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APAC sports media industry set for modest growth, report says

Indonesian football - one of Asia-Pacific's sporting hotbeds. (Photo by Syamsul Bahri Muhammad/Getty Images)

Media industry research firm Media Partners Asia is predicting solid, if undramatic, growth in Asian sports television and OTT revenues, and media rights values, in the 2019-24 period, driven by international mega-events and domestic sports properties.

The sports media industry in Asia-Pacific has been under pressure in recent years, with pay-television broadcasters reining in spending and the value of many sports media-rights properties declining.

MPA, which is publishing a report on 11 sports media markets in the region – Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, Philippines, Singapore and Thailand – told SportBusiness this week it expected “rationalisation” of spending on certain media-rights properties to continue. But the company expects spending, and sports media sector revenues, to increase overall.

Revenues from sports television and OTT services increased by 7.8 per cent in 2019, to $5.2bn (€4.5bn), according to the report. Sports rights costs in the markets were $5.5bn in 2019, an increase of 2.4 per cent from the previous year.

Sports television and OTT revenues are projected to have a 6.7-per-cent compound annual growth rate until 2024, to reach $7.2bn, and sports rights costs a 3.8-per-cent CAGR, reaching $6.6bn.

MPA senior analyst Srivathsan A R said: “There is money to made if you are smart – if you deal with certain rights at a certain time and package them well. There is demand for sport that is not going away.” 

A chunk of MPA’s projected growth in spending on media rights between 2019 and 2024 is due to the Olympics and Fifa World Cups taking place in 2020, 2022 and 2024. But some Asian domestic properties will also be important in driving growth, the company said.

Srivathsan said there would be growth, “especially in markets where a domestic property has a good following”. He picked out the football leagues in Thailand and Indonesia, and the basketball league in Philippines, as examples.

He said: “As long as the domestic media ecosystem is working, and there are properties which sustain this – and new properties such as the rugby league in Japan…that kind of ecosystem will grow.”

Markets that are more dependent on international properties, on the other hand, are “harder to predict. In general the property values for international property rights have come down moderately in the last couple of years, but they will stabilise over the next three years.”

MPA executive director Vivek Couto said the emergence of OTT services such as Foxtel’s Kayo Sports in Australia and Sky Sport Now in New Zealand would support sports media rights spending and industry revenues.

He remarked: “Investment in premium sports rights is often proving scalable and sustainable, when driven by…Pay-TV operators investing to retain high-ARPU customers and grow a new OTT segment, anchored to product innovation with premium sports at the forefront.”

Couto said Japan was currently “underestimated” in terms of its growth potential, noting “DAZN has come in on OTT, but i think you can expect pay-television clawing back some rights over the next few years. Japan has a lot of depth”.

Srivathsan added that the sports media-rights market in the Asia-Pacific region was at a stage of maturity where a change in approach by rights-holders was required.

He said that rights-holders “cannot hope any longer that someone will buy their rights, and they can do whatever they want with them and not be bothered whether [the buyer is] profitable or not. Those days are done. It has to be a mutual effort between rights-holders and media to grow the business, to grow that property in the market…It’s kind of a call for people to collaborate a bit more, to be thoughtful and not squeeze each other. It’s not a zero-sum game”.