MxMIndia

Tag: MPA

  • 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).”

     

     

  • The session on 'Television is Dead – Long Live Television' discussed how content providers can reach out to consumers in a multi-platform world and who will be the ecosystem winners and losers in the future

    #FF14 Day 2: Despite advent of multiple platforms, television still rules

    By A Correspondent

     

    With the explosion of a host of content delivery platforms in India, it is increasingly becoming demanding for traditional mediums to spruce up their offering and do it in a manner that is platform-agnostic. The observation is particularly true for the medium of television that is being confronted with newer challenges as a host of platforms are making a beeline to offer content in their own unique ways.

     

    The session on ‘Television is Dead – Long Live Television’ on day 2 of FICCI Frames discussed how content providers can reach out to consumers in a multi-platform world and who will be the ecosystem winners and losers in the future. The panelists comprised of Anuj Gandhi, Group CEO, Indiacast Media Distribution; Sanjay Gupta, COO, Star India and Todd Miller, CEO, Celestial Tiger Entertainment. The session was moderated by Vivek Couto, Executive Director, MPA.

     

    Mr Couto began by shedding light on how the traditional medium of television was still ruling the viewership pie and was not being as impacted by the emergence of other digital options including mobile. He presented the example of a developed market like US that was still seeing a healthy growth trend. Asserting that the future will be about consolidation, Couto said that the medium needed to get away from its garb of being a defensive medium and rather play the role of being an aggressor.

     

    Sanjay Gupta began by taking the audience back to a decade ago where it was prophesied that the medium of print would die with the invasion of television. “But that is obviously not the case with the medium of print growing by two times its total share today. We therefore are living in exciting times as new mediums are providing newer opportunities.” Mr Gupta advised that instead of looking at it as a TV business, the players should be platform-agnostic and receptive of changes that the newer platforms have to offer.”

     

    For Anuj Gandhi, the last two years were indeed exciting for the Indian broadcast industry largely for the digitization exercise that was undertaken on a national level. “While there were more than 40 companies that were launched, more than half of them shut down after facing challenges. The problem is that we lack scale,” said Gandhi. Mr Gandhi affirmed that it was still looking at opportunities on the digital platforms in terms of providing content for ‘binge viewing’ format.

     

    Todd Miller pitched in by saying that whatever the prevailing trend, the important medium to connect with the viewer still continues to be television. Despite the emergence of multiple platforms, television will still be the preferred vehicle as that is where the viewer’s tend to be the stickiest, he said.

     

    Offering an advice to the audience, Sanjay Gupta said that there was no attempt being made in terms of scale for viewing content of choice on linear platforms. “That is a challenge that the content creators need to resolve,” he said.

     

    According to Anuj Gandhi, the challenge still remains that the bandwidth speeds for accessing data on internet continues to be problematic. And this is despite the explosion of smartphones and tablets in the country. He cautioned the gathering that brands needed to be ready with high-value content when technologies like 4G etc take off. But come what may, television will continue to evolve as a medium and will become more ‘pull’ medium for attracting viewers than being a ‘push’ medium.

     

  • Digital mandate to benefit the industry and the consumer: Media Partners Asia

    Digitization will boost TV industry: MPA report

    By Rishi Vora

     

    The government mandate to digitise cable networks across India will bring a significant transformation to the US $7 billion television industry with a positive impact on the nascent broadband market, says a report published by Media Partners Asia (MPA).

     

    Executive Director of Media Partners Asia, Mr Vivek Couto said, “India’s broadcasting and pay TV market is on the cusp of a high growth value phase, similar to North America between 1998 and 2003, Korea during 2003-2007, and Taiwan during 2005-2010. Valuations of the domestic companies in these markets during the high-growth value stage typically skyrocketed, as networks were upgraded and services to consumers expanded. In India, domestic players and foreign investors will both do well, to the benefit of consumers, when the government’s policies take shape.”

     

    The report, entitled ‘Investing in Digital India: The Dynamics of Mandatory Addressable Digitization’, underlines benefits across the value chain.

     

    A boost for the government and the economy
    If the current analog cable distribution model remains in place and digital penetration is limited, the cumulative value of the tax receipts lost by the government would reach US $11 billion over the next decade or more than US $1 billion per year. The government therefore has sufficient incentives to push digitisation and can also accelerate the process by offering tax incentives to a potential multi-billion-dollar industry. Digitisation will also help the government pursue India’s broadband goals and thereby help to boost economic growth. Potentially, a 10 percent increase in broadband penetration would increase India’s GDP by 1.5 percent. As of September 2011, broadband per capita penetration in India was only 1 percent. In its National Broadband Plan, the Telecom Regulatory Authority of India sees a pivotal role for cable operators with digital network upgrades paving the way for broadband growth.

     

    Consumer will have the choice
    Digital cable television will improve the consumer experience and resolve legacy issues from analog cable services. Consumers will gain access to more channels; attractive tiering options with differentiated content across local, regional and niche genres. It will provide a better viewing experience; and improved quality of service. Digital cable television will also be affordable for the consumer. As per international benchmarks, spending on pay TV typically accounts for 5 percent of GDP per capita. In this context, digital cable television in India will be affordable given heavy subsidies on STBs (currently subsidised at 60-70 percent by MSOs), which will ensure that consumer spends fall within the 5 percent benchmark. Consumers will also benefit from new competition as digitisation in metros ensures that seven DTH satellite platforms (including free service DD Direct) compete for customers with digital cable operators.

     

    Cable transformation almost certain
    MPA expects a six-fold increase in subscriber revenues for cable MSOs, though not without at least a 20 percent churn in the cable subscriber base to DTH. Subscriber declaration levels will increase from 15 percent currently to 100 percent, while the retained ARPU will increase by six times after assuming a 30 percent base case revenue share with the local cable operator (LCO) will reduce the payback period on digitisation. Under a bundled model, the payback period could be reduced by a year to 24 months, as opposed to 36 months under a standalone digital proposition.

     

    The main challenges, apart from managing subscriber churn to DTH are one, the drop in carriage fees by about 20-50 percent; and second – incentivising revenue-sharing agreements that need to be struck with local cable operators to drive digital into homes.

     

    Opportunity for DTH players
    Phase I digitisation in the four key metros offers a good opportunity for DTH operators to grab high-ARPU customers and increase the platform’s reach in larger TAM markets. MSOs envisage about 15-20 percent churn in cable subs to DTH, though some suspect this could grow to 30 percent in the early stages of Phase I deployment. Subsidised HD offerings will also act as a key differentiator for DTH players as few cable operators have rolled out HD services.

     

    Benefit to broadcasters
    Digitisation will help boost subscription revenues and reduce dependence on advertising. Improved economics will also help broadcasters launch niche channels with a premium focus while carriage and placement fees will fall in certain markets and moderate in others. At the same time, consumer adoption of certain programming tiers and specific channels (over others) will ensure healthy competition while broadcasters will also be under pressure to produce content with differentiation, premium quality (potentially advertising-free) and with local relevance.

     

    Benefit to investors
    Upon successful implementation of the digital mandate, gradual consolidation of LCOs will become inevitable. This will shift industry profits and value to centralised distribution platforms and broadcasters. Valuations for cable/ pay TV operators in the USA, Korea and Taiwan during their high-growth value stage typically averaged 12-16x one year forward EBITDA, versus the current trading average of 9-10x for India’s listed cable/pay TV entities. MPA assumes similar or higher valuations for companies in India subject to successful execution. Most investors, especially strategic companies, will adopt a wait-and-watch approach, potentially making their bets after Phase I is completed.