Television Fortunes Rising In The East

Like other markets, Asian television was hit by fallout from the global advertising downturn of 2001. However, advertising expenditure grew 3% in real terms in 2002 and Zenith is forecasting a further increase of 5.2% in 2003.

Asia Pacific was able to ride out the recession as the financial crisis of the late-nineties helped it get a realistic handle on the state of the advertising market. The region also benefited from the economic progress made by China and India, which have experienced rapid population growth and have opened themselves up capitalism and free market economics.

Zenith believes that there is huge potential for growth in the region, particularly in countries where ad markets are patently underdeveloped. Prime examples are China, India, Indonesia, Pakistan and the Philippines.

Television advertising is likely to become increasingly important as a method of sales promotion and it is estimated that revenues will grow by 83% in real terms between 2002 and 2012. This is equivalent to growth of 6.3% a year, compared to 4.1% in the nineties.

The most dramatic change will take place in China where the ad market is expected to grow almost fivefold in the next decade. Nonetheless, television advertising will remain cheap with CPT rising only marginally from $0.13 to $0.23 between now and 2012.

Pay-TV looks set to be another success story with revenues predicted to grow 171% in the next ten years. Subscription revenues climbed by 23% in 2001 and by 17% last year as cable companies expanded their coverage and DTH platforms were launched throughout Asia Pacific. After a slow start, it is assumed that the region will surpass Europe and North America in terms of digital homes in the second half of this decade (see Digital TV Approaches 100 Million Homes).

Pay-TV platforms Cable is the most popular method of accessing pay-TV services in Asia Pacific and this will remain the case for the foreseeable future. It is the only legal form of pay-TV in China and Singapore and holds a clear lead over DTH in India, the Philippines, South Korea and Taiwan.

At the end of 2002, 29% of homes in the region subscribed to cable, while only 4% received DTH signals. By 2012, Zenith expects 40% of homes to have cable access while 6% will have a satellite dish. Digital terrestrial television (DTT) is practically non-existent in Asia-Pacific. The only country to have introduced a service is Australia where penetration is little more than 1% two and a half years after launch.