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

Key findings in the report include:

  • Despite IPTV gaining momentum, cable continues to dominate China’s pay-TV landscape, accounting for 95.7 percent of multichannel subscribers and 91.2 percent of video service revenues in 2010.
  • 47.0 percent 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 percent 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 percent 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.

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