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Tuesday, June 25, 2024

OTT to Drive Down China’s Pay-TV Market Revenue

Intense competition from pure play over-the-top (OTT) video streaming services such as iQiyii and steady drop in the overall pay-TV average revenue per user (ARPU) are set to bring down the overall pay-TV services revenue in China from US$32.9bn in 2020 to US$31.9bn in 2025, according to GlobalData, a leading data and analytics company.

An analysis of GlobalData’s Pay-TV Forecast Model reveals that after a tremendous growth of 14.9% in 2020, benefiting from most people staying at home and preferring in-home entertainment amidst the COVID-19 pandemic, the total pay-TV services revenue in China is set to decline at a compound annual growth rate (CAGR) of 0.6% between 2020 and 2025.

GlobalData forecasts the number of Internet protocol television (IPTV) users to increase at a CAGR of 5.8% over the 2020-2025 period while cable TV subscriptions will decline at a CAGR of 7.6% over the same period.

Anshika Gandotra, Telecom Analyst at GlobalData, says: “IPTV will be the primary technology to deliver the pay-TV service throughout the forecast period, with its subscription share increasing from an estimated 59.9% in 2020 to 74.7% of the total pay-TV subscriptions by 2025, majorly driven by the expansion of fiber-to-the-x (FTTx) network to support delivery of IPTV services. Furthermore, competitive pricing and bundled plans offered by major pay-TV operators will drive IPTV subscription base over the forecast period.”

China Unicom will account for the largest share of the total pay-TV subscriptions in 2020 and will remain the market leader through 2025, given its strong footprint in the growing IPTV segment. Its extensive fiber-optic network enables it to deliver high quality services such as 4K HD TV. Moreover, the operator is making substantial efforts in developing value added services such as Video on Demand (VoD) and interactive TV to attract new subscribers.

Ms Gandotra concludes: “China’s Pay-TV market also features a host of regional players such as Oriental Cable Network (OCN), Guangdong Cable TV Network (GDCATV) and Shanghai Media Group (SMG), which provide cable TV services with strong focus on regional content.”


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