SINGAPORE: Online video revenues in 14 markets of Asia-Pacific are expected to grow almost threefold from around $13bn in 2016 to $35bn in 2021, a new report has predicted.
Driven largely by China, that represents an annual growth rate of 22% and reflects the rapid penetration of broadband in the region, according to research firm Media Partners Asia (MPA).
China is expected to account for three-quarters (76%) of all online video revenue in Asia Pacific by 2021, but the report also noted that Japan, Australia, Korea and India will be important markets with an aggregate 17% share, IndianTelevision.com reported.
Online video advertising, which accounted for less than 15% of Asia-Pacific adspend in 2015, is expected to see its share grow to 22% in five years' time.
That means online video sales will be worth $22bn in 2021, up from $9bn in 2016, after recording a compound annual growth rate (CAGR) of 19%. China is forecast to take a huge 70% of these video ad sales.
By 2021, China is also expected to account for 80% of the rapidly developing subscription video on demand (SVOD) market, which is expected to grow from 177m paying customers to 360m across the region.
When translated into revenues, MPA said the Asia-Pacific SVOD market will be worth $13bn by 2021, after recording 28% CAGR from $3.7bn in 2016.
MPA also forecast that Asia-Pacific broadband subscriptions will reach 345m this year and then grow to 425m by 2021.
Elsewhere, average broadband household penetration is expected to grow over the same period from 35% to 41% while mobile broadband is forecast to reach nearly four-in-ten (79%) of Asia-Pacific consumers.
"The growth of broadband, combined with slow but progressive change in content licensing, is driving demand for online video services," said Vivek Couto, MPA's executive director.
Data from Warc's Global Adspend Outlook 2016/17, a free summary of future ad investment trends, show that mobile is a strong driver of total video growth in the region.
In China, mobile's share of total video adspend is expected to approach 50%, up from a share of just 20% in 2014. Chinese mobile video adspend reached a record RMB8.9bn (US$1.4bn) in 2015, the report notes.
Data sourced from IndianTelevision.com; additional content by Warc staff