foxtel, MPA estimates, will add an average of 20,000 new subs a month, closing competitive pressure. 2015 with ~240,000 new subs though up-selling will remain modest, leading to ARPU erosion.

• IPTV will factor in the mix more widely after Q4 as Telstra launches new bundled video and broadband services.

36 MULTICHANNEL TV 2016 COUNTRY OVERVIEW 37 Malaysia Pay-TV Penetration Pay-TV Penetration 2015 2015 • Astro, the leading pay-TV operator in Southeast Asia, will add ~40-50,000 new pay (%) (%) subs in 2015 with ARPU up a robust 2%, reasonable momentum in a year when Korea 162% New Zealand 51% Malaysia’s macro fundamentals are weak and consumer sentiment is soft. Hong Kong 104% Vietnam 37%

• Njoi, Astro’s low-cost multichannel service, will drive overall growth, as it nears a 1.5 Taiwan 91% Australia 35% million customer base potentially by end-2015. India 84% Thailand 29% Singapore 82% Japan 29% China 61% Sri Lanka 19% Philippines Pakistan 53% Philippines 16% • The Philippines is the one market in Southeast Asia experiencing relatively robust Malaysia 53% Indonesia 11% macro fundamentals, boosting telecoms, pay-TV and advertising industry growth. Average APAC Penetration (TV HH) 61%

• While SkyCable is adding a modest level of new customers every year, its ARPU remains healthy. Rival Cignal is expected to add ~250,000 new customers this year Indonesia but ARPU growth will be muted until up-selling and packaging improves and takes effect from 2016 onwards. • The market has suffered a deep slowdown due to macro issues, piracy and the growth of free satellite.

• Pay-TV platforms that have grown in 2015 have typically bundled multichannel services with cable and fiber broadband. These have exaggerated the true growth of the pay-TV industry. Mobile Broadband Mobile Broadband 2015 2015 Net Adds (000’) Net Adds (000’)

China 183,950 Australia 2,028 Thailand India 35,020 Taiwan 1,866 Japan 24,093 Malaysia 1,651 • Free satellite, together with digital terrestrial, continues to limit pay-TV upside in Thailand. That said, TrueVisions. Has repackaged its product effectively to grow Indonesia 14,513 Phillippines 1,282 total net new additions. Thailand 10,291 Sri Lanka 745 Vietnam 8,362 Hong Kong 633 • However, much of True’s pay-TV growth is being driven by low-ARPU mass services and broadband bundles with little upside for premium pay-TV services, which have Korea 6,278 New Zealand 612 suffered sustained customer decline. Pakistan 4,151 Singapore 452

Total APAC 295,928

38 MULTICHANNEL TV 2016 COUNTRY OVERVIEW 39 Fixed BB Fixed BB 2015 2015 Penetration (%) Penetration (%)

Singapore 101% Malaysia 33% Korea 100% Vietnam 30% New Zealand 89% Thailand 25% Hong Kong 83% Sri Lanka 11% Japan 74% Philippines 9% Australia 72% Indonesia 8% Taiwan 70% India 6% China 46% Pakistan 6%

Average APAC Penetration (HH) 33%

Mobile BB Mobile BB 2015 2015 Penetration (%) (000’)

Singapore 186% Australia 54% Hong Kong 183% Thailand 48% Korea 140% Vietnam 45% New Zealand 113% Indonesia 27% Japan 79% Sri Lanka 15% Taiwan 68% India 8% China 57% Philippines 8% Malaysia 54% Pakistan 6%

Average APAC Penetration Per Capita 36%

Founded in 2001, Media Partners Asia (MPA) is the leading provider of advisory, consulting and research services, focusing on media and telecommunications industries in Asia Pacific. For more information go to www.mparesearchconsulting.com.

40 MULTICHANNEL TV 2016 GLOBAL OVERVIEW 41 advertising revenue

42 MULTICHANNEL TV 2016 ADVERTISING REVENUE 43 ADVERTISING REVENUE

Asia Pacific Share of TV Advertising

US$ Millions 0 2000 4000 6000 8000 10000 12000 14000 16000 Australia China Hong Kong India Indonesia Japan Malaysia New Zealand Pakistan Philippines Singapore South Korea Taiwan Thailand Vietnam

Multichannel TV Terrestrial TV

Source: Global entertainment and media outlook 2015-2019, PwC, Ovum

44 MULTICHANNEL TV 2016 ADVERTISING REVENUE 45 Asia Pacific Multichannel TV Advertising Revenue (US $ Millions)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2014-2019CAGR Australia 356.497 373.647 416.516 475.82 542.671 571.689 610.746 651.826 695.212 745.808 6.566

China 170.724 201.306 227.576 255.422 292.788 326.657 370.429 411.394 462.396 521.12 12.222

Hong Kong 44.02 54.155 66.719 78.581 77.146 80.805 85.32 89.385 94.491 98.999 5.115

India 1655.012 1826.747 2036.872 2304.881 2682.306 3060.46 3469.283 3889.947 4358.251 4863.809 12.64

Indonesia 15.347 23.977 37.685 59.041 96.361 137.959 184.273 238.495 301.725 368.708 30.784

Japan 433.138 492.253 559.655 634.638 715.303 785.732 863.074 938.931 1022.453 1094.934 8.888

Malaysia 48.012 50.458 52.906 56.994 62.412 67.628 74.508 84.65 95.795 105.427 11.055

New Zealand 26.733 30.42 34.757 38.157 41.29 44.16 47.627 50.812 54.147 57.252 6.755

Pakistan 50.775 60.676 62.264 69.289 76.289 84.624 92.785 101.772 112.201 123.533 10.119

Philippines 72.994 91.204 108.686 122.716 147.519 180.126 225.394 272.64 328.65 398.324 21.977

Singapore 31.375 37.401 39.071 42.193 47.033 51.674 56.836 61.979 67.706 73.867 9.448

South Korea 746.71 1003.143 1114.725 1123.463 1173.12 1226.38 1280.463 1336.419 1395.623 1458.705 4.454

Taiwan 475.844 635.631 599.074 603.658 634.445 654.747 682.562 704.404 738.388 756.109 3.571

