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Gaming Fuels The Online Content Market - Asia-Pacific's online content services market continues to see robust growth, thanks to online gaming
Gaming Fuels The Online Content Market


NewswireToday - /newswire/ - Singapore, Singapore, 2008/07/29 - Asia-Pacific's online content services market continues to see robust growth, thanks to online gaming.

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Even as it battles piracy concerns, revenues for paid online content rose 25.6 percent in 2007 and are expected to grow by 21 percent this year, reaching a market size of US$4.67 billion by end-2008.

While online music and video have suffered the effects of piracy, the online gaming segment has managed to shake-off such threats, accounting for as much as 81.3 percent of the revenues in 2007. Revenues from online music accounted for about 10.8 percent last year, while the remaining 7.9 percent is attributed to online video services.

New analysis from Frost & Sullivan (, Asia Pacific Online Content Services Market, reveals that the paid online content services market - covering 12 Asia-Pacific countries ex-Japan - earned revenues of US$3.86 billion in 2007 and estimates this to be worth US$9.2 billion by end-2013, at a CAGR (compound annual growth rate) of 15.6 percent (2007-2013).

Online gaming is expected to lead the growth of digital content at a CAGR of 14 percent (2007-