SNL Kagan Report Shows China to Become Asia’s Top Pay-TV Economy in 2011 with $7.5 Billion in Revenue, Surpassing Japan

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An analysis of China’s pay-TV market by SNL Kagan, the global leader in video economics intelligence, finds that while China has long been the world’s largest multichannel market in terms of subscribers, 2011 revenues of $7.5 billion are set to surpass Japan for the first time, ranking China as the top pay-TV market in Asia and the 5th largest in the world.

An analysis of China’s pay-TV market by SNL Kagan, the global leader in video economics intelligence, finds that while China has long been the world’s largest multichannel market in terms of subscribers, 2011 revenues of $7.5 billion are set to surpass Japan for the first time, ranking China as the top pay-TV market in Asia and the 5th largest in the world.

China’s video service revenues grew 31.1% in 2010 to reach $5.8 billion with growth driven by cable digitization and a 9.0% increase in pay-TV households. Between 2010 and 2015, SNL Kagan forecasts China’s multichannel subscriber base will grow at a 5.8% CAGR to reach 259.5 million households as video service revenues grow at a 20.5% CAGR to $14.7 billion.

Key findings in the reports include:
•Despite IPTV gaining momentum, cable continues to dominate China’s pay-TV landscape accounting for 95.7% of multichannel subscribers and 91.2% of video service revenues in 2010.

•47.0 % of China’s cable subscribers had migrated to digital connections by end 2010. In 2011 a further 22.5 million households are expected to adopt digital cable service.

•HD services are gaining ground with 2.5 million cable homes adopting the set-top-boxes and packages needed to access HD programming in 2010. By 2015, 17.2 million cable households are forecast to be HD.

•VOD is gaining steam with deployments in place at major operators including: Jiangsu BC&TV Network, Shenzhen Topway, Hebei TV Network, Oriental Cable Network, Wasu Digital TV, Shaanxi BC&TV Network, Chongqing Cable Network, and Beijing Gehua.

•IPTV accounted for 3.8 % of China’s multichannel subscribers in 2010, with 7.4 million households generating $493.2 million in video service revenues.

•China is the world's largest fixed broadband market, with 31.1 % of total households or 126.3 million subscribing to fixed line broadband in 2010.

Regulatory forces including the State Council’s pursuit of three-network convergence (telecom, broadcast TV and Internet) are expected to reshape China’s pay-TV landscape in the medium term as telcos and cable companies enter each other’s businesses and deploy double and triple-play packages. In parallel, rising broadband adoption will create significant opportunities for emerging Internet video players.

As a result, Eva Zhang, Media and Communications Analyst at SNL Kagan commented: “China’s pay-TV market continues to see exceptional growth as cable digitization and IPTV rollouts invigorate product offerings and boost average-revenue-per user. Over the coming 5 years we expect cable and IPTV ARPU will grow at 13.7% and 5% CAGR, respectively.”

Contact Christina Twomey, Press Relations, at 434-951-6914 or ctwomey(at)snl(dot)com for more details and specific media requests for data, analysis and interviews.

About SNL Kagan
SNL Kagan, a division of SNL Financial LC, is a comprehensive resource for financial intelligence in the media and communications sector, including the broadcasting, cable, entertainment, motion picture, telecom, wireless, satellite, publishing and new media industries. The SNL Kagan suite of products integrates breaking news, comprehensive data and expert analysis into an electronic database available online and updated around the clock. For more information, visit http://www.snlkagan.com.

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