Thailand 63.521 92.711 124.862 144.684 170.486 192.262 223.352 254.112 291.418 329.594 14.093

Vietnam 17.447 25.375 33.748 42.04 51.144 60.268 70.213 80.556 91.737 104.305 15.319

Asia Pacific 4208.149 4999.104 5515.116 6051.577 6810.313 7525.171 8336.865 9167.322 10110.193 11100.494 10.264

Source: Global entertainment and media outlook 2015-2019, PwC, Ovum

46 MULTICHANNEL TV 2016 ADVERTISING REVENUE 47 Television Digital Newspapers TV still remains dominantMagazines GloballyRadio and in Asia-PacificOutdoor with Digital spend continuing to grow The Pay TV advertising market continues to grow in Asia-Pacific, with an estimated 100% +6.1% growth in 2015. We predict a CAGR of +8.5% for Pay TV over the next 4 years; this compares to 5.2% for the total advertising market. Television80% Digital Newspapers

Magazines Radio Outdoor CAGR growth of Pay TV advertising will be driven by developing and emerging 60% markets in Asia-Pacific, notably Malaysia, Indonesia and India. From a volume 100% 31% 40% perspective though, Pay TV advertising revenues will be driven by China, India, Japan and South Korea. 80%40%

Total TV is predicted to maintain a strong 38% of all advertising spend by 2019 in 20% % Share of Media 60% 39% 37% Asia-Pacific; although spend on Digital will closely follow at 37%. Globally, by 2019, 31% 40%

Digital spend will be higher than TV spend at 40% and 37% respectively. Global 40%0% 2015 2019 The opportunity for the industry to expand its footprint beyond traditional TV is more evident than ever as spend into Digital Video continues to accelerate. Within 20% % Share of Media 39% 37% Asia-Pacific, growth in Mobile Video is predicted at 43% per annum up to 2019; with Online Video expected to grow at 11.5% per annum. By 2019, we estimate that 0% Mobile Video advertising spend will overtake Online Video spending. 2015 2019 Television Digital Newspapers In addition to the advertising opportunities, this growth in Digital Video has an Magazines Radio Outdoor impact on content marketing for advertisers, agencies and broadcasters. 100%

Television Digital Newspapers 80% Magazines Radio Outdoor

100%60% 29% 37% Craig Harvey, Head of Research, IPG Mediabrands Hong Kong 80%40% asia-pacific 20% % Share of Media 60% 41% 38% 29% 37%

40%0% 2015 2019

Source: Magna Global Advertising Forecasts (June 2015), IPG Mediabrands 20% % Share of Media 41% 38%

48 49 MULTICHANNEL TV 2016 0% ADVERTISING REVENUE 2015 2019 Advertisers continue to invest into Digital Video in APAC, with Mobile IPG Mediabrands: APAC TV Advertising Revenue Video expected to overtake Online Video in 2019 2015 2015 % OF 2015 TOTAL % OF TOTAL Online Video Mobile Video TOTAL TV (US$ MILLIONS) ADVERTISING REVENUE 10,000 REVENUE 9,000 8,000 FTA PAY TV TOTAL FTA PAY TV FTA PAY TV 7,000 5,087 Asia Pacific 46,271 13,346 147,226 31% 9% 78% 22% 6,000 Australia 3,125 459 11,991 26% 4% 87% 13% 5,000 4,000 China 12,756 5,033 49,675 26% 10% 72% 28%

US$ millions 1,216 3,000 Hong Kong 1,038 50 3,500 30% 1% 95% 5% 2,000 4,231 2,736 India 241 2,864 7,737 3% 37% 8% 92% 1,000 Indonesia 3,383 19 6,688 51% 0% 99% 1% 0 - 1 Japan 17,686 1,334 42,110 42% 3% 93% 7% 201 2005 2006 2007 2008 2009 2010 2012 2013 2014 2015 2016 2017 2018 2019 Malaysia 746 271 2,882 26% 9% 73% 27% New Zealand 580 99 1,850 31% 5% 85% 15% Developing and emerging markets in APAC will register high growth Pakistan 32 172 328 10% 52% 16% 84% rates over the next 4 years Philippines 995 41 1,658 60% 2% 96% 4%

Pay TV CAGR % (2015 vs. 2019)2 Singapore 604 60 2,008 30% 3% 91% 9% 18.0% 15.6% 15.6% South Korea 1,655 1,595 8,866 19% 18% 51% 49% 16.0% 14.8% 14.0% Sri Lanka 93 4 182 51% 2% 96% 4% 12.4% 12.1% 12.4% 11.8% 12.0% Taiwan 136 729 2,149 6% 34% 16% 84% 10.0% 8.5% 7.8% 7.7% 8.1% 8.0% Thailand 2,468 315 4,344 57% 7% 89% 11% 6.0% 5.1% 3.7% 4.1% Vietnam 733 301 1,258 58% 24% 71% 29% 4.0% 3.2% 3.2% 2.0% 0.8%

FTA PAY TV TOTAL

0.0% 2015 vs. 2014 2.1% 6.1% 6.3% India iwan China Japan

etnam % Change Ta Vi Pakistan Thailand Australia Malaysia Sri Lanka Indonesia Singapore Philippines Hong Kong Asia-Paciﬁc South Korea New Zealand

Source: Magna Global Advertising Forecasts (June 2014), IPG Mediabrands Sources : Magna Global Advertising Forecasts (June 2015) IPG Mediabrands Note: Data excludes revenue from regional campaigns

50 MULTICHANNEL TV 2016 ADVERTISING REVENUE 51 Advertising Revenue CAGR 2015-2019 APAC TV Advertising Revenue CAGR by Market

GLOBAL ASIA PACIFIC FTA TV PAY TV

2015 2019 CAGR 2015 2019 CAGR 2015 2019 CAGR 2015 2019 CAGR $US M $US M $US M $US M $US M $US M $US M $US M FTA Television 143,176 165,008 3.6% 46,271 50,510 2.2% Asia-Pacific 46,217 50,510 2.2% 13,346 18,493 8.5% Pay Television 54,740 66,840 5.1% 13,346 18,493 8.5% Australia 3,125 2,787 -2.8% 459 532 3.7%

