Currently, advertising is the biggest component of the over-the-top (OTT) TV and video revenue pie in Asia-Pacific. According to estimates from Digital TV Research Ltd., advertisers in the region spent $1.61 billion on the channel last year, compared with $1.03 billion in subscription revenues. But as both figures grow, a switch is expected by 2020, when subscriptions will bring in $4.76 billion and ads $4.35 billion.
The subscriber base is expected to expand dramatically throughout the region during the same period. This year, Japan will have fewer than 10 million households with subscription video-on-demand (SVOD) services. By 2020, that figure will more than double. Even faster rates of increase are expected for China, India, Australia and Indonesia. Only in South Korea will the number of households with SVOD services increase by less than 100% in the next five years.
Earlier estimates, published in January 2015 by Media Partners Asia, called for just $2.3 billion in 2020 SVOD revenues in Asia-Pacific, including Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, the Philippines, Singapore, South Korea, Taiwan and Thailand. That figure does include advertising, which Media Partners Asia believes will account for more than 80% of revenues in 2020.
There’s little question subscription OTT services are on the rise in the region. In Australia, Netflix jumped from nonexistent to 1 million people subscribing in nearly half a million households in just a couple months.
