Asian media back on track

Long-term prospects returning to normal after recent dip

HONG KONG -- The Asian media industry scene has been dented but scarcely damaged by the global recession. After a brief slowdown in some sectors, the investment outlook for Asian media is much the same today as it was a year or two ago – it requires patience, but for investors taking a long-term approach, the prospects look rosy.

Versions of that message were repeated by delegate after delegate at Monday's Asia Media Summit conference in Hong Kong, organized by research house Media Partners Asia.

"The recession has had no noticeable impact on pay-TV subscriptions, though Average Revenue Per User has been flat," said Grant Ferguson, chief financial officer at Malaysia's Astro All Asia Networks. "Indeed, radio has done better than we expected as some advertisers have traded down from TV.

"India slowed down, it didn't go negative," said Rajesh Kamat, CEO of hugely successful upstart Hindi broadcaster Colors, a joint venture with Viacom. "India still has a young population and is buying like crazy."

Hary Tanoesoedibjo, CEO of Indonesian pay-TV operator Media Nusantara Citra, said his company had enjoyed subscriptions growth in 2009 and that ad spend had climbed 8%. "Free-to-air ad growth will remain at over 10% per year for the next five-year and grow as a proportion of GDP," he said.

In other cases the economic slowdown may have forced companies to rethink their business plans and restructure their businesses faster than they might have otherwise.

"People have reset their businesses because of things like access to the debt markets," said Ben Way, managing director and CEO of Macquarie Korea Opportunity Fund, who manages major stakes in TV businesses in Korea and Taiwan. "Asia hasn't yet seen the full effect of the shakeup, there will be more cases of spin-offs and bringing in of strategic partners."

Richard Shim, executive vice president of Korea's CJ Media, said that Korean media firms had definitely suffered in the macro-economic downturn, but as a result CJ Media is now looking more at international expansion. This may include a home-shopping joint venture in India with STAR TV, similar to its pact in China with Shanghai Media Group.

MPA boss Vivek Couto forecast that media earnings will return to double-digit growth from 2010, with the rebound driven by various forms of digital media – by pay-TV platforms and broadcasters across the region and by online in China, Japan, Korea and Taiwan.

Even in the biggest most mature markets like Japan, where the cost of digitization is hurting companies, growth is possible. Tomoyuki Moriizumi, CEO of leading cable network operator Jupiter Telecommunications, said his company is stressing video-on-demand and high definition. Last year, his company enjoyed 28% growth in VoD, with revenues hitting Y2.8 billion ($30 million).

Another recurring theme was that demand for local-language content is growing across the region. "Ten or 12 years ago you could build a pay-TV operation on international product. But Asia has refocused on itself. There is an infinite demand for the vernacular. The next best is internationalized or repurposed international content," said Ferguson.

There was a similar message from Bharat Kumar Ranga, COO of India's Zee TV, and who has launched a Russian-language service, a Bahasa-language service in Malaysia and HD channel Vevia in the U.S. "South Asians are everywhere, they are affluent and Asian channels do well abroad."