Total TV 197,916 231,848 4.0% 59,617 69,003 3,7% China 12,756 14,039 2.4% 5,033 6,760 7.7% Online Video 11,089 21,454 17.9% 2,736 4,231 11.5% Hong Kong 1,038 1,312 6.0% 50 68 7.8% Mobile Video 4,257 21,340 49.6% 1,216 5,087 43.0% India 241 253 1.2% 2,864 4,575 12.4%

Total Video 15,346 42,794 29.25 3,952 9,318 23.9% Indonesia 3,383 5,078 10.7% 19 33 14.8% TOTAL 512,994 626,672 5.1% 147,227 180,609 5.2% Japan 17,686 17,345 -0.5% 1,334 2,103 12.1% ADVERTISING MARKET Malaysia 746 896 4.7% 271 484 15.6% New Zealand 580 596 0.7% 99 112 3.2% Source: Magna Global Advertising Forecasts (June 2014), IPG Mediabrands Note: Data excludes revenue from regional campaigns Pakistan 32 39 5.1% 172 275 12.4% Philippines 995 1,369 8.3% 41 56 4.1% Singapore 604 711 4.1% 60 71 4.1% South Korea 1,655 1,769 1.7% 1,595 1,811 3.2% Sri Lanka 93 132 9.2% 4 7 15.6% Taiwan 136 135 -0.1% 729 753 0.8% Thailand 2,468 3,015 5.1% 315 384 5.1% Vietnam 733 1,034 9.0% 301 469 11.8%

Source: Magna Global Advertising Forecasts (June 2014), IPG Mediabrands Note: Data excludes revenue from regional campaigns

52 MULTICHANNEL TV 2016 ADVERTISING REVENUE 53 Share of Global Adspend by Region in 2016 (US$ Million)

Television is the dominant advertising medium in Asia Pacific, but its share of the Asia Pacific ad market has been declining since 2011 as advertisers have followed consumers on to the internet. Consumers in Asia Pacific spent an average of 158 200,839 minutes a day watching television in 2014, down from 166 minutes in 2011, while the 159,137 amount of time they spent using the internet increased by 63% between 2011 and 115,340 2014 to 97 minutes a day. Over the same period television’s share of total adspend dropped from 41.7% to 40.0%, while the internet’s share increased from 16.3% to 42,263 23,229 25.2%. By 2017 we expect television to account for 36.4% of adspend in Asia Pacific 4,759 11,671 and the internet to account for 34.2%; at this rate it won’t be long before the internet overtakes television. North Asia Paciﬁc Western Latin Central & Middle Rest of America Europe America Eastern East & world

Europe North Despite its loss of market share, we expect television advertising in Asia Pacific to Africa continue to grow over the next few years, because the total market is expanding rapidly. Television adspend totalled US$56.4 billion in 2014, up from US$37.6 billion ten years earlier, and we predict it will reach US$61.3 billion in 2017.

However, one of the driving forces behind the rise of internet advertising is the rapid growth of online video. The young, affluent consumers who spend the least Share of Global Adspend by Region 2015 (%) time watching television are the heaviest users of online video, which is proving a very effective medium for advertising to a valuable audience. Online video adspend grew 60% in Asia Pacific in 2014, and we estimate it will be a tenth of the size of TV (Growth by region in 2015 %) adspend in Australia and China in 2015. Online video has quickly become a vital (+3.6%) (+3.1%) (+6.1%) (-4.3%) (+8.4%) (+2.3%) (+7.3%) partner to television, for viewers, broadcasters and advertisers. 36.4 28.2 20.9 Jonathan Barnard, Head of Forecasting, 7.3 4.2 2.0 Zenith Optimedia 0.9 North Western Asia Paciﬁc Central & Latin Middle Rest of America Europe Eastern America East & world Europe North Africa

Source: Zenith Optimedia Advertising Expenditure Forecasts June 2015

54 MULTICHANNEL TV 2016 ADVERTISING REVENUE 55 Global Share of Ad Expenditure 2016

Growth (%) in Asia Pacific Adspend 12.7

Newspapers 13% Internet Newspapers Magazines 30% 13% 6.9 6% 6.7 6.3 6.2 Internet 6.0 6.1 Magazines 5.6 30% 6%

Television Outdoor 37% 7% Television Outdoor 37% 7% Cinema 0.5 Radio -4.9 Cinema 6% 2009 2010 2011 2012 2013 2014 2015 2016 2017 0.5 Radio 6% Asia Pacific Share of Ad Expenditure 2016 Growth (%) in Asia Pacific Television Adspend

Newspapers 14.2 Magazines 14% 3% Newspapers Internet Magazines 10.3 32% 14% 3% Internet 32% 6.2 4.7 Television 3.6 2.6 2.9 2.8 37% 2.3 2.0 Television Outdoor 10% 37%

Outdoor 10% -3.4 Cinema Radio 0.5 4% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Cinema Radio 0.5 4%

Source: Zenith Optimedia Advertising Expenditure Forecasts June 2015 Source: Zenith Optimedia Advertising Expenditure Forecasts June 2015

56 MULTICHANNEL TV 2016 ADVERTISING REVENUE 57 Television Expenditure in Asia Pacific 2015 Television Advertising Expenditure % Share 2016

Japan 17,597 11.7 8.7 12.5 10.0 China 16,369 27.0 South Korea 4,855 48.7 43.2 Indonesia 3,899 Australia 3,530 India 2,735 97.0 91.3 90.0 Thailand 2,633 88.3 87.5 73.0 Philippines 1,511 56.8 Vietnam 969 51.3 Hong Kong 835 Taiwan 818 3.0 Malaysia 789 Australia Hong India* Malaysia New Philippines South Vietnam Singapore 583 Kong Zealand Korea New Zealand 497 Pakistan 310 Pay TV Free TV

Television Share of Total Adspend in Asia Pacific 2015 (%) Top Online Video Ad Markets in Asia Pacific in 2015

87.6 Adspend (US$ million)

65.6 64.5 64.9 58.1 China 1,697 Australia 320 39.1 41.3 38.9 39.6 38.7 38.2 30.0 32.7 30.2 32.5 25.2 28.5 Taiwan 100 New Zealand 33

