Advertising to churn out major revenue, drive growth of online video

Shift continues from TV to online in terms of engagement and monetisation: MPA report

YouTube remains by far the largest (over-the-top) OTT player in the Asia-Pacific (Apac) region with $8.1 billion in revenue in 2023. The second is ByteDance, the company that owns TikTok. Netflix is half of YouTube’s size at $4 billion. Together, the top 12 OTTs in Apac account for 75 per cent of total online video revenue in the region. The market is clearly moving to advertising with 51 per cent of online video revenue coming from ads. This is projected to grow to 54 per cent by 2028.
 

Add up television and other formats and the Apac video business grew by 5.5 per cent in 2023. It now stands at $145 billion. China is the largest chunk of this at $64 billion. Japan, the second largest, is half of China at $32 billion in overall video revenue. The third largest, India, is less than half of Japan at $13 billion in 2023 revenue. The business continues to shift from TV to online in terms of engagement and monetisation. These are some of the highlights from Singapore-based Media Partners Asia’s (MPA’s) Asia Pacific Video and Broadband 2024 Report released earlier this week. The full report is a pay product. MPA shared some of the country insights and data on the top ten OTTs exclusively with Business Standard.

 

“The online video sector is starting to rationalise with price increases in the SVOD (subscription driven video-on-demand) category. There are signs of less competitive intensity overall with more disciplined content and marketing investment, less cash burn, and the introduction of ad tiers and new strategies to drive monetisation and margins,” says Vivek Couto, managing and executive director, MPA. He reckons the major user-generated content and social video players YouTube, Meta and TikTok will continue to invest in new content community platforms and e-commerce products. “Netflix, the most scaled SVOD operator (excluding China), is investing to grow premium content creation ecosystems in markets such as [South] Korea, Japan, India and key Southeast Asia territories,” says Couto.
 

India’s video market will be driven by advertising, which will account for more than 65 per cent of total video revenue estimated at $17 billion in 2028. Of this, online video’s share will grow from just about a third currently to 45 per cent by 2028. However user-generated content and social video advertising will mature.
 

The most interesting bit? As the whole video business leans digital globally, in India this will be more so the case. Jio Cinema, Disney+Hotstar, SonyLIV and Zee5, among other hybrid services, will drive the growth of premium AVOD (advertising video-on-demand). It is expected to grow at a massive 26 per cent compound annual growth rate from 2023-28, while subscription revenue, led by Netflix and Amazon Prime Video, will grow by 9 per cent. 
 

Television (TV)’s share of the India video industry pie will decline from 70 per cent in 2023 to 55 per cent by 2028, the report reckons. Pay-TV subscription revenue is projected to decline as the subscriber base further contracts over the next five years.