MxMIndia

Tag: Media Partners Asia

  • … unless we can improve our standards in non-cricketing sports, writes Indrani Sen

    India: Still a Small Player in Sports

     

    By Indrani Sen

     

    Around fifty years back, sports used to be played just for the sake of excellence in sports and not for any financial gain. The advent of television followed by satellite telecast created a global audience for sports and changed the business of sports totally. The second and perhaps more crucial change happened with the introduction of the World Wide Web and internet with sports reaching the remote corners of the world riding on the new media technology. Today, million dollar deals back big sporting events with promises of big money to all the stakeholders.

     

    Recently, Media Partners Asia (MPA) released a report Asia Pacific Sports Media 2020.. The report predicts sports revenues in TV and online video will grow at a 6.7% CAGR to reach US$7.2 billion by 2024. According to the report, OTT accounted for 21% of sports media revenue generation in 2019 in the 11 Asia Pacific markets. This is likely to almost double over the next five years to reach 40% by 2024. Excluding China, OTT will account for 23% of sports media monetisation in 2024 across the measured markets, up from 12% in 2019.

     

    The MPA report further notes: (1) Sports rights costs and revenues are seasonal and lumpy; major global events typically occur every 2-4 years and can either inflate or adversely impact sports economics on a year on year basis and (2) Global sporting events in 2020 (i.e. the Tokyo 2020 Olympics scheduled in July 2020 in Japan, etc.) will be key drivers of value in Asia Pacific markets. Currently these events are subject to risk given the global spread of the Coronavirus. Japan has already cancelled a few pre Olympic schedules and is taking extra precautions for the torch relay.  The torch is scheduled to be lit in Greece on March 12 and handed over to Japan on March 19 at Athens.

     

    Sports rights investments in China, India, Australia and Japan are driven by a strong domestic sports ecosystem. Rights costs in China are driven by growing appetite for domestic and international football as well as basketball with domestic baseball and football driving growth in Japan’s sports rights market. Cricket continues to drive more 85% of India’s costs and the trend is likely to continue irrespective of growing popularity of some other sports.

     

    In 2018, Sanjay Gupta (then MD of Star India) predicted that Indian sports industry can become a $10 billion industry in next five to seven years while speaking at the CII Scorecard Forum. Gupta said, “Over the last few years, the kind of activity around the business of sports has been tremendous. There are now over 15 domestic leagues in the country – across kabaddi, football, wrestling, boxing, badminton – from just 2 five years back…… And in my mind, this journey has only begun. Sports is still at 0.1% share of our GDP, while globally the industry is sized at around 0.5% of GDP share” (https://www.exchange4media.com/media-tv-news/indian-sports-industry-can-become-a-$10-billion-industry-in-next-5-7-yearssanjay-guptamd-star-in).

     

    We will still have a long way to go even after becoming a $10 billion dollar sports industry to make any mark in the APAC sports market as well as the global sports market. As per research by ResearchAndMarkets.com the global sports market reached a value of nearly $488.5 billion in 2018, having grown at a compound annual growth rate (CAGR) of 4.3% since 2014, and is expected to grow at a CAGR of 5.9% to nearly $614.1 billion by 2022 (https://www.businesswire.com/news/home/20190514005472/en/Sports—614-Billion-Global-Market-Opportunities). In spite of the media hype which gets created every year around IPL and over ICC World Cup every year, India will remain a small fish in a big pond as far as sports business is concerned unless we can improve our standards in other sports and get higher fan following across different sports to build up audiences for TV and OTT platforms.

     

    In March 2019, PWC along with ASSOCHAM published a report “Sports infrastructure: Transforming the Indian sports ecosystem” which highlights not only the lack of sports infrastructure in India, but also the lacuna in government’s policies and funding for promoting sports. As per PWC, collaboration of private and public sectors is required in order to uplift the standard of sports in India. If the government allows investment in sports as a part of Corporate Social Responsibility (CSR) projects and permits few companies to participate jointly in large projects, then we can probably hope to see substantial improvement in near future.