South Korea 23

Singapore 20 China India Japan Taiwan Pakistan ThailandVi etnam Australia Indonesia Malaysia GLOBAL Malaysia 17 Hong Kong PhilippinesSingapore Asia Paciﬁc New Zealand South Korea 0

Source: Zenith Optimedia Advertising Expenditure Forecasts June 2015 Source: Zenith Optimedia Advertising Expenditure Forecasts June 2015

58 MULTICHANNEL TV 2016 ADVERTISING REVENUE 59 Growth in Asia Pacific Online Video Adspend %

% Growth

63.8 60.1

47.6

37.0

27.4

2013 2014 2015 2016 2017

Source: Zenith Optimedia Advertising Expenditure Forecasts June 2015

60 MULTICHANNEL TV 2016 ADVERTISING REVENUE 61 with OTT

62 MULTICHANNEL TV 2016 GLOBAL OVERVIEW 63 MAKING WAVES WITH OTT

Growth of OTT Subscription in Asia Pacific (US $ Millions)

2014- 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2019CAGR Australia 37.835 42.582 61.163 87.247 114.721 140.369 168.577 200.555 237.29 281.337 19.651 China 0 47.348 72.306 103.528 134.751 165.973 197.195 228.418 259.641 290.863 16.636 Hong Kong 0 0 0 0 0 0 0 0 0 0 - India 0 2.086 11.774 20.221 31.057 43.1 55.389 67.3 81.684 96.067 25.338 Indonesia 0 0 0 0 0 0.007 1.983 3.959 5.935 7.911 - Japan 90.293 95.727 126.228 172.146 245.855 311.004 379.003 443.004 516.911 590.817 19.167 Malaysia 0 0 0 0 0.148 1.794 3.44 5.086 6.732 8.378 124.169 New Zealand 7.702 8.351 12.978 19.249 26.701 34.98 43.712 51.93 61.119 70.308 21.366 Pakistan 0 0 0 0 0 0 0 0 0 0 - Philippines 0 0 0 0 0 0 0 0 0 0 - Singapore 0 4.016 6.808 9.256 12.375 16.382 21.076 26.1 32.48 38.858 25.715 South Korea 0 10.677 12.94 27.333 43.796 67.781 93.72 116.939 145.921 174.904 31.909 Taiwan 0 0 0 0 0 0 0 0 0 0 - Thailand 0 0 0 0 0.109 1.671 3.233 4.795 6.357 7.919 135.64 Vietnam 0 0 0 0 0 0 0 0 0 0 - Asia Pacific 135.83 210.787 304.197 438.98 609.513 783.061 967.328 1148.086 1354.07 1567.362 20.792

Source: Global entertainment and media outlook 2015-2019, PwC, Ovum

64 MULTICHANNEL TV 2016 MAKING WAVES WITH OTT 65 WAVE MAKERS The Ericsson ConsumerLab TV & Media Half of viewing time is TV series & movies Average number of self-reported weekly hours of active TV/video Report 2015 viewing, by gender:

50% of consumers state they watch streamed on-demand video content at least once a day. They estimate that they spend 6 hours a week watching streamed TV series, TV series according to a ﬁxed TV schedule 4.8 programmes and movies on-demand, this has doubled since 2011. 4.0

Movies according to a ﬁxed TV schedule 3.9 The popularity of Linear TV remains high, mainly due to its access to premium 4.3 viewing, live content and its social value. Linear TV is watched more by older age Other TV programs according 3.0 groups, whilst those aged 16-34 spend 53% of all video viewing on a smartphone, to a ﬁxed TV schedule 2.8 laptop or tablet. Streamed on-demand TV series 3.0 Average number of self reported weekly hours of active 2.5 TV/video viewing: Recorded movies, TV series 3.0 and other TV shows 2.9 6,0 h/week Streamed on-demand movies 2.3 Streamed 2.5 on demand 2.3 TV programs Live news 2.6

Other 1.9 1.8 Streamed on Streamed on-demand 1.3 demand TV other TV programs 1.3 2,9 h/week series Educational or instruction videos 1.1 121% 1.3 increase Streamed on Live sports 1.0 demand TV series 3.1 and programs 0.7 Streamed Live events on demand 1.2 Streamed on movies 90% e-sport 0.4 demand movies increase 1.1

2011 2015 Female Male

BASE: Population aged 16-59 with broadband at home who watch any type of TV/Video at least weekly BASE: Population aged 16-59 with broadband at home who watch any type of TV/Video at least weekly in Brazil, Canada, China, Source: Ericsson ConsumerLab TV & Media 2015 Study Colombia, France, Germany, Greece, Ireland, Italy, Mexico, Portugal, Russia, Spain, South Korea, Sweden, Taiwan, Turkey, UK, Ukraine, US Source: Ericsson ConsumerLab TV & Media 2015 Study

66 MULTICHANNEL TV 2016 MAKING WAVES WITH OTT 67 Daily media habits On-demand frequency Percentage of people watching different media types at least once per day (global Percent of people using each on-demand service on a daily vs. weekly basis, US 2015 average of self reported frequency of viewing) [self-reported]

100% 41% YouTube 71% Netﬂix 27% 75% 52% 6% Amazon Prime 19% 8% 50% Hulu 19% HBO Go/HBO 5% Now 13% 25% 4% ABC.com 12% 4% Apple iTunes 9% 0% Xﬁnity On- 5% 2010 2011 2012 2013 2014 2015 demand 9% 1% Crackle 9% At least daily Scheduled linear TV Recorded linear TV 3% Vevo 8% At least weekly Streamed on demand video U-verse On- 4% (YouTube, short clips, movies, TV-series & programs) demand 6% 3% Twitch 6% Vudu 2% BASE: Population aged 16-59 with broadband at home who watch any type of TV/Video at least weekly in Brazil*, China, 5% Germany, Spain, South Korea*, Sweden, Taiwan, UK, US, * excluded in 2010 figures, ** 3 years moving average ¼, ½, ¼ 2% [Showing: Use once per day or more] FiOS on demand 3% Source: Ericsson ConsumerLab TV & Media 2010-2015 Study 1% Pirate streaming 2% 1% Pirate File sharing 2%

BASE: US Population aged 16-59 with broadband at home who watch any type of TV/Video at least weekly Source: Ericsson ConsumerLab TV & Media 2015 Study

