Despite global slowdown, SVOD battle still fierce in East Asia

In some North American and Western European territories, SVOD subscriptions seem to have reached a glass ceiling. Despite their interest in premium content, households experience SVOD fatigue and major streamers started to lose subscribers. As East Asian markets share common points with those countries – high purchasing power, multiscreen content consumption, high connectivity rates that enable large-scale streaming – alongside differentiated consumption habits, it is uncertain whether they undergo the same trend. Does SVOD actually slow down in East Asia? SVOD penetration: only China has reached its glass ceiling In contrast to the Western markets, East Asian countries are still yet to reach the stage of SVOD saturation. In Japan, the subscriber base still grows strongly and Dataxis estimates this tendency to last until 2027. The ARPU will start decreasing in 2025, thus enabling revenue growth until 2025. Growth is even more dynamic in South Korea, where both the 15 million and the 20 million subscribers’ milestones were passed last year. Quite surprisingly, the ARPUs have already started stabilizing, and have even slightly decreased for some actors. Yet this normally translates to the market having reached maturity. Likewise, the Hong-Kong and Taiwanese SVOD markets combine these two phenomena. On the one hand, their subscriber bases have grown 31% and 35% year-on-year respectively in 2022. They currently amount to 3 million accounts in Hong-Kong and 5 million in Taiwan. On the other hand, the ARPUs on the markets have been stable around 30 HKD ($3.85) and 161 TWD ($5.77) respectively since 2020. Dataxis expects them to start decreasing as of 2023. In contrast, China is the only country experiencing SVOD fatigue in the region. Most platforms lost subscribers at Q4 2022, and the overall subscription number has stabilized around 375 million since Q1 2022. Among other effects, the tremendous success of AVOD can partially explain the current situation of the Chinese SVOD market. Newcomers enter the market to capture a share of the pie As in any other bull market, new players have launched their offer to capture growth, except in China where SVOD perspectives are less appealing and foreign platforms banned. The most successful newcomer over the last few years has undoubtedly been Disney+. It was launched in Q2 2020 in Japan, and now counts almost 3 million subscribers. Dataxis forecasts this number to triple by the end of 2027, thus accounting for a 13% market share. Only Amazon Prime Video and Netflix will enjoy higher market shares by then. Capitalizing on its strong brand awareness in the region, the service was then rolled out at the end of 2021 in South Korea, Taiwan and Hong Kong. It was met with tremendous success in South Korea, where it has quickly...