SINGAPORE: The pay TV market in Vietnam is predicted to grow 60% over the next four years with advertisers expected to follow, attracted by a combination of a young demographic and an expanding middle class.

Media Business Asia noted that of the 20m or so TV homes in the country, less than one quarter currently subscribed to pay-TV but it forecast penetration would increase at a compound annual growth rate of 7.9% between 2012 and 2017.

Those figures have attracted the attention of Multi Channels Asia (MCA), a Singapore-based channel distributor, which recently announced a joint venture with Thaole Entertainment, a Vietnamese television content provider, to establish Multi Channels Vietnam. This will handle distribution for channels such as Bloomberg Television, ITV Choice, the Outdoor Channel and Motorvision.

MCA envisaged ad sales being the core revenue driver in the long term, with subscriber fees being traded for a broader reach.

"There is an advertising opportunity in Vietnam, although that pot of gold is at the end of a very long rainbow," MCA managing director Gregg Creevey told Media Business Asia. "Meaningful advertising revenue is two to three years off," he added.

He further noted that the Vietnamese market was more tightly regulated than it had been a few years ago. For example, in addition to the process of acquiring a content licence there were now rules requiring foreign content to be vetted by a local partner.

But, said Crevey, "that has not stopped the demand for quality pay TV content, or quelled the interest of international channels wanting to enter the market".

For Thaole Entertainment, director Linh Hong Phan claimed "there are not many markets in Asia that offer the same opportunities as Vietnam", thanks to the country's young demographic profile and growing middle class.

Potential advertisers might also note a recent study from the Eden Strategy Institute in Singapore which found that the country's emerging middle class were most concerned about losing their health and, if their income were doubled, would most likely save the extra money.

Data sourced from Media Business Asia, MCA: additional content by Warc staff