68 MULTICHANNEL TV 2016 MAKING WAVES WITH OTT 69 A shift from fixed to mobile devices Share of self-reported total weekly TV/video viewing time, per year, done on respective device **

100% Smartphone, tablet & laptop 75%

50% TV screen & desktop 25%

0% 2010 2011 2012 2013 2014 2015

TV Screen Desktop Laptop Smartphone Tablet screen screen screen screen

61% 42% of consumers watch TV & think it is very important video on their smartphones, to watch their TV & video an increase of 71% since 2012 content wherever they are

BASE: Population aged 16-59 with broadband at home who watch any type of TV/Video at least weekly in Brazil*, China, Germany, South Korea*, Spain, Sweden, Taiwan, UK and US. * excluded. in 2010 figures, ** 3 years moving average ¼, ½, ¼ Source: Ericsson ConsumerLab TV & Media 2010-2015 Study

70 MULTICHANNEL TV 2016 MAKING WAVES WITH OTT 71 ASIA-PACIFIC OTT: WHAT’S NEW? Asia-Pacific OTT viability key stats By Abigail Cruz, SNL Kagan by December 2015 (continued) Asia-Pacific comparison table IPTV MARKET SUMMARY Market Multichannel BB HHs/HHs gap b/n BB and The Asia-Pacific region is gradually becoming a favorable landscape for medium- to subs/HHs (%) (%) MC pen (%) long-term over-the-top video streaming development. By end-2015, broadband AUSTRALIA 36.0 77.0 41.0 adoption is expected to maintain notable market traction in several markets CHINA 68.0 41.3 (27.0) including Australia, New Zealand, Singapore and Japan. On the other hand, India may continue to have one of the region’s highest penetration rate disparities INDIA 52.2 7.5 (45.0) between broadband and pay TV services, projected to reach 7.5% and 52.2% by JAPAN 29.0 69.0 40.0 year-end, but in light of the implementation of various OTT initiatives by local and NEW ZEALAND 53.0 91.2 38.2 out-of-market OTT players, India may eventually become one of Asia Pacific’s liveliest SINGAPORE 76.4 94.3 18.0 OTT playing fields. Much as are other countries in the region such as Malaysia, Philippines and Hong Kong, these markets are taking a positive turn for OTT as more SOUTH KOREA 153.0 98.0 (55.0) online video streaming services are introduced. TAIWAN 76.0 75.3 (0.7) INDONESIA 6.0 7.0 1.0 MALAYSIA 62.0 34.2 (28.0) Asia-Pacific OTT viability key stats by December 2015 PHILLIPPINES 14.4 14.0 (0.4) Asia-Pacific comparison table HONG KONG 86.3 90.0 4.0

Market Occupied Multichannel Broadband Given the OTT growth in the Asia-Pacific region, SNL Kagan has expanded its Households Subscribers Households coverage of OTT in the region from an initial eight markets to 12 as of September AUSTRALIA 8,539,453 3,044,660 6,564,966 2015, now including Indonesia, Malaysia, Philippines and Hong Kong. In this article, CHINA 433,745,557 294,341,055 179,066,029 SNL Kagan outlines select OTT service launches during the first half of 2015, as well INDIA 283,517,700 147,856,492 21,148,860 as OTT launches expected in the second half. JAPAN 54,459,475 15,621,442 37,558,828 NEW ZEALAND 1,598,936 844,059 1,457,996 Australian OTT had a busy first quarter, with three OTT services launched. Global SINGAPORE 1,278,839 977,654 1,205,999 player Netflix Inc. began its Asia-Pacific expansion with launches in Australia and New Zealand in March 2015, following the January launches of FOXTEL’s Presto and SOUTH KOREA 18,941,487 28,919,281 18,540,021 StreamCo’s Stan. TAIWAN 8,515,696 6,442,780 6,415,856 INDONESIA 70,171,478 4,158,250 4,876,795 Subscription prices of the three services are similar, with Netflix’s basic plan priced at A$8.99 and Stan at A$10.00 per month for unlimited access to TV and movies. Presto MALAYSIA 7,239,839 4,464,682 2,475,567 provides more subscription options to the Australian market by offering movie- and PHILLIPPINES 22,384,704 3,226,783 3,111,854 TV-focused monthly plans, each priced at A$9.99, and a combination of TV and HONG KONG 2,489,027 2,148,200 2,230,494 movies for A$14.99. Quickflix, an established OTT player in Australia, shares the A$9.99 price point.

72 MULTICHANNEL TV 2016 MAKING WAVES WITH OTT 73 Quickflix vs. new OTT players pricing While Presto may be the only SVOD service among the three currently available on the Telstra Corp. Ltd. T-Box, Telstra’s set-top TV recorder, the Netflix, Presto and Stan service will soon be joined by Netflix and Stan through another Telstra Monthly price* (A$) are all available on connected device, Telstra TV. In July 2015, Telstra announced a partnership with streaming platform Roku Inc. in launching a device that will offer Presto, QUICKFLIX 9.99 a variety of devices, including computers, Stan and Netflix to customers, along with catch-up TV services and the latest NETFLIX **8.99 smartphones and content from BigPond Movies, a major online movie rental store in Australia. STAN 10.00 tablets. However, Netflix Telstra TV should be available for purchase this September or October. PRESTO TV 9.99 differentiates itself from These OTT streaming services should contribute to shaping Australia’s online Stan and Presto by PRESTO MOVIES 9.99 video consumption in the near to medium term, alongside local players such expanding its device PRESTO ENTERTAINMENT 14.99 as Quickflix and BigPond Movies, and major broadcasters including Special availability to include (TV & MOVIES) Broadcasting Service (SBS) and Australian Broadcasting Corporation (ABC) game consoles. *As of August 2015 through their catch-up TV services. ** For Netflix’s single-stream standard definition plan. © 2015 SNL Kagan, a division of SNL Financial LC, estimates. All In Japan, Netflix has entered into several local partnerships. Its tie-up with rights reserved. SoftBank lets customers of the local mobile carrier sign up for Netflix through SoftBank’s shops, call centers, website and electronic retailers. SoftBank will also extend its billing platform to include users’ Netflix subscription fee.

