Market overviews 2015 - Asia Pacific

The Asia-Pacific (APAC) region is home to more than half (50.2%) of the world’s TV households. The vast number of TV homes in China (430 million), India (169 million), Indonesia (64 million) and Japan (52 million) means developments within the APAC TV markets are likely to affect the global TV sector.

Cable, IPTV, satellite, and terrestrial technologies are all present in APAC, some of which are still in analogue form. The largest TV platform is cable. Over 360 million TV households (or 50.4% of TV homes in the region) by the end of 2014 rely on cable for their primary reception of a television signal. The digitization of cable TV has progressed while the rate of digitization has increased roughly one out of seven cable households is analogue. Governments in the region expect total digitization of the cable TV platform before end-2020

Japan has fully digitized its cable TV network while in China the digitization at the end of 2014 has reached 80% of cable TV homes. In India, the Ministry of Information and Broadcasting is implementing a four-phase strategic plan for the total digitization of the cable TV platform. In phase one, the digitization of the networks covering the four largest metropolitan areas of the country (Mumbai, Delhi, Kolkata and Chennai) was successfully completed by December 2013. In phase two, the digital conversion of the networks in 38 large urban areas was successfully completed by December 2014. After the first two phases, around 30% of cable TV homes had been converted to digital. Phases 3 and 4 will be complete by the end of 2016 according to the MIB plan. It will be a big challenge to meet this deadline as these phases comprise the conversion of smaller urban and rural networks across India.

Satellite is the primary method of reception for 224 million TV households. The platform is 100% digital. One-third of satellite TV homes (66 million) subscribe to a pay TV offer. More than 800 FTA channels are broadcast via satellite in China, while a similar number of FTA channels broadcast via satellite in India. A substantial challenge for the pay TV satellite operators will be to lure analogue cable subscribers to upgrade to their services. In more mature television markets pay satellite has benefited from the digitization of the terrestrial and cable platforms, we expect a similar trend in the APAC countries.

The terrestrial platform is the third largest in the APAC region. At the end of 2014, 85 million TV households relied exclusively on terrestrial reception. Three-quarters of these terrestrial households (63 million) still receive an analogue terrestrial TV signal, while the remaining 22 million are digital terrestrial television (DTT) households. The digitization of the terrestrial TV platform in the APAC region has progressed with an unequal rhythm across the region. Countries such as Japan, South Korea, Australia, New Zealand and Taiwan have already completed the analogue to digital switchover, while the vast majority of other APAC countries are not expected to complete the switchover before 2020.

Japan planned to shut off all analogue terrestrial TV stations by July 2011 but the Fukushima earthquake resulted in an extension of the deadline up to March 2012 when the transition was successfully completed. Shortly after the earthquake,

Although the digitization of the terrestrial platform was a priority for Australia, Japan, New Zealand, South Korea and Taiwan, this has not been the case for other APAC countries including China, India and Indonesia. The Indian government’s priority is to digitize the cable platform, leaving the terrestrial platform in analogue mode at least until the end-2018.

For many Asian governments, the most delicate issue in the implementation stage of the Digital Transition is finding the necessary financial resources for subsidizing the purchase of DTT receivers by the viewers. Some countries have chosen to offer support for low-income households in the form of subsidizing the purchase and installation of an antenna and DTT set-top box:

Malaysia and Vietnam plan to subsidise DTT receivers to around 2 million low-income homes
Singapore will support around 160,000 households.
Thailand will issue coupons for the purchase of a DTT set-top box to each one of the country’s 22 million households. Each coupon is worth $22 and the total cost of the programme has been estimated to be around $495 million. However, by the end of 2014 only 3 million coupons have been used.

IPTV is the fourth largest TV platform in APAC. At the end of 2014 around 48 million households were subscribing to an IPTV service. This figure represents 6.67% of total pay TV homes. Other APAC countries with IPTV networks are Taiwan, Singapore, Malaysia, India, Indonesia and Thailand. Part of the success of the IPTV platform in the region is due to the migration of analogue cable subscribers to IPTV.

China Key facts – 2014

Population: 1.37 billion
Households: 483.0 million
TV Households: 430 million
Pay TV Penetration: 63%
Broadband Penetration: 45%
Mobile Penetration: 94%

TV Ad revenue: €26.5 billion

China — platform overview 2014
	Pay subs (‘000)	Free subs (‘000)	Platform digitization (%)
Terrestrial	0	24,814	20
Satellite	0	136,500	100
Cable	234,000	0	79
IPTV	34,400	0	100
Total	268,400	161,314	84

China accounts for one third of the world’s total TV households. Chinese viewers have access to a large number of TV stations; over 2,780 were in operation at the end of 2014.