     

     

  • It tracks the growth trajectory of sports rights and TV and online video sports revenues across 11 markets in Asia Pacific

    MPA unveils ‘Asia Pacific Sports Media 2020’ study

    By A Correspondent

     

    Sports rights costs across 11 Asia Pacific markets grew 2.4 per cent in 2019 to reach US$5.5 bn in aggregate while sports revenues across TV and online video increased 7.8 per cent in 2019 to reach US$5.2 billion in total, according to a new report published today by Media Partners Asia (MPA). MPA projections indicate sports rights costs will grow 3.8 per cent CAGR between 2019-24 to reach US$6.6 bn by 2024 while sports revenues in TV and online video will grow at a 6.7 per cent CAGR to reach US$7.2 bil. by 2024.

     

    The report, entitled ‘Asia Pacific Sports Media 2020’ tracks the growth trajectory of sports rights and TV and online video sports revenues across 11 markets in Asia Pacific with historical data and projections as well as analysis of key players and sports properties by geography.

     

    The report notes that OTT accounted for 21 per cent of sports media revenue generation in 2019 in the 11 Asia Pacific markets. This is likely to almost double over the next five years to reach 40 per cent by 2024. Excluding China, OTT will account for 23 per cent of sports media monetization in 2024 across the measured markets, up from 12 per cent in 2019. The MPA report notes: (1) Sports rights costs and revenues are seasonal and lumpy; major global events typically occur every 2-4 years and can either inflate or adversely impact sports economics on a year on year basis and (2) Global sporting events in 2020 (i.e. the Tokyo 2020 Olympics and UEFA Euro 2020) are a key driver of value in Asia Pacific markets but are subject to risk given the global spread of the coronavirus.

     

    Commenting on the findings, MPA Senior Analyst Srivathsan A R said: “The market for premium sports remains relatively healthy in Asia Pacific, in spite of uneven structural dynamics and the corrosive impact of piracy. Sports rights investments in China, India, Australia and Japan are driven by a strong domestic sports ecosystem, supported by premium international rights for football, basketball and baseball. Rights costs in China are driven by growing appetite for domestic and international football as well as basketball. Growth momentum, strong between 2016-19, will stabilize post 2021-22. Cricket continues to drive more 85 per cent of India’s costs. Rationalizing of pay-TV spends on domestic rights in Australia will affect the overall market in the future while domestic baseball and football will drive growth in Japan’s sports rights market. Greater Southeast Asia, including Hong Kong, is dependent on growth in international football and basketball. Local football in markets such as Thailand, Indonesia and basketball in Philippines will continue to deliver additional growth.”

     

    Added MPA Executive Director Vivek Couto: “A number of themes are emerging across the region. Investment in premium sports rights is often proving scalable and sustainable, when driven by: (1) Large scale internet players with pole position in a vast digital ecosystem, which helps subsidise investment in premium content (i.e. Tencent in China) or integrated pure play entertainment and sports OTTs with AVOD and SVOD business models (i.e. Hotstar in India and iQiyi in China); (2) Pay-TV operators investing to retain high-ARPU customers and grow a new OTT segment, anchored to product innovation with premium sports at the forefront (i.e. Foxtel, Sky Network TV, Astro and PCCW’s Now TV); and (3) Local & regional TV broadcasters that have a combination of mass reach and premium segmentation with branded sports networks (i.e. Star and Sony in India; select free TV players in Southeast Asia and regional pay network beIN Sports).”

     

     

  • TV industry to stay dominant, with an 80% marketshare by 2022, notes a Media Partners Asia study

    Online video growth ramps up with Internet TV: MPA

     

    By A Correspondent

     

    In a landscape still dominated by TV, the Asia Pacific online video industry is on a sure path to more than double its share of video industry revenues ex-China from 9% in 2017 to 20% by 2023, according to analysis released today by Media Partners Asia (MPA).

    The findings will be presented at the ongoing APOS Summit, a leading event for industry leaders in media, telecoms and entertainment.

    The analysis covers 12 markets: Australia, India, Japan, Korea, Hong Kong, Taiwan and six key markets in Southeast Asia, with a focus on consumer and advertiser spend, content costs and market share across key clusters.

    Commenting on the MPA analysis, executive director Vivek Couto said:“The growth of subscription and ad-supported video services from Amazon, Facebook, Netflix and Google will propel these FANG companies to a combined 63% share of Asia Pacific online video revenues ex-China by the end of 2018.

