The total revenue for online video services across 13 countries in Asia Pacific will grow at a CAGR of 23.5% to reach $12.4 billion by 2020 from $3.5 billion in 2014, according to Media Partners Asia.
The MPA also said in a new report that advertising will contribute more than 80% to the online video pie by 2020 with the subscription revenue opportunity, largely driven by subscription video-on-demand (SVOD) platforms, growing from less than $700 million in 2014 to more than $2.3 billion by 2020.
“The market for the legal consumption of OTT services in Asia Pacific is at an early stage with monetization models nascent in most countries,” said MPA executive director Vivek Couto.
“As barriers to entry reduce and broadband penetration increases, more disruptors are emerging and host of new platforms are proliferating, though business models are not always scalable and issues such as piracy, content, and platform operation remain problematic,” said Couto.
MPA projections indicate that by 2020, fixed broadband penetration level will reach 40% as household subscriptions grow to 403.5 million.
Mobile broadband will grow rapidly, expanding at CAGR of 15% to reach almost 2 billion subscriptions by 2020 (58% penetration of population).
Also, active Asia Pacific OTT video subscribers reached 494 million in 2014, according to MPA. China accounted for more 85% of the market size in 2014 and will represent 80% by 2020.
The market for subscription-based OTT video reached 75.3 million active subs in 2014 and is expected to reach 225 million by 2020. China will be the largest contributor, driven by internet-enabled TV and set-top box platforms and online video companies offering premium services.