From the early 1980s, the provision of television to every Chinese household became a priority for the government and, as a result of targeted funding by state bodies and banks the progress of the TV network roll-out was fast: by 1985 more than two-thirds of the population had access to TV. The 1990s saw the introduction of satellite and the first foray into pay TV.

Digitization of the TV distribution platforms has progressed substantially. Nearly 85% of the country’s TV households were receiving digital TV broadcasts by the end of 2014. This is largely due to the swift digitization of the cable TV platform as over 80% of cable TV households were digital at the end of 2014. The digitization of the terrestrial platform, the only other TV distribution platform apart from cable which is still broadcasting an analogue signal, is progressing with a slower pace. The current target for analogue switch-off in China is 2018.

The public service broadcaster of China, China Central Television (CCTV), has the largest number of FTA channels offered by a single operator in the country, at 23, of which some are broadcast in foreign languages (English, French, Spanish, Russian and Arabic). The flagship channel of CCTV, CCTV 1, is a general entertainment channel which is almost always at the top of TV ratings listing in the country. Other popular non CCTV-controlled channels in China are channels owned by provincial governments, such as Hunan TV, Jiangsu TV, Zhejiang TV, Beijing TV and Dragon TV (Shanghai).

Cable is the largest TV platform in China — cable households form around 54% of the total number of TV households. Cable TV in China is seen more as a utility rather than as a pay TV service. Each region and major city in China has cable TV provided by a single regional operator, meaning the market as a whole is largely fragmented. Cable networks in China are still largely one-way networks, which limits the growth of interactive and on-demand services that can be offered.

The digitization of cable infrastructure has been rapid, primarily because the government had adopted a “Cable First” strategy, which subsidized the purchase of cable set-top boxes to speed up the digitization process.

Satellite is the second largest TV platform in China. The entire platform is digital with 700 free to air channels. In 2006, the Chinese government founded the China Direct Broadcast Satellite Corporation (CDBST). The main goal of the state-owned satellite company was to create the first satellite operator in China which would plan and launch a number of direct broadcasting satellites for TV broadcasting in the country. The first of these satellites was Chinasat-9 which successfully launched in 2008. In 2014, CDBST was managing a fleet of seven direct broadcasting satellites of which five are used for TV broadcasting.

Digital terrestrial is not yet fully developed in China. Because the government has prioritized the digitization of the cable platform only a handful of channels, all from the state broadcaster CCTV, are available in the analogue terrestrial platform in rural and remote areas of the country. China has been planning the digital transition since early 2000. It developed its own digital terrestrial broadcasting standard called DTMB in 2004, which became an official DTT standard in 2006. The second part of the digital transition plan saw CCTV embark on converting more than 18,000 transmitter sites (towers) from analogue to digital. By comparison, 1,154 transmitter sites were converted to DTT in the UK. The DTT network is unable to cover 100% of the Chines population, which has forced the government to devise a plan where around 10% of the population will be served by a satellite service in a similar way to FreeSat in the UK or Tivusat in Italy. China plans to switch off analogue terrestrial broadcasting in 2018.

China’s first IPTV services were launched in the country’s major cities during the fourth quarter of 2006. Telecom operators offer IPTV as a bundled service which is a key reason as to why China boasts the world’s largest IPTV subscriber base.

India Key facts – 2014

Population: 1.29 billion
Households: 264.9 million
TV Households: 168 million
Pay TV Penetration: 80%
Broadband Penetration: 7%
Mobile Penetration: 74%

TV Ad Revenue: €2.3 billion

India — platform overview 2014
	Pay subs (‘000)	Free subs (‘000)	Platform digitization (%)
Terrestrial	0	30,458	0
Satellite	50,764	3,120	100
Cable	84,210	0	49
IPTV	203	0	100
Total	135,177	33,578	56

India has a multi-faceted FTA television market. While the public service broadcaster, Doordashan, offers over 21 channels (broadcasting in 11 different Indian languages) its popularity is confined to the rural and semi-rural areas of the country. The most popular FTA channels are those offered by the three largest Media Groups of India: STAR India (offering 48 channels in eight languages), Zee Entertainment Enterprises (offering 33 channels in eight languages) and Viacom18 Media Pvt Limited (offering 15 channels). The commercial channels primarily offer the three most popular content genres in India: fictional entertainment (mainly Indian and US TV series), Bollywood movies and reality shows.

Nearly 63% of homes in India had a TV set by the end of 2014. For many Indian families living in rural and even semi-rural areas the possession of a TV set is a luxury. Having said this, India is a television powerhouse exporting TV programming to neighbouring countries with large subcontinental diaspora.

