Subscription video on demand faces opportunities and challenges in APAC, says Media Partners Asia study

Wireless broadband will see a significant bump, from 32% penetration in 2016 to 63% penetration in 2022. Fixed broadband however will see a slower growth but higher quality (i.e. fibre optic), only up 3% from 22% penetration in 2016 to 25% in 2022.

Such developments will help propel subscription video on demand (SVOD) in the region, with a projected compounded annual growth rate (CAGR) at 16.1% for direct subscribers and 16.7% for indirect subscribers from 2017 to 2022.

Revenue growth however is set to be tempered at 15.2% CAGR in the same period. Online video advertising on the other hand is set to outpace revenue at 17.4% CAGR from 2017 to 2022, on the back of Facebook and YouTube.

The study spoke to 15,000 respondents aged between 18 and 64 from eight countries such as Australia, Hong Kong, Indonesia, Malaysia, Philippines, Singapore, Taiwan and Thailand.

VOD (excluding YouTube) usage among the eight countries varied wildly, from Hong Kong having the most people using VOD at 72%, using on average of 5.7 VOD services, to the lowest in Indonesia at 10% and using an average 1.5 VOD services.

Australia was the second highest (56%), with an average of 2.4 VOD services used, followed by Singapore at 54% and 1.9 VOD services used. Taiwan (35%, 1.8 VOD services), Malaysia (33%, 1.6 VOD services), Thailand (31%, 1.5 VOD services) and Philippines (27%, 1.5 VOD services) ranged in the middle.

Piracy still sees some support in the region, with consumers having access to “unofficial” Internet-enabled streaming boxes. The highest was in Hong Kong where 35.5% of respondents were considering (10.9%), already using someone else’s (12.5%) or already owned one (12.1%). Second was Malaysia at 27.7% of respondents considering (13.6%), already using someone else’s (5.8%) or owned one (8.2%). Singapore was third at 21.7%, with 10.5% considering, 5.2% using someone else’s and 6% owning one.

Taiwan (20%) and Thailand(18.1%) saw an inverse flip between owning and considering, with more respondents already owning a set (Taiwan 9.2%, Thailand 8.5%) than considering one. (Taiwan 6.5%, Thailand 5.1%). Australia (6.2%), Indonesia (6.7%) and Philippines (6.1%) were the lowest.

When it came to using pirated streams for live sports, Thailand took the lead at 49%, with Philippines a close second at 46%. Taiwan (43%) and Hong Kong (41%), were the only other countries crossing the 40% threshold. Malaysia (29%), Singapore (23%), Indonesia (15%) and Australia (9%), saw significantly less use of pirated streams.

This may be in part due to efforts by service providers claimed Vivek Couto, executive director, Media Partners Asia in a round table organised by Ooyala.

“They’ll be tackling these guys, the syndicates with the android boxes and so on, that’s happened in the last month, there’s also talk about site blocking as well,” said Couto.

While piracy has gone down in the US with the growth of legally available content, it may seem to have swung in the opposite direction in Asia. The growth of legally available content has not stopped Singapore from being ranked among the top 10 countries per capita which pirate content. Couto however believes that piracy is not the only challenge that SVOD players face.

“Last year it was all about churn to pirate sites, this year it’s more about people churning to free TV and YouTube. The launch of StarHub Go (a streaming service by telco StarHub) is a step in the right direction, because it improves the customer experience, and provides content at the customers fingertips,” said Couto.

“Improving the legal thing is one bit but also doing industry lobbying is another bit,” he added.