A content deal between Netflix and Fuji Television Network Inc. was Australia select SVOD OTT compatible devices announced in June, with the local broadcaster committing to produce and provide original content for Netflix distribution. Programs to be available Netflix Stan Presto include a new season of Fuji Television’s popular reality TV show “Terrace P P P COMPUTER House,” and “Atelier,” a new drama series. Netflix is also set for the global SMART PHONE P P P launch of its first original Japanese series, “Hibana,” which means “spark.” TABLET P P P Similar to its approach in other markets, Netflix offers three monthly P P SMART TV subscription plans in Japan. Its basic subscription plan is currently priced at INTERNET STREAMING P P ¥650 (pre-tax), its standard plan at ¥950 (pre-tax) and its premium plan at PLAYER (APPLE TV) ¥1,450 (pre-tax). A major competitor in the market, Hulu, currently prices its GAME CONSOLE P monthly subscription plan at ¥933 (pre-tax). Hulu Japan was launched by Hulu LLC in 2011 and acquired by Nippon Television in February 2014. PAY TV SET-TOP BOX P* P*

Select compatible devices as of August 2015. *Pay TV Set-top-box (STB) being referred to: Netflix - Fetch TV STB; Presto - Telstra T-Box. © 2015 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved.

74 MULTICHANNEL TV 2016 MAKING WAVES WITH OTT 75 The competition between Netflix and Amazon may soon spread to India, where both Netflix and Hulu pricing intend to launch sometime between late 2015 and early 2016. While both global players would have to deal with local online video streaming services including Eros Monthly Price* (¥, pre-tax) Now and Zee Entertainment Enterprises Ltd.’s Ditto TV, as well as strategies to be implemented by DTH operators such as Tata Sky Ltd., another challenge would be NETFLIX prevalent slow Internet speeds in India. However, SNL Kagan believes the recent BASIC PLAN (SINGLE-STREAM STANDARD DEFINITION) 650 launch of 4G services in the market should contribute to faster, seamless online STANDARD PLAN (TWO-STREAM HIGH DEFINITION) 950 content delivery in the medium to long term. PREMIUM PLAN (FOUR-STREAM 4K ULTRA HIGH- 1,450 Emerging markets such as Malaysia and the Philippines have also witnessed recent DEFINITION FAMILY PLAN OTT development. In both markets, OTT provider iFlix launched in May 2015, 933 HULU offering over 10,000 hours of Western and Asian content through computers, *Monthly price indicated is as of September 2015 smartphones and tablets.

In the Philippines, another OTT service launched during the first half of the year was Following the Netflix launch announcement, in August 2015 Amazon.com Inc. SingTel’s Hooq. Currently, Hooq has a monthly subscription fee of 149 Philippine announced plans to launch Prime Instant Video in Japan in September. Prime pesos, whereas iFlix is priced at 129 pesos. The emergence of these players should subscriptions are already available in the market for ¥3,900 annually, and members increase the Filipino market’s openness to patronizing subscription video-on- will not incur additional costs to access Prime streaming content. demand services. Partnerships made by Hooq and iFlix with local telecommunication Another Japanese OTT entrant, Bonobo, should launch later this year. The service, service providers should also help increase online video consumption. owned by Japan Contents Group, will offer movies, music, anime and dramas on a In Hong Kong, the recent launch of HBO GO’s stand-alone service may signal the transactional basis. beginning of more intense OTT competition. Launched in April 2015, HBO GO Video streaming in Japan is gaining momentum with the entrance of global offers HBO and Cinemax original content without a TV package subscription. The players. SNL Kagan expects these entities to work on strengthening local content stand-alone OTT service can be downloaded from Apple Inc.’s Apple store for Apple partnerships in order to capture the interest of the Japanese market and cope products, and from Google Inc.’s Google Play for Android devices. It is currently with tough competition from the country’s key local broadcasters such as NHK and available for HK$88 monthly. Nippon TV. Another potential entrant into Hong Kong’s OTT space is leading Chinese OTT player In India, SingTel’s Hooq and STAR India Pvt Ltd’s Hotstar recently joined the OTT iQiyi. Early this year, the Baidu Inc.-backed video streaming site expressed its intent space. Both are currently available on computers, smartphones and tablets. The main to expand coverage to include Hong Kong. Netflix should also launch in Hong Kong difference between the two is that Hotstar is free of charge, whereas Hooq has a in early 2016, around the same time as its planned launches in other Asian markets monthly subscription plan currently priced at 199 Indian rupees. including South Korea, Singapore and Taiwan.

Hooq subscribers can choose from an extensive range of local and international content, including titles from Sony Corp., Warner Bros. Entertainment Inc. and Miramax Film Corp. Hotstar offers Bollywood and regional movies, as well as Star India television and sports programming. In the past couple of months, the OTT service has garnered strong viewership, particularly for World Cup Cricket.

76 MULTICHANNEL TV 2016 MAKING WAVES WITH OTT 77 MAKING WAVES WITH OTT OOYALA QUARTERLY VIDEO INDEX Tablet and Smartphone Video Trends

Ooyala’s quarterly Global Video Index, informed by consumption data from hundreds of millions of viewers, and supported with metrics from Ooyala’s ad tech 50% platforms and a wealth of insight gleaned from scouring reams of industry research, Share of Mobile sheds some light on the new shape the TV landscape is taking. 40% Video Plays

TABLET AND SMARTPHONE VIDEO TRENDS 30% Younger consumers continue to drive the adoption of mobile video, seeing it as the core of their video entertainment universe. 20%

And the trend is a global one. Nearly half of all video plays in the second quarter 10% were on mobile devices. Smartphones continue to be the device of choice, with nearly 8X as many plays on smartphones as on tablets. 0% AUG JUL JUN MAY JUN The second quarter saw mobile video plays exceed 44%, up 74% from a year ago 2011 2012 2013 2014 2015 and up a whopping 844% since Q2 2012. By the end of 2015, we expect mobile to account for more than 50% of all video plays. Since Q2 2012, mobile video plays have grown at a compound annual growth ENGAGEMENT PATTERNS BY DEVICE rate (CAGR) of more than 111%, with the share of video plays on mobile devices increasing to 44% in Q2 2015 from less than 5% over the same period. Consumers apparently have decided that any screen is suitable for watching any That’s a whopping 844% rise. content, something that has become increasingly clear across the past few quarters.