    Google-owned YouTube’s dominance is reflected by its 70-90% slice of a large and fast-growing online video ad pie in Australia, Japan, Southeast Asia and India. In addition, Amazon and Netflix have scaled quickly with subscription video offerings in Australia, India and Japan but have a long way to go in Southeast Asia and Korea. There’s also a long runway for more growth in India.

    Encouragingly, local and regional players with strong entertainment and sports IP together with, in many instances, large TV businesses, have invested in online video platforms to grab a bigger market share. This is espscially true in India, Korea and Japan, although Southeast Asia lags.

    The outlook remains in FANG’s favour however, with its aggregate market share maintained at 62% in 2023. Such scale will dramatically alter growth and investment dynamics across key markets. We see significant upside for local and regional media platforms with attractive IP and strong execution as well as the appetite and patience to invest over the long term across digital video.

    Excluded from MPA analysis are potential all-in premium offerings from Disney, 21st Century Fox and Time Warner, which are likely to start gaining traction at some point over the next five years as global media consolidation accelerates.

    FANG’s share could also be greater once Amazon Prime Video scales up in Australia and key markets across Southeast Asia. This is not yet included in the assumptions underlying MPA’s analysis.”

    Key highlights from the MPA survey include:

     

    FANG vs The Rest

    The growth of subscription and ad-supported video services from Amazon, Facebook, Netflix and Google will propel the FANG companies to a combined 63% share of Asia Pacific online video revenues ex-China by the end of 2018. Google-owned YouTube’s dominance is reflected by its 70-90% slice of a large and fast growing online video ad pie in Australia, Japan, Southeast Asia and India. Amazon and Netflix have scaled quickly with subscription video offerings in Australia, India and Japan but have a long way to go in Southeast Asia and Korea. There’s also a long runway for more growth in India.

    Encouragingly, local and regional players with strong entertainment and sports IP and, in many instances, large TV businesses, have invested in online video platforms to grab a bigger market share. This is espescially true in India, Korea and Japan although Southeast Asia lags.

    According to MPA, YouTube and Facebook combined will account for 72% of online video advertising in Asia Pacific ex-China by 2023, versus 75% at end-2018. In subscription-based online video, Amazon and Netflix’s combined share of the market should reach 35% in 2018 and grow to 37% by the end of 2023, although local and regional platforms are competing for and winning a share of incremental dollars in Australia, India, Japan, Korea and parts of Southeast Asia.

     

    Content Investment

    Total content investment in TV and online video across the 12 surveyed markets reached US$23.1 billion in 2017, up 6% Y/Y. MPA’s analysis includes movies, entertainment and sports. Content investment is expected to scale to US$30.1 billion by 2023, a 5% CAGR from 2018. Such growth is largely anchored to new dollars being spent across online video, which will account for 17% of content investment by 2023 versus 10% in 2018. MPA analysis focuses on premium video content creation across TV and OTT but excludes costs associated with the billions of hours being mass produced and uploaded on YouTube.

    Content investment on TV is largely anchored to continued growth in sports rights, across Australia and India in particular, entertainment on free TV across Southeast Asia, albeit expanding at a more moderate pace, and pay-TV in India and Korea. Online video’s contribution to total TV and online video content costs will grow markedly in Southeast Asia, rising from 10% to 20% between 2018 and 2023. A similar growth trajectory is evident over the same period in Australia (13% to 26%) and India (10% to 19%).

     

    The Overall Video Industry

    Asia Pacific advertising and subscription fees across TV and online video grew 3.9% ex-China in 2017 to reach US$60 billion. TV and online media continue to grow at different speeds, as expected, with TV revenues inching up 1.2% in 2017 while online video revenues expanded by 45% to US$5.2 billion.

    MPA projects that total industry revenues will climb at a 3.8% CAGR over 2018-23 to reach US$77 billion by 2023, with online video scaling up by a 16% CAGR to reach US$15 billion in net terms by 2023 versus US$7.1 billion in 2018. TV will only grow at a 1.8% CAGR over the same period to reach US$62 billion by 2023.

    By 2023, the largest TV and online video markets in Asia Pacific ex-China will be: Japan (US$27 billion), India (US$17 billion), Korea (US$9.2 billion) and Australia (US$8.2 billion). Southeast Asia will contribute US$11.1 billion by 2023. India will remain the fastest-growing video market, growing at an average annual rate of more than 8% over 2018-23, followed by Southeast Asia with 5% and Australia at 4.5%.

