The pay-TV business in Latin America and Asia is all about growth, with wider reach helping boost revenue from ad sales as well as subscription. In Asia-Pacific however, the medium is falling short of its advertising potential, especially in emerging Southeast Asian markets and even in maturing media economies such as Australia and Japan.

Within the local operator ecosystem in Southeast Asia, only Astro in Malaysia has been able to capitalize on its subscriber scale (3.1 million) and viewership (40% total TV audience share) to drive ad sales across its local channels and those of its partners.

Going forward, the company believes it will further maximize ad sales as it leverages a new CPRP (cost per rating point) ad strategy, combined with a recently launched free satellite service and incremental growth in its core pay-TV business.

Other local operators in Southeast Asia, notably MNC Sky Vision and First Media in Indonesia, are also starting to capture significant demand in line with growing pay-TV audiences.

Elsewhere, StarHub in Singapore and TrueVisions in Thailand are punching below their weight for various reasons, though this may change in the future. New emerging operators in Thailand meanwhile are looking to build on wider audiences for satellite and pay-TV.

On the whole, however, both broadcasters and distribution platforms  are making a more united effort to increase their appeal to key consumer demographics as well as marketers.

Much of pay-TV advertising’s current momentum in Asia stems from investment in local content, in-market teams and national distribution platforms, supported by escalating media costs on terrestrial TV as well as new ratings systems to capture pay-TV viewing.

At the same time, higher disposable incomes and GDP-per-capita levels, together with more competition, mass-market strategies and better packaging, will also drive growth by making pay-TV a more affordable consumer proposition.

Expanding reach

According to the recently released Asia Pacific Pay-TV & Broadband Markets 2012 report from Media Partners Asia (MPA), the region’s pay-TV industry added 35 million new subscribers in 2011, taking its overall base to 411 million homes, around half of TV households in Asia-Pacific.

MPA projects that regional pay-TV penetration will reach 62% of TV homes by 2016, though MPA analysts feel this number could be as high as 70%, if full market potential is realized.

MPA estimates that net ad spend on pay-TV in Asia-Pacific, powered by local ad sales, grew 10% year-on-year in 2011 to reach US$9.5 billion – 25% of total TV ad revenue.

On MPA’s projected 10% average annual growth rate, this number could top US$15 billion, or 28% of TV advertising, by 2016. Nonetheless, global benchmarks and market potential suggest this number could be much higher, in the 30-40% range, similar to where the UK and USA are today.