Subscription video on demand (SVOD) will rise to 28.3 million users in China in 2016, as OTT players secure exclusive rights to paid sports content such as English Premier League, finds new report from Pyramid Research.
The report shows that the uptake of subscription video on demand (SVoD) services in China will rise to 28.3 million users and generate over US$1.2 billion in 2016, accounting for 6% of overall pay TV revenue. This development goes hand in hand with FTTH/B connections nearly doubling from 66 million in 2014 to 117 million in 2016.
Leading Chinese OTT players LeTV and PPTV now broadcast more English Premier League (EPL) games in China than traditional broadcast channels such as free-to-air (FTA) platforms. From 2010 to 2013, EPL games were free to watch on FTA TV platforms, OTT platforms and online platforms such as the “Chinese Yahoo” Sina. These platforms, on the other hand, had to pay content holders based on traffic and advertisement revenue. In the 2014-2015 season, however, the owner of EPL games in China, Super Sports Media Group (SMGG), raised the annual fee for EPL games from US$1 to US$11m. After this raise, only the cash-rich OTT providers PPTV and LeTV, together with SMGG’s online platform, were able to pay for this high-value content.
“It is fascinating to see that OTT plays a bigger role in securing exclusive rights for paid sports content in China,” comments Hansang He, analyst at Pyramid Research. “As FTA platforms find it more challenging to pinpoint sports viewers to shore up advertisement revenue, OTT players will seek further differentiation with premium sports, which can be as valuable as extensive film and television libraries.”
Pyramid Research predicts that Chinese OTT players will be well positioned to charge subscribers for EPL-only packages via a combination of VOD options within the next couple of years. This will include charging per game, per club, on a weekly or monthly basis, on top of existing subscriptions and in combination with other exclusive sports packages.
Original title by IPTV News: Premier League driving SVOD uptake in China, says report