     

    Online Video

    Online video advertising, dominated by YouTube to date, continues to grow at a stellar pace, increasing by 47% in Asia Pacific ex-China to US$3.6 billion in 2017 and projected by MPA to climb at a 17% CAGR between 2018-23 to reach US$10.7 billion by 2022. Online video subscription fees are growing rapidly from a very low base, up 41% year-on-year in 2017 to reach US$1.7 billion, and forecast to grow at a 12% CAGR from 2018 to more than US$4 billion by 2023.

    Japan and Australia will remain the leading markets for online video, contributing more than 55% to Asia Pacific revenues ex-China in 2023. The third-largest market will be India, which willl also be the fastest growing with a 26% CAGR over 2018-23, with Southeast Asia the second-fastest with a 21% CAGR over the same period.

     

     

  • The projections are published in a new report called India Pay-TV & Broadband Markets

    130mn digital pay-TV homes by 2020 to contribute $17 bn in revenues

    By A Correspondent

     

    New projections released by Media Partners Asia (MPA) indicate that digital pay-TV penetration of TV homes in India will grow from 28 percent in 2012 to 54 percent by 2017, and reach 60 percent by 2020. Digital penetration of total pay-TV homes will double from 35 percent in 2012 to almost 70 percent by 2020. The projections are published in a new report called India Pay-TV & Broadband Markets.

     

    “A successful start for the roll-out of digital addressable systems (DAS) has revived interest in pay-TV among strategic and financial investors,” said MPA executive director Vivek Couto, adding, “The real benefits will become clearer in 2H 2013 and beyond, as multi-system operators (MSOs) drive addressability and work with last mile local cable operators (LCOs) to ramp up tiering, billing and collections. Regulators are committed to curbing delays in the next phases of DAS, while the DTH industry is keen to revive growth by capitalizing on digital transition.”

     

    MPA forecasts indicate that total digital pay-TV homes will grow from 47 million in 2012 to 110 million by 2017 and 130 million by 2020. This implies that the pay-TV industry will remain in a prolonged investment mode, with significant capital intensity. Both DTH and cable operators already have high levels of debt; as the larger phases of DAS come into play, the majority of additional funding will have to come through equity, via IPOs and M&A, the MPA report states.

     

    Total industry revenues will grow at a CAGR of 11.4 percent between 2012 – 17 and 10.2 percent between 2012 and 2020, reaching US$17 billion by 2020 versus US$7.8 billion in 2012. Total pay-TV homes are expected to grow from 128 million 2012 to 167 mil. by 2017, and 183 million by 2020. Pay-TV penetration of TV homes will grow from 80 percent to 85 percent between 2012 and 2020, adjusted for multiple connections in a household.

     

    Cable impact

    Over the medium term, the majority of cable investments will be directed towards digital infrastructure, helping to build operator scale and improved addressability. In the long run, investments will be more focused towards acquiring primary subscriber points and the expansion of high-ARPU products such as broadband and HDTV. According to MPA, the total proportion of cable households with DAS climb from 15 percent in 2012 to 50 percent by 2020.

     

    DTH growth

    In the DTH space, concerns focus on the growth of active subs (i.e. paying customers, net of churn and subscriber suspension), which has moderated in recent times. MPA says that the growth in active subs will rebound however, as more markets undergo analog switch-off. MPA forecasts indicate that active DTH subs will grow from 32 million in 2012 to 64 million by 2017, and 77 million by 2020.

     

    Broadcasters

    Subscription fees for pay-TV channels crossed US$1 billion in 2012, driven by the growing strength of aggregators. This growth has yet to factor in digitalization, which will result in a bigger share of subscription revenue for broadcasters. Operating margins will remain under pressure in the short-to-medium term, due to heavy investments in content for existing channels and gestation losses on new channel launches.

     

    MPA expects total pay-TV channel revenues, including advertising and subscription to grow from US$3.6 billion in 2012 to US$6.6 billion by 2017, and to US$8.6 billion by 2020. The pay-TV ad market is expected to grow at a 10 percent CAGR over 2012-20, while broadcaster subscription revenues are expected to grow at 15 percent over the same period.

