BEIJING: Emerging pay-TV markets such as China and India are falling behind mature markets when it comes to building ad and subscription revenues, research from Informa Telecoms & Media has indicated.

The report showed that Asia's two largest nations are only the world's fourth and fifth-largest pay TV markets in terms of revenues, despite being first and second in terms of subscribers.

Informa also said that 394 million homes in Asia Pacific subscribed to some form of pay TV at the end of 2011, a higher total than any other region. Overall TV set numbers are also set to pass the 1bn mark in 2012.

Moreover, annual ad revenues reached an annual regional total of $33.5bn last year, while pay-TV revenues, including subscriptions, contributed an additional $33.1bn.

But in terms of overall market size, the Chinese pay TV sector was equivalent to just 0.12% of the nation's GDP in 2011, compared to 0.41% for Malaysia, the regional leader.

In analysis accompanying the figures, Informa suggested that Malaysia's strong performance was due to the nation's comparatively early transfer to digital TV. This process tends to provide a net boost to subscription revenues by limiting piracy.

Globally, the US remains the largest pay-TV market in terms of revenues – generating around five times China and India's combined total. The two Asian markets exceed the US in terms of subscriber numbers by a ratio of around 3:1.

"The low-ARPUs [average revenue per user] found in India, and particularly China, will continue to limit their revenue-generating capability for the foreseeable future," Adam Thomas, media research manager at Informa, said.

"Much of the region still faces significant piracy and under-reporting problems and these will continue to limit market potential until they are seriously addressed."

Despite these issues, both China and India are predicted to return solid TV adspend growth across 2012.

According to Warc's latest International Ad Forecast, the Chinese TV market, data for which includes free-to-air as well pay-TV stations, will expand by 9.4% this year, while Indian TV adspend will rise 15.3%.

By contrast, the US is forecast to grow by 6% in the same period.

Data sourced from Informa; additional content by Warc staff