Asia’s video industry will by the end of this year spend more than US$3.6 billion on content. About US$3.2 billion of that is television spend, primarily free-to-air with some pay-TV. The rest is from OTT/streaming services, which have brought in US$400 million in new content spend, according to Media Partners Asia (MPA) data presented at the ContentAsia Summit in September.

Over the next five years, as content spend in the region rises above US$4 billion, most of the growth will be driven by OTT/streaming platforms. Television will be flat to down, MPA research shows.

At the same time, pay-TV platform operators across the region are becoming much more selective about content, says MPA executive director, Vivek Couto. Content costs on various third-party contracts are being cut and platforms are focusing much more on local IP, particularly their own IP. This leaves international and third-party channels more exposed than they have ever been.

The good news for content owners is that “OTT dollars are definitely flowing,” Couto says, predicting that the OTT content investment pie in Asia could potentially top US$1 billion over the next five years.

Meanwhile, the outlook for pay-TV space in Asia is a mixed bag of growth and contraction,depending on the market. Couto says platforms in traditional markets such as Singapore, Malaysia and Hong Kong are desperately holding onto subscribers in various ways – and largely losing.

MPA forecasts a loss of at least 250,000 subscribers over the next five years. This could go higher than 500,000, “which is a big number in these small markets,” Couto says.

MPA’s new report, Asia Pacific Pay-TV Distribution, notes a “rebalancing” of content dynamics in response to market shifts and says that “a broad recalibration in Asia Pacific pay-TV, triggered by the growth of broadband, has begun”.

“Hollywood and international content remain vital, but the market for international pay channels, especially players focused on Hollywood series, is saturated and, in some cases, shrinking,” Couto says, adding that, increasingly, this content is migrating online, with OTT operators bidding up the cost of popular franchises. While Hollywood movie channels, kids networks and Asian pay channels are in robust health, there is little demand for new pay channels outside India and Korea, Couto adds.

“Demand for premium Asian content, led by Korean entertainment, continues to grow, while premium sports still offers a vital lifeline for many pay-TV platforms,” he says. Excluding Australia, which has a healthy appetite for Hollywood and international content, the trend on streaming platforms is towards Asian/local content.

This article was originally published in the October 2017 print issue for MIPCOM 2017 in Cannes