     

  • Large cable distributors have said that one factor alone – a huge six-eight times hike in subscription revenues alone- would buttress their already profitable balance sheets

    Cable cos expect major hike in subscriber revs

    By A Correspondent

     

    TRAI’s argument that carriage fees paid by TV channels to cable MSOs are necessary to fund their digitisation appears to be falling apart scarcely a week after it was made. Instead, large cable distributors have themselves said that one factor alone – a huge six-eight times hike in subscription revenues alone as declarations spiral with addressability – would significantly buttress their already profitable balance sheets.

     

    With additional revenues from broadband and VAS, industry estimates also say that a bundled digital and broadband + VAS business model will result in the payback period being reduced by a year to 24 months, as opposed to 36 months under a standalone digital cable TV proposition. This comes even as industry reports –including one released five months ago– have been pointing out that all major national MSOs are already adequately funded for Phase I digital deployment (mandatory only in the four metros from July 1).

     

    Given that the government is also shortly planning to hike FDI for MSOs from 49 per cent to 74 per cent, industry analysts have questioned why TRAI assumed MSOs and cable distributors needed money in the form of mandatory carriage fees by TV channels – an annual recurrence – to fund their upgradation, which is only a one-time investment. This is especially inexplicable, as TRAI’s own April 30 Explanatory Memorandum to the DAS Regulations states: “In the addressable systems, due to transparency in ascertaining the number of subscribers, the subscription revenue is expected to go up. Therefore, the dependence of MSOs on the carriage fee, as a source of revenue, is likely to be reduced.”

     

    It has been well known that the cable distributors are the profitable, cash rich last mile, with even many smaller operators who under-declare subscribers/taxes, expanding into other activities like real estate, auto agencies, ancillary services, and so on — while most broadcasters have turned sick due to a killer combo of low ad rates, gross subscriber under-declaration and huge carriage/placement fees.

     

    The national MSOs, are, in fact, almost all profitable, with even newer ones like Den Networks having posted a 20.7 per cent yoy revenue growth in Q3 of the fiscal just ended, including a 6.6 per cent rise in its net profit. That is why the added bonanza of TV channels having to now mandatorily pay MSOs carriage fees caused MSO share prices to jump after the TRAI tariff order was announced– even as listed broadcaster scrips sank.

     

    Shares of Hathway Cable and Datacom had closed on May 2 at Rs185.40, 19.23 per cent above its previous BSE close, missing the upper circuit by a small margin, Den Networks also touched an intraday high of Rs116.90, before closing at Rs110.80, 2.12 per cent above its previous close.

     

    Earlier, a Media Partners Asia (MPA) report (Investing in Digital India) of December 2011 had projected a six times increase in subscriber revenues for MSOs, albeit with a 20 per cent subscriber churn to DTH – but MSOs themselves reacted very positively over the TRAI tariff order.

     

    Hathway Cable & Datacom MD & CEO K Jayaraman told a business daily last week, that his company expects revenue to go up by 250 per cent post-digitisation. “We have 9 million homes and, at the least, we expect to double the subscriber base as 80 to 90 per cent of the carriage revenue will go to MSO. Broadly, after taking churn and loss in the carriage fee, we expect revenue to go up by 250 per cent “, he said. The company’s CFO, G Subramaniam, said during the same interview, that while carriage fees would reduce, the subscription revenue would rise from 10-15 per cent of the revenue mix currently. “This increase is likely to be six-eight times, and will make up for the loss of carriage fee”, he added. Both said that digitisation would help them grow their broadband business – already significant, given that as per Mr Jayaraman,

    Hathway already had 4 lakh broadband subscribers and a Rs 150-crore topline, which he expected would double in the next couple of years.

     

    Mr Jayaraman also outlined the many sources for his company’s digitisation upgrade: IPO funds and a mix of internal accruals, debt and vendor finance. He said: “The capex will be Rs1,000 crore. Of this, Rs300 crore will be spent in Phase-I and the rest in Phase-II. Phase-I is to be financed from initial public offer proceeds. A mix of internal accruals, debt and vendor finance will be deployed in Phase-II. The funding plan for the second phase is yet to be finalised,” he added.