The growth of TV accelerated in the 1990s with the deregulation of the broadcasting sector, allowing the launch of non-government controlled channels, and the steady roll-out of cable and satellite TV networks. Pay TV services were introduced around the same time and foreign broadcasters such as Rupert Murdoch’s STAR TV Network, MTV, and BBC gained a foothold in the vast market. More than 2,000 channels are now available in the Indian television market via cable and satellite platforms.

At the end of 2014, 56% of TV households received digital signals. Cable digitisation is scheduled for completion by the end of 2016. The terrestrial platform remains analogue and there is the risk that India might not be able to implement the switchover by the end of the decade. Although India has a high proportion of pay TV customers, many of these homes receive cable TV via illegal transmission. The satellite platform is beset with similar piracy problems, with around 15% of reported satellite subscribers receiving signals illegally.

Cable is the largest TV platform in India, serving 50% of TV households in 2014. Digitization of cable infrastructure is a substantial undertaking due to the size and the complexity of the cable market in India. There are more than 60,000 local cable operators and 6,000 operators of multiple cable systems. The Indian government’s main aim in digitising cable is to increase tax revenues by gaining greater accuracy regarding the number of paying cable subscribers.

The government’s plan to digitize cable is split into four phases: Phase 1 focused on the four largest metropolitan areas of India: Mumbai, Delhi, Kolkata and Chennai. Phase 2 targeted cities with a population of greater than 1 million people. Phase 1 and 2 were successfully completed in December 2014. At the end of phase 2, around 30% of cable TV homes were converted to digital. Phases 3 and 4 target the rest of the country and are set for completion by the end of 2016. The largest cable TV operators in India at the end of 2014 were Hathway Datacom DEN Networks and SITI Cable Network

Satellite is the second largest platform in India, accounting for 32% of TV homes at the end of 2014. The satellite platform, which is entirely digital, was the first TV platform in India with foreign broadcasters and operators into the market. The largest satellite pay TV operators at end-2014 were: Dish TV, Tata Sky and Airtel Digital.

The terrestrial platform remains analogue. The prioritisation of cable digitization has delayed the conversion of analogue terrestrial to digital. Only 23 of 630 transmitters had been converted from analogue to digital by the end of 2014. The Indian government has committed to complete the switchover by the end of 2017. The sole broadcaster on the terrestrial platform is state-owned Doordarshan.

Japan Key facts – 2014

Population: 127.1 million
Households: 52.7 million
TV Households: 52.1 million
Pay TV Penetration: 69%
Broadband Penetration: 92%
Mobile Penetration: 122%

TV Ad Revenue: €10.6 billion

Japan — platform overview 2014
	Pay subs (‘000)	Free subs (‘000)	Platform digitization (%)
Terrestrial	0	6,629	100
Satellite	5,981	9,473	100
Cable	26,323	0	100
IPTV	3,785	0	100
Total	36,089	16,102	100

NHK is the public service broadcaster in Japan, broadcasting four channels (two on the terrestrial platform and two via satellite) for the Japanese viewers as well as an international TV service, NHK World. The four domestic NHK channels are three general entertainment channels (NHK General TV, NHK BS-1 & NHK BS-Premium) and one educational channel, NHK Educational TV. The largest commercial FTA TV operators in Japan are TV Asahi Corporation, Fuji Network System, Tokyo Broadcasting System Television, Nippon Television Network Corporation and TX Network. The most popular content genre in Japan is general entertainment.

The TV infrastructure in Japan is digital. The last platform to be converted from analogue to digital was cable in 2014. The satellite platform was converted in 2011 following pay DTH operator Wowow’s conversion of its subscriber base in Q2 2011. . Around 69% of Japanese TV households subscribe to a pay TV service while around 16 million homes view FTA TV broadcasts.

At the end of 2014, 26 million homes in Japan were primary cable households. Around 65% of cable TV households incur a small retransmission fee to receive FTA TV broadcasts via cable whilst the remaining 35% subscribe to a traditional pay TV service. Digitization of cable started in the mid-2000s, and 100% of cable subscribers converted to digital by the end of 2012. The largest cable TV network in the country, J:COM, is also the largest pay TV operator. At the end of 2014 J:COM served approximately 4 million customers. The second largest cable network, VIC TOKAI, reported around 400,000 subscribers.

At end-2014, the satellite platform is the second largest in the country with over 15 million households. Around 9 million satellite TV households only watch FTA channels with around 6 million households subscribing to a pay satellite operator’s offer at the end of 2014. The largest pay satellite operator is Sky Perfect JSAT with 3.4 million subscribers followed by Wowow with 2.8 million.

The Japanese government planned to switch off its analogue terrestrial signal and move solely to its home-grown ISDB-T standard in July 2011. This was extended to March 2012 in regions most affected by the 2011 Fukashima earthquake. At end-2014. 6.6 million households were receiving DTT on their primary TV set. There is no paid DTT platform.