In Q2 2015, the percentage of video views on mobile devices continued the trend, Mobile phones (32%) remain a popular screen for watching short-form video in albeit at a more reasonable pace. Year-over-year mobile video plays increased 74%. lengths of 1–3 minutes, although PCs (32%) appeared to be equally as popular. But quarterover-quarter (Q/Q) growth was 6%, the most modest quarterly increase LONG-FORM VIDEO CONSUMPTION since the 5% increase seen in Q4 2012. When it comes to longer-form content of over 10 minutes in length, views by device Call it, perhaps, an offshoot of the law of large numbers. As mobile views — and the were more even. Tablets (57%) and connected TVs (53%) saw a slightly higher number of video views overall — continue to grow, double-digit increases are less percentage of views, followed by desktop (40%) and mobile phones (33%). likely. But mobile continues to show tremendous traction among Millennials and younger consumers. For content over 30 minutes in length, connected TVs (52%) were the top choice, followed by tablets (36%), mobile phones (23%) and PCs (22%). U.K. telecom regulator Ofcom, for example, recently reported that 45% of consumers aged 16–24 were more likely to use their smartphone to watch video than a set-top box, and said under-45-year-old consumers were driving a significant decline in traditional TV viewing of between 8% and 12%.

78 MULTICHANNEL TV 2016 MAKING WAVES WITH OTT 79 ZenithOptimedia, meanwhile, forecasts a 23% global increase in the amount of time people will spend consuming online video daily in 2015, and an additional increase ENGAGEMENT PATTERNS BY DEVICE of nearly 20% in 2016. The biggest driver? The rapid rise of smartphone and tablet Screen-size relevance for watching online video? Fuggedaboudit. penetration across the globe. It expects mobile video viewing to grow by 44% in 2015 and 35% in 2016, with video consumption on non-mobile devices increasing Consumers are firmly embracing the concept that video can be viewed on any nearly 10% in 2015 and 7% in 2016. The company said mobile devices accounted for screen, regardless of genre. 23% of time spent watching online video worldwide in 2012 and 40% in 2014, and forecast it to reach 53% in 2016. That increase has been accompanied by a decline Ooyala’s data shows that tablets (57%) and connected TVs (53%) were used nearly in linear viewing in France and Russia since 2013, in the U.K. and the U.S. since 2014, equally in terms of share of time when video length exceeds 10 minutes. Desktops and declines are expected in China this year. followed at 40%, with mobile phones coming in at 33%.

Other regions also expect huge growth in mobile adoption and subsequent The figures have been fairly equivalent over the past few quarters as tablets and increases in the growth of mobile video consumption. Researcher GfK pegged Latin mobile devices assured themselves a place at the video table and desktops saw America as the fastestgrowing smartphone market in the world, adding users even some gradual decline. faster than China or North America. Mobile phones maintain their dominance as the devices more suited to snacking 75% Engagement Patterns by Device on content, with users spending 67% of their time with content less than 10 minutes Share of time watched by device and video length Q2 2105 long. That’s a slight bump up from 63% in the previous quarter. Nearly one-third (32%) of time watched in the quarter was with content one- to three-minutes long, the same as the share for desktops. 50% Desktop devices also saw a sizable piece of the share of time watched with video less than 10 minutes long, about 60% in the second quarter, down from 65% in Q1.

25% For the full report, go to http://go.ooyala.com/wf-video-index-q2-2015.html

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80 MULTICHANNEL TV 2016 MAKING WAVES WITH OTT 81 advertising regulations

82 MULTICHANNEL TV 2016 ADVERTISING REGULATIONS 83 ADVERTISING REGULATIONS The following are brief summaries. Much more detailed information is available to CASBAA members at www.casbaa.com/advertisingrules

AUSTRALIA technically do not apply to online platforms, Chinese internet content providers tend The Australian Subscription Television and Radio Association (ASTRA) Codes to comply with those rules as a matter of practice. of Practice for Subscription Broadcast Television require that advertisements comply with the relevant Australian Association of National Advertisers’ (AANA) Foreign commercials on all platforms must be accompanied by Mandarin voiceover Codes, covering matters such as food and beverages, marketing to children and simplified Chinese titles. and environmental claims. There are a number of other applicable codes, some self-regulatory (the Alcohol Beverages Advertising Code) and some legislated HONG KONG (Therapeutic Goods Advertising Code). The AANA Codes also apply to advertising For a “light-touch” government, Hong Kong has a surprising array of advertising on online content platforms, as do various other self-regulatory codes and restrictions. Broadcast licensees are required to observe the Communications guidelines. There tends to be compliance by advertisers on the major legitimate Authority’s Generic Code of Practice on TV Advertising Standards as well as laws online content platforms. applying across all platforms (eg. pharmaceuticals and tobacco legislation). There are no rules specifically relating to online advertising except those laws that In Australia, advertising revenue of pay-television operators is limited to 50% of total apply to all advertising; the CA Code of Practice does not apply to online services. revenue. INDIA CAMBODIA The Programme and Advertising Codes as prescribed under the Cable Television The permission of the Ministry of Information is required for any advertising in Network Rules, 1994, are provided by the Ministry of Information & Broadcasting Cambodia. Suppliers of advertised goods/services must sign a contract with the (MIB). These, along with the Advertising Standards Council of India (ASCI) Code for Ministry of Information, requiring the supplier to comply with advertising regulations. Self-Regulation in Advertising, govern advertising on pay television platforms. The Although the MOI contract does not refer to online advertising, there are a number ASCI Code is also intended to apply to online advertising. The advertising of certain of advertising rules applying generally across all platforms (eg. pharmaceuticals, products and services (alcohol, pharmaceuticals, food and beverages, tobacco) are alcohol, personal hygiene and tobacco). regulated across all platforms.