     

    The MPA report – which was released five months ago – also states clearly: “According to MPA analysis and interviews, all major national MSOs are adequately funded for Phase I digital deployment. The cost of digital software and hardware has also fallen since 2007, ensuring set top boxes plus the CA card will cost about $30-40 per unit in total including duties, compared with $60 three years ago”, and adds that a number of the MSOs (like Hathway, DEN) are also ordering digital STBs in larger volumes like 1 million per annum, by which costs are lowered to at least $30 per unit.

     

    For instance, this report also gave company-wise details on the impressive progress they had already made on digitisation, and outlined their excellent financial situation to achieve the same. For instance, it said that Hathway had a debt to equity of 0.3x and a high promoter holding (67 per cent), hence “the company has enough head room to raise further capital”. While it said that DEN had a “comfortable debt to equity stand of 0.2x with a net cash of Rs9.5crore”, it also had sanctioned loans of Rs200 crore, which had not been drawn at the time of the report’s release. Even regional MSOs like Ortel, which might have a comparatively higher debt to equity at 1.6x as per the report, appeared comfortable placed to take care of their digitisation upgrade.

     

    Source: The Economic Times
    Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved

     

  • The growth will be primarily driven by MNCs investing inIndiaand stronger MCG sector, and there could be upward revisions made in the second half of 2012

    Indian adspends to see +8.7% growth in 2012: MPA study

    By A Correspondent

     

    Media ad sales will grow by 8.7 per cent in net terms this year, against the background of a slowing economy (~7 per cent real GDP growth versus historical range of 8-9 per cent) and the high first half of 2011 base last year resulting from the Cricket World Cup (which happens once in four years) plus an extended IPL season according to Media Partners Asia.

     

    The growth will be primarily driven by MNCs investing inIndiaand stronger MCG sector, and there could be upward revisions made in the second half of 2012. The outlook for advertising growth across key categories is mixed.

     

    Some of the highlights are:

    • FMCG 

    Media buyers expect robust growth from the FMCG sector, which is the largest advertising category, contributing 30-35 per cent to total ad spend. MNCs are expected to report robust numbers, while a few large MNC accounts (with annual ad budgets in the region of Rs2-3 billion) are looking to increase spends by 50-70 per cent for the coming year. Domestic FMCG companies are expected to see only marginal growth as the profits of these companies have deteriorated due to rising input costs.

     

    • Auto 

    Traditional companies such as Maruti and Hyundai have reduced their spends; but global car manufacturers investing inIndiaare driving the overall growth for the sector. As suggested in the recently held Auto Expo 2012, the sector will benefit this year from new launches in the two-wheeler and utility vehicle segments in subsequent quarters.

     

    • Life insurance

    The forecast is for a steady growth, a prevailing trend seen in this category since 2008. A reversal of interest rates will be the underlying factor influencing consumption and ad spend across sectors. The rising interest rate cycle seems to have peaked out. After raising interest rates by 13 times since March 2010, RBI (Reserve Bank ofIndia) may shift its approach towards the country’s monetary policy. Inflation is likely to fall considering the high base last year, and in order to bring the country’s economic growth back on track, the RBI is likely to reduce interest rates gradually in 2012. This will encourage investments and spending, in turn benefiting the ad market.

    Consumption demand has held up reasonably well though rural demand may be a concern, highlighted by a recent slowdown in sales of two wheelers and durables.

     

    Other key factors that will have an impact on the ad marker include:

    • Competition in Hindi GEC

    Competitive intensity in the Hindi GEC space is nothing new, though new competition is accelerating amongst second-tier channels. There has been a change in the pecking order of top three Hindi GECs, with Sony climbing up to the No. 2 spot while incumbent Zee TV has now slipped to No 4. Based on discussions with some of the major media buyers, the genre currently has limited supply of inventory, which should keep ad rates healthy.

     

    • Digitalization to create new niches

    Before the first phase of digitalization is implemented in June 2012 (it may be delayed to December 2012), broadcasters are already rolling out new niche channels in various genres like action and comedy. This will attract advertisers who are willing to target and segment their audience, not just from demographic but also psychographic parameters.

     

    • FDI in single-brand retail

    Opening up of FDI in single-brand retail (precursor to opening up multi-brand retail) will benefit regional print companies.

     

    • State elections

    In the near to medium term, print media will benefit from the upcoming closely contested elections to be held in five states: Uttar Pradesh, Uttarakhand, Punjab,Goaand Manipur.