The largest IPTV operator is NTT Plala with 3 million subscribers at the end of 2014 followed by KDDI with 455,000 subscribers.

Australia Key facts – 2014

Population: 23.7 million
Households: 9.1 million
TV Households: 9.1 million
Pay TV Penetration: 32%
Broadband Penetration: 75%
Mobile Penetration: 131%

TV Ad Revenue: €2.6 billion

Australia — platform overview 2014
	Pay subs (‘000)	Free subs (‘000)	Platform digitization (%)
Terrestrial	0	6,096	100
Satellite	1,727	111	100
Cable	907	0	100
IPTV	222	0	100
Total	2,856	6,207	100

The Australian Broadcasting Corporation (ABC) is the country’s public service broadcaster offering five FTA channels (three general entertainment channels, one news channel and one children’s channel). The most popular FTA broadcasters are the commercial TV channels of Seven Network, Nine Network and Network Ten. Seven Network is the most popular channel in Australia receiving the highest ratings over the last three years. Nine Network is also popular among audiences primarily owing to rugby coverage. Finally, Network Ten is the third most popular FTA channel in Australia (ranking ahead of ABC) offering general entertainment content and current-affairs programming.

Australia has a high TV set penetration rate (99%) and has successfully converted its entire TV infrastructure to digital. Approximately 2.9 million homes pay for subscription TV. The major FTA broadcasters in the country are the public service providers, ABC and SBS, and the three major commercial free-to-air TV networks, Seven, Nine and Ten.

The terrestrial platform is the largest TV distribution platform in the country, with more than 6 million households exclusively watching terrestrial TV. Australia’s digital transition plan closely followed the UK model, creating a body to act as a liaison between the government and the broadcasters in order to speed up the implementation of the digital switchover process. The first areas to shut off the analogue signal were regions in South Australia in 2010 while the final area to terminate analogue terrestrial broadcasting was Kalgoorlie, a remote town in Western Australia in December 2013.

Cable TV is primarily available in Australia’s large metropolitan areas. Many of the early cable TV operators in Australia struggled financially due to the large infrastructure cost associated with laying cable over such a vast area to reach relatively few subscribers. With its combined cable and satellite subscriber base of around 2.5 million at 2014, Foxtel is Australia’s largest pay TV provider.

Around 1.8 million homes connect to the satellite platform TV in Australia. The majority of satellite TV households (1.7 million) subscribe to pay TV, with a further 111,000 homes using free to air services.

IPTV connects around 220,000 homes and the largest operator is Malaysian-owned Fetch TV, which had around 77% of the IPTV platform by the end of 2014.

Vietnam Key facts – 2014

Population: 90.6 million
Households: 26.8 million
TV Households: 23.0 million
Pay TV Penetration: 29%
Broadband Penetration: 29%
Mobile Penetration: 150%

TV Ad Revenue: €929 million

Vietnam — platform overview 2014
	Pay subs (‘000)	Free subs (‘000)	Platform digitization (%)
Terrestrial	0	11,300	9
Satellite	2,260	448	100
Cable	4,420	4,580	28
IPTV	0	0	0
Total	6,680	16,328	0

The state broadcaster Vietnam Television (VTV) is the largest broadcaster in the country operating nine FTA channels. Of these channels six broadcast general entertainment content and three thematic (science & technology, sports, youth), while three general entertainment channels broadcast in HD. Additionally, there are three national channels operated by the Vietnam Multimedia Corporation (a company owned by the Ministry of Post and Telematics) and 63 regional TV stations.

Nearly 86% of homes in Vietnam own a TV set. Digital TV covers only five major cities and their surrounding areas, whilst three-quarters of the country still receive analogue TV signals. Just under 6.7 million TV homes subscribed to a pay TV service by the end of 2014.

Terrestrial is the primary platform used for TV viewing in Vietnam with 11.3 million households tuning in at the end of 2014. The switch to DVB-T is set to occur through four phases between 2015 and 2020. DTT is currently available to 2.9 million homes in five major cities but the government has committed to subsidizing the purchase of DTT receivers for 2 million low-income households in an attempt to speed up the transition to DTT. Analogue terrestrial is still the dominant platform in the country with almost 8.4 million connected homes at the end of 2014. Vietnam plans to shut off its analogue terrestrial networks in 2020.

Around 9 million homes were connected to cable in 2014. Cable infrastructure is largely analogue with only 10% of cable networks digitized. VTV operates the largest cable TV network in the country whilst the largest satellite operator in Vietnam is state-owned VTC which offers both FTA and pay TV services.