CHINA Advertising on cable, DTH and IPTV platforms is limited to a maximum of 12 minutes The State Administration of Industry and Commerce supervises advertising generally, per clock hour. whilst the State Administration of Press, Publication, Radio, Film and Television has also released regulations for broadcast television advertising. INDONESIA The Indonesian Broadcasting Commission (KPI) and Association of Advertising Pay-television advertising is limited to 12 minutes per hour (other than for the peak Agencies (PPPI) have comprehensive, detailed advertising regulations. The KPI viewing period of 7pm – 9pm, to which a maximum of 18 minutes advertising in total provides a Code and Standard of Advertising for broadcasting content; the PPPI, applies). an Advertising Code of Ethics and Practice (EPI). The EPI also applies in theory to domestic online advertising, but advertising-related rules are typically not enforced Generally-applicable advertising rules (eg. Pharmaceuticals, gambling, food and against online platforms. beverages and tobacco, and advertising to minors) apply to online platforms. Although advertising regulations specific to broadcast television and radio The KPI currently interprets the law as requiring blanket replacement of foreign advertising with domestic advertising on pay television channels.

84 MULTICHANNEL TV 2016 ADVERTISING REGULATIONS 85 JAPAN voluntary, decisions are universally complied with. A range of product-specific and Pay television advertising is subject to the Broadcasting Law, product-specific consumer protection statutes also apply. legislation and self-regulation through various industry bodies, particularly the Japan Commercial Broadcasters Association (the “Association”). Online advertising is also With respect to advertising on online content services, the ASA codes apply to subject to product-specific laws and is self-regulated through the Japan Interactive linear broadcasts (as opposed to on-demand services) and other services where the Advertising Association. content provider is a member of the ASA. In addition, the Interactive Advertising Bureau of New Zealand has developed guidelines for in-stream advertising formats. The Association requires pay television advertising to be limited to 18% or less of total broadcasting hours. PHILIPPINES The government Movie and Television Review and Classification Board (MTRCB) MALAYSIA deputized the Association of Broadcasters of the Philippines (KBP) to manage The Communications and Multimedia Content Forum of Malaysia (CMCF) publishes self-regulation of advertising. The Advertising Standards Council (ASC) works with the Content Code and Standards, while the Advertising Standards Authority issues the KBP in respect of advertising content. The Advertising Board of the Philippines its Code of Advertising Practice. These Codes are intended to apply to advertising (AdBoard) is also involved in self-regulation. on online platforms as well as pay television platforms, although compliance is voluntary. Whether OTT TV services will come within the scope of these organisations’ activities has not been tested to date. Certain product-specific advertising laws (eg. relating All advertisements have to be submitted pre-broadcast to the National Film to tobacco and gambling) clearly apply to all advertising on all platforms. However, Development Corporation of Malaysia (NFDCM) for assessment against “Made in other rules (eg. relating to alcohol and pharmaceuticals) do not clearly apply to Malaysia” rules, although this is not taken to apply to advertising on online content online advertising but such advertising is expected to be treated similarly for public services based offshore. policy reasons.

MYANMAR SINGAPORE The Ministry of Information regulates advertising across all platforms, including The Media Development Authority is the government regulator for advertising and online. The Media’s Advertising Policy, issued by the Ministry of Information, contains the Advertising Standards Authority of Singapore is an industry body promoting self- numerous prohibitions in respect of advertising content. regulation. The ASAS’ Singapore Code of Advertising Practice is intended to apply to all advertising, including online, however, in practice no rules are applied to offshore In addition to the Media’s Advertising Policy, the recently enacted TV and OTT TV services received in Singapore. Broadcasting Law also contains provisions relating to advertising. For instance, the TV and Broadcasting Law generally limits the amount of advertising by commercial Advertising on pay television platforms is limited to 14 minutes per hour and can TV and Broadcasting businesses to 12 minutes per hour of broadcasts. only comprise up to 25% of a pay television operator’s total revenue.

NEW ZEALAND SOUTH KOREA The pay television industry is largely self-regulated through the New Zealand Korea Communications Commission (KCC) is responsible for broadcast advertising. Advertising Standards Authority (ASA). Despite membership and compliance being The Korean Broadcast Advertising Corporation (KOBACO) remains the sole mediator

86 MULTICHANNEL TV 2016 ADVERTISING REGULATIONS 87 between advertising agencies and the media in respect of pay television platforms All pay television platforms are subject to a cap of 6 minutes of advertising per hour and “internet multimedia broadcasting business operators” under the Internet (averaging 5 minutes per hour per day), but certain satellite channels may be subject Multimedia Broadcasting Business Act. to the higher free-to-air cap if no subscription fee (but rather, a box cost) is payable in respect of the relevant channels. Minutage rules apply, limiting advertising to 20% of any program’s duration, and 17% per program duration on average. There is little regulation of online advertising, other than generally-applicable rules in respect of certain products (eg. alcohol and tobacco) and consumer protection laws. SRI LANKA The Sri Lanka Rupavahini Corporation (a State-owned broadcaster) has adopted VIETNAM a Code of Conduct incorporating standards of practice and the Code of Ethics of All advertising activities in Vietnam are governed by the Law on Advertising, the Accredited Advertising Agencies Association of Sri Lanka. Pay-TV broadcasters including online advertising. are required to comply with this Code of Conduct as a condition of their licence issued by the Ministry of Mass Media and Information. Their licence may also There are various minutage restrictions applicable, depending on the type of contain additional restrictions relating to the nature of advertisements which may be program, as well as non-linear advertising rules. broadcast. Foreign organizations and individuals which do not operate in Vietnam but wish to Advertising on online content services is not regulated in Sri Lanka at present. advertise in Vietnam must enter into a contract with a licensed advertising entity in Vietnam to do so. TAIWAN The Cable, Radio and Television Act governs television advertising. Commercials must be pre-approved by the relevant government department which may require advertisers to comply with additional rules, particularly with regard to the protection of children and women.

Advertising on pay television services is limited to 1/6th of program duration. Advertising on online content services is not yet regulated, although the NCC is considering draft amendments to broadcasting legislation contemplating an extension of regulation to this area. However, some product- and service- specific rules (eg. alcohol, tobacco, pharmaceuticals) apply across all platforms.

THAILAND Advertising is regulated both by legislation (the government regulating authorities are the NBTC and the Consumer Protection Board) and the self-regulating organization, namely the Advertising Association of Thailand (AAT). The AAT’s Code of Ethics sets widely-observed industry standards.

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