Asia Pacific online SVOD revenue increased by 34% to $16bn in 2020

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Asia Pacific online subscription video-on-demand (SVOD) revenues grew by 34% to reach $16.3bn in 2020, with China contributing 58%, according to a report from Hong Kong-based Media Partners Asia (MPA). By 2025, the region’s SVOD revenues are expected to hit $31.3bn.

Outside of China, the Asia Pacific SVOD sector grew by 47% to $6.8bn in 2020 – a year in which many people were spending more time at home during the Covid-19 pandemic – and is projected to reach $15.3bn by 2025. 

Weak advertiser demand resulted in Asia Pacific advertising video-on-demand (AVOD) revenues declining 3% in 2020 to $14.2bn. However, the AVOD outlook is starting to improve with recovery evident in China, India, Korea and Southeast Asia. AVOD revenues are expected to grow 13% to $16.1bn in 2021 and reach $23.2bn by 2025. 

The Asia Pacific online video sector as a whole grew by 14% to reach a combined $30.5bn in 2020, compared to the previous year. SVOD accounted for 53% of total revenues, overtaking AVOD, which contributed 47%. 

MPA estimates that the combined market will grow by 12% to reach $54.5bn by 2025, with SVOD contributing 57% and AVOD accounting for 43%. 

The MPA report – entitled Asia Pacific Online Video & Broadband Distribution 2021 – also stated that 13 OTT operators accounted for more than 70% of total online video revenue in the Asia Pacific region in 2020, including Tencent, ByteDance, Netflix, Amazon, Disney, iQiyi, UNext, Nine, Wavve and PCCW Media. 

Bytedance, Tencent Video and iQiyi remain strong in China and have expanded globally with Tencent Video’s WeTV and iQiyi slowly making inroads into Southeast Asia. Netflix has built a strong business in Asia Pacific, on the back of growing success in Japan, Korea and Australia. Amazon Prime Video is successful in India and Japan and is growing in Australia. 

“During 2020, the Covid-19 pandemic created a work-from-home (WFH) environment that scaled the adoption of online services, including SVOD,” said MPA executive director Vivek Couto.

“The average number of SVOD services subscribed by customers outside of China grew through 2020, reaching 3.8 in Australia and Japan and 2.8 in markets such as India and Southeast Asia. While subscriber growth will decelerate in 2021 and the production of new content will remain impacted in 1H 2021, the scale and velocity of investment in premium content should ensure that net new customer additions will remain robust over the medium term. Moreover, profitability should grow more rapidly than revenues and subscribers as online businesses scale. This is particularly true in larger markets such as Australia, China, Japan and Korea.”

The report also said that Disney’s SVOD expansion in the region has been successful to date, especially in India where revenue per customer is low, but there is potential to secure more than 80 million subscribers if the platform retains key sports rights and continues to invest in local originals. 

The launch of Disney+ Hotstar in Indonesia has also met with early success especially in terms of reach and paid subscribers, while the core Disney+ service has succeeded in Australia and New Zealand and is growing in Japan. 

Southeast Asian regional major Viu has grown its SVOD business with Korean content and local acquisitions. In Indonesia, Emtek’s Vidio has passed 1 million paying subs with premium local content and sports rights. Line TV is Thailand’s largest AVOD platform after YouTube and Facebook.

Several local platforms are competing in Korea including Wavve, TVing, Coupang Play and Kakao TV Talk. In Australia, the most significant local player is Nine Entertainment, which owns and operates two OTT platforms – 9Now (AVOD) and Stan (SVOD). 

In Japan, content from the local traditional broadcasters is key to OTT operators. Major tie-ups include Nippon TV (Hulu Japan and TVer); TV Asahi (Telasa and Abema TV); TBS (Paravi); and Fuji TV (FOD). Meanwhile, U-Next’s SVOD service performed strongly in 2020.