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October 15, 2009
China’s Ministry of Culture recently took measures to crack down on the country’s market for online music, more than 95% of which we estimate is unlicensed. To date, the market has lacked regulatory constraints that discourage widespread piracy, and these conditions have deterred content producers from doing business there.
Besides helping the music industry, the move signals a brighter future for all types of content players and is likely to spill over to a reduction in pirated video as well. In Pyramid Research’s new report Pay-TV Video on Demand in Emerging Markets, I highlighted piracy as a major obstacle for pay-TV operators that want to offer VoD in emerging markets. In China, pirated DVDs and other pirated video content is widely available for pennies or a very small fraction of the cost of monthly pay-TV service. Piracy combined with other free alternatives has left the country’s pay-TV penetration rate at roughly 50% of households even though nearly all have a television set.
China is somewhat unique for an emerging market because average pay-TV revenue per subscription is less than 5% of GDP per capita, an indicator that signals the average household can afford incremental spending on video-on-demand services. Because of this and other factors mentioned in the report, Pyramid Research estimates that the Chinese VoD market will grow at an explosive CAGR of 111% per year from 2008 to 2014.
VoD revenue outlook in China, 2008, 2014
Source: Pyramid Research
— Daniel Locke, Senior Analyst
Related content:
Pay-TV Video on Demand in Emerging Markets: Service Provider Strategies, Business Models and Five-year Adoption Forecasts
Research Report published October 2009
At year-end 2008, pay-TV households in emerging markets totaled 426m, up 16% from 2007. By 2014, we expect emerging markets to account for 69% of all pay-TV households. This report looks at the pay-TV VoD business model for emerging-market operators, analyzing its value proposition, different approaches to offering VoD and the overall market opportunity. The objective is to assess whether service providers need to take on the challenge of VoD or can make do with pay-TV alone. Watch video highlights from the report.
Asia-Pacific Media Forecasts
Forecasts updated quarterly
With telcos and mobile operators increasingly offering TV and video services, Pyramid Research’s Media Forecasts are designed to provide competitive intelligence on the pay-TV and mobile TV dynamics for 60 countries as well as regionally and globally. The Media Forecasts track demand patterns for free and paid TV services over terrestrial, satellite and mobile platforms worldwide, providing market share information at both the technology and operator levels as well as five-year adoption and revenue projections.
Communications Markets in China
Country Intelligence Report published June 2009
China’s telecom market generated $110bn in 2008, making it the second largest telecommunications services market in Asia-Pacific after Japan. It will overtake Japan in 2011, though it will still be half the size of the US market. China, like many emerging markets, is becoming an increasingly mobile market, and by 2014, we expect mobile services to account for more than 76% of total services revenue. This Country Intelligence Report analyzes China's communications, media and technology industries, including key trends, regulatory pressures and the competitive landscape, making it an excellent complement to our Forecast products.
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