The Asia-Pacific video industry is on the brink of a transformative expansion, fuelled predominantly by online platforms that are reshaping revenue streams while traditional television encounters notable challenges. According to a report from Media Partners Asia (MPA), the region is projected to experience an influx of $16.2 billion in incremental revenue spanning 14 markets between 2024 and 2029. The report predicts that online video will contribute a remarkable $24.1 billion to this growth, whereas traditional TV is expected to face an $8 billion decline during the same timeframe.
The report identifies six key markets that are expected to drive this growth. India is set to lead, accounting for 26% of the total, followed by China at 23%, Japan at 15%, Australia at 11%, Korea at 9%, and Indonesia at 5%. The decline in traditional TV, particularly evident in markets such as India and Japan, is occurring at a pace faster than previously anticipated. However, MPA’s executive director, Vivek Couto, anticipates a degree of stabilization in the sector in the coming years. "TV channel providers in India generated about $4.5 billion in revenue last year. We see that growing towards $5 billion over the next few years," Couto explained to Variety. "However, the universe has shrunk, and there’s a much more significant transition to streaming.”
The year 2024 has proved fruitful for the streaming sector, especially in India, where Netflix has reportedly established its largest subscriber base in Asia. Couto mentioned, "Streaming had quite an impactful year in India because the subscription business grew." Notably, user-generated content (UGC) and social video platforms are anticipated to capture a substantial share of the new revenue, estimated at $10.7 billion, while subscription video on demand (SVOD) services are expected to contribute $8.4 billion, and premium ad-supported video on demand (AVOD) will generate $5 billion.
UGC and social video platforms are increasingly employing artificial intelligence (AI) for content creation and targeted advertising. Couto stated, “They’re really using these big platforms to leverage AI for content creation, particularly with creators.” YouTube and other platforms are diversifying their revenue sources by introducing Premium subscriptions and shopping features while also experiencing consistent advertising growth.
Currently, advertising constitutes a significant portion of the growth in online video revenue, accounting for 65% of the total, as compared to subscriptions, which contribute 35%. By 2029, the share of advertising is expected to rise to 54% of total video revenue in the Asia-Pacific, increasing from 52% in 2024. This growth trajectory is bolstered by the expansion of advertising tiers across major platforms, with services such as Prime Video rolling out advertising in markets including India, Japan, and Australia. Netflix is similarly targeting markets like Australia, Japan, and Korea for advertising implementation, while local entities benefit from the monetisation of Connected TV (CTV). The anticipated Disney-Jio media merger is also expected to contribute significantly to this area.
The penetration of CTV is projected to soar to 85-90% in Australia, Korea, and Japan by 2029, while India, Indonesia, and Thailand are expected to witness penetration rates between 25% and 50% during the same period. Couto observed, "With CTV growing, you’re going to see a potential acceleration of people trying to program for families. It’s not just about sports or personalized entertainment.”
In the realm of subscriptions, the SVOD landscape has shown impressive growth, with new subscriptions skyrocketing more than sixfold compared to the previous year. Projections estimate an increase from 644 million subscriptions in 2024 to 870 million by 2029, driven by the introduction of ad-supported tiers and an expansion of sports content offerings. Factors such as improving fibre broadband accessibility and rising middle-class incomes in emerging markets are expected to support this growth. “Netflix’s India revenue is currently under 10% of its APAC earnings, compared to over 20% in Japan,” Couto revealed.
Competitive dynamics are changing, with global players like YouTube, Netflix, Meta, Disney, Amazon Prime Video, and TikTok currently commanding 67% of online video revenue outside of China. However, this collective market share is projected to reduce to 62% by 2029 as local services begin to gain traction in markets like India, Indonesia, Japan, Korea, and Thailand.
Additionally, industry consolidation is gaining momentum, especially in Korea, Japan, and Indonesia. Couto asserted that signs of profitability are beginning to emerge among key players in Japan, a trend anticipated to extend to India and Indonesia over the next three years, resulting in standalone profitable streaming businesses.
Another facet emerging in the video landscape is retail media, which is poised to present both challenges and opportunities. Couto remarked, “Apart from CTV, retail media is the big thing. It’s accounting for as much as 50% of new growth over the next four to five years in markets like China, India, Indonesia, Japan, and South Korea.” Local competition remains robust, as evidenced by platforms like TVING in Korea which are reportedly providing stiff competition to Netflix. Maintaining profitability is a crucial focus for businesses throughout the Asia-Pacific region as market dynamics continue to evolve.
Source: Noah Wire Services