OTT TV and video revenues in the Asia Pacific region are set to rocket to US$18.4 billion over the next five years, up from only US$5.7 billion last year, according to projections from Digital TV Research.
Advertising will be the key revenue source for OTT services, bringing in over US$8.7 billion by 2021, a US$6 billion increase on the figure for last year. China, which is expected to overtake Japan this year to become the OTT market leader in the region, will account for US$4.9 billion in advertising revenues by 2021, with Japan providing US$1.5 billion.
Premium revenues are also set to rise sharply, with SVOD accounting for over US$6.4 billion in revenues in the Asia Pacific region by 2021. China will contribute US$1.8 billion in SVOD revenues, a sixfold increase on its 2015 total, according to Digital TV Research.
Download-to-own revenues are forecast to reach US$1.9 billion in 2021, led by Japan with revenues of US$692 million. This figure represents an increase from US$691 in Asia Pacific download-to-own revenues last year. Finally, OTT TV and video rental sales are expected to reach US$1.3 billion by 2021.
“Smartphone users will continue to drive OTT TV and video audiences. Smartphones are a more important OTT TV reception method than fixed broadband in the Asia Pacific region – with the notable exceptions of Australia and New Zealand,” said report author Simon Murray.
Murray said Netflix “may have to adjust its policy rapidly to secure market share before its rivals become too entrenched” in the region, following its ‘big bang’ 160-territory launch at the start of the year.
While the global SVOD service has achieved success in Australia and New Zealand, said Murray, in other countries its debut was characterized by a lack of local content and a lack of sensitivity to local pricing requirements.
“Major markets such as China, India, Japan and Korea are already dominated by domestic players. South East Asia provides greater opportunities for international platforms,” said Murray.