REGIONAL FORECAST REPORT OTT VIDEO IN EMERGING ASIA PACIFIC: TRENDS AND FORECASTS 2017 2022 MARTIN SCOTT AND ROMAN ORVISKY
About this report This report provides: forecasts for the number of premium OTT video users, spend and average spend per user (ASPU) forecasts split by category of OTT video service linear channels, linear events, TVoD (rental), TVoD (ownership) and SVoD forecasts for six individual countries, and emerging Asia Pacific as a whole an overview of the trends and drivers in the market. WHO SHOULD READ THIS REPORT Product and strategy managers within OTT providers, pay-tv operators and telecoms operators who require market sizing for business planning purposes, as well as an overview of key trends affecting the market to help them to develop propositions accordingly. Business development managers within vendors of video solutions who need to assess the size of the opportunity for their products and services. Financial analysts who need to understand the dynamics and size of the OTT video market. Geographical Regions and countries modelled: China India Indonesia Malaysia Philippines Thailand The emerging Asia Pacific region as a whole. REPORT COVERAGE Key performance indicators Users/subscribers Population penetration Spend ASPU All of the above split by the following categories of OTT video service: Linear channels (paid-for and free) Linear events TVoD rental TVoD ownership SVoD (paid-for and free) Also split by device type: Smartphone Tablet PC TV set (including STB, smart TVs, consoles and other streamers) 2
Contents 5. Executive summary 6. Paid-for OTT video services worth will increase from USD7.6 billion at the end of 2017 to USD21.3 billion by 2022 7. How we classify services in this forecast 8. SVoD services will account for almost three quarters of all retail revenue growth between 2017 and 2022 9. China may drive regional market trends, but many other countries will have stronger growth rates 10. Key recommendations for TV and video stakeholders 11. Regional forecasts and country comparison 12. Worldwide: Emerging Asia Pacific accounted for 43% of the world s premium OTT users in 2017 and will account for 49% by 2022 13. EMAP: Outside of China, only around half of the 167 million users of premium OTT video services in EMAP will pay for them directly in 2022 14. EMAP: B2B2C models will drive OTT use in the region; OTT linear channels will also become popular 15. EMAP: Regional trends are driven by China, which will account for 57% of premium OTT video users by 2022 16. Country forecasts 17. China: OTT players will try to convert ad-supported services to paid live and SVoD subscriptions; they will succeed with SVoD 18. India: ASPU will remain diluted by non-paying users but premium OTT will reach 86 million users by 2022 19. Indonesia: Many consumers take multiple services and live streaming services are popular, but the average spend is low 20. Malaysia: Penetration will match that in China by 2022, driven by a mixture of linear and SVoD services 21. Philippines: Growth, from a low base, will be stimulated by iflix and Tribe, but ASPU will remain low 22. Thailand: Piracy has prompted operators to launch device-centric multi-ottpartner bundles 23. Forecast methodology and assumptions 24. Our spend forecasts focus on the direct flow of money between consumers and OTT video providers 25. About the authors and Analysys Mason 26. About the authors 27. About Analysys Mason 28. Research from Analysys Mason 29. Consulting from Analysys Mason 3
List of figures Figure 1: OTT video retail revenue by service type and blended ASPU, EMAP, 2013 2022 Figure 2: OTT video retail revenue growth by service type, EMAP, 2017 2022 Figure 3: OTT video retail revenue growth and user growth by country, emerging Asia Pacific, 2017 2022 Figure 4: SVoD, TVoD and linear share of retail revenues for OTT video, and premium OTT video user penetration, worldwide by region, 2022 Figure 5: OTT video retail revenue by service type and blended ASPU, EMAP, 2013 2022 Figure 16: Retail revenue for OTT video service types, Malaysia, 2015 2022 Figure 17: Key information, Malaysia, 2017 Figure 18: Retail revenue for OTT video service types, Philippines, 2015 2022 Figure 19: Key information, Philippines, 2017 Figure 20: Retail revenue for OTT video service types, Thailand, 2015 2022 Figure 21: Key information, Thailand, 2017 Figure 22: Scope of our premium OTT video spend forecasts Figure 6: OTT video users and growth rates by service type, EMAP, 2017 2022 Figure 7: OTT video spend and growth rates by service type, EMAP, 2017 2022 Figure 8: OTT video users and ASPU by business model, EMAP excluding China, 2013 2022 Figure 9: SVoD, TVoD and linear share of retail revenues for OTT video, and premium OTT video user penetration, emerging Asia Pacific, 2022 Figure 10: Retail revenue for OTT video service types, China, 2015 2022 Figure 11: Key information, China, 2017 Figure 12: Retail revenue for OTT video service types, India, 2015 2022 Figure 13: Key information, India, 2017 Figure 14: Retail revenue for OTT video service types, Indonesia, 2015 2022 Figure 15: Key information, Indonesia, 2017 4
Paid-for OTT video services worth will increase from USD7.6 billion at the end of 2017 to USD21.3 billion by 2022 Figure 1: OTT video retail revenue by service type and blended ASPU, EMAP, 2013 2022 1 The widespread availability of high-speed data, both fixed and mobile, is driving a revolution in the consumption of TV and video content. In China, massive OTT players such as Alibaba, Baidu and Tencent will compete for OTT SVoD subscribers. In other parts of emerging Asia Pacific (EMAP), partnerships between OTT providers and telecoms operators will stimulate subscriptions. Retail revenue, paid directly by consumers to OTT video providers, will exceed USD21 billion by 2022. There are three major categories of business model for OTT video which relate to three different funding models. These are: B2C models, where consumers pay an OTT provider directly for access to content, either on a subscription or one-off basis B2B2C models, where operators pay OTT providers to offer their service as part of a bundle of telecoms and media services advertising-funded models, where OTT providers offer services for free to consumers and then generate advertising revenue. This report forecasts the number of subscribers for the first two models (which we refer to as premium OTT video services ), and the volume of retail revenue (spend) for B2C models. 1 Blended ASPU in this context equals total retail revenue for premium OTT services divided by the total number of premium OTT video users. Due to the complexity of a single user being able to use, and pay for, any combination of SVoD, TVoD and linear services, our definitions for total blended ASPU and those for SVoD and linear channels differ. The number of users included in our blended ASPU figure includes users of B2C and B2B2C services; the retail revenue includes only B2C revenue. For this reason, in countries or regions with a large contingent of B2B2C users of premium OTT services, blended ASPU dips as non-paying users dilute the figure. For SVoD and linear channels categories we are able to clearly separate the number of users that pay directly for services and for this reason our SVoD and linear channels ASPUs reflect the average spend for paying B2C customers only. 6
CONTENTS EXECUTIVE SUMMARY REGIONAL FORECASTS AND COUNTRY COMPARISON COUNTRY FORECASTS FORECAST METHODOLOGY AND ASSUMPTIONS ABOUT THE AUTHORS AND ANALYSYS MASON 25
About the authors Martin Scott (Principal Analyst) co-ordinates Analysys Mason s research initiatives related to media, TV, fixed broadband and convergence. He manages the Video Strategies and Fixed Broadband Services research programmes. Martin has held numerous positions within Analysys Mason during the last 13 years, including heading the company's Consumer Services, Data and Regional Markets practices. He also launched Analysys Mason's Connected Consumer Survey and Consumer smartphone usage series of research. His areas of specialisation include telco TV strategy, OTT video and media, consumer smartphone usage, the bundling and pricing of multi-play services, including quadruple-play bundling, customer satisfaction and consumer-facing marketing strategy. He also specialises in statistics, surveys and the analysis of primary research. Roman Orvisky (Analyst) is a member of the regional markets research team in London, contributing to the Telecoms Market Matrix, European Core Forecasts, European Country Reports and Global Telecoms Forecasts programmes. Prior to joining Analysys Mason in November 2014, he worked in the Transaction Services department of the Royal Bank of Scotland in a customer experience internship role. During his studies, Roman focused on consumer behaviour in an online context, and has experience in churn modelling in the telecoms sector, social network analysis and browsing data analysis. Roman holds a Bachelor s degree in business from Durham University, and an MSc in marketing research from the Tilburg University School of Economics and Management. 26
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Research from Analysys Mason 28
Consulting from Analysys Mason 29
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