The online video business across the AsiaPac region will generate USD 46 billion in revenues by 2022, with more than 75 percent of that coming from China, according to Media Partners Asia (MPA).

The data was released in MPA’s new Asia Pacific Online Video & Broadband Distribution report. It estimates the region’s online video revenues will rise by a compound annual growth rate (CAGR) of 21 percent between this year and 2022.

China continues to be the leading online video market in AsiaPac, with 85 percent of the region’s SVOD customers and 78 percent of online revenues by 2022. The factors driving this dominance are increased investment in original and acquired content, a weak traditional pay-TV market, improving broadband reach, greater content consumption on internet-enabled devices and a reliable payment infrastructure. In China, advertising remains the dominant model for online video revenues, but subscription revenues’ share is set to reach 33 percent this year.

Outside of China, MPA lists Japan, Australia, India, Korea and Taiwan as the best markets for online video, thanks to robust payment infrastructures, the increase in the number of ad-funded local content platforms and a steady growth in premium, subscription-based global and local platforms. Hampering growth in Southeast Asia are two key factors: piracy and the lack of reliable payment mechanisms. Telcos are seen as key to the region’s online video market.

“Advances in telecoms and payment infrastructure continue to point the way forward for the online video sector in Asia Pacific, though business models and regulations continue to evolve in a sector that is still young and nascent in most territories,” said Vivek Couto, executive director of MPA.

In Asia’s increasingly crowded online video space, Couto says that the companies and markets rising to the top are “anchored to nimble, robust and sustainable business models, built around strong execution and scalable content consumption.”

He also points to the rising importance of local and Asian content, noting that “recent window, franchise based-Hollywood product,” is also faring well. Original content, movies, kids and sports fare are becoming more important to platforms, he said.

Couto added, “Content curation, packaging and pricing remain critical, along with brand equity. Telecom operators, which have been focused on either paid conversion or mass reach to drive value, are increasingly moving to tighter payment per consumption models in pursuit of ROI across key video partnerships.”

Couto also references a rising online video advertising opportunity, which is currently dominated by YouTube. Online video advertising revenues are forecast to reach USD 25 billion in 2022, up from under USD 12 billion this year, region-wide. Outside of China, the revenues are expected to reach USD 7 billion in 2022, about 75 percent of which will go to YouTube and Facebook. Key online video ad markets outside of China are Japan, India, Australia and Korea.

SVOD revenues, which will be about USD 1.5 billion this year, excluding China, are set to hit about USD 3.1 billion in 2022. Of that number, Japan and Australia will account for more than half, with Southeast Asia’s share rising to about 15 percent. Average SVOD subscriber penetration of the population is forecast to rise to 18.8 percent from 9.8 percent, reaching 676 million customers across AsiaPac by 2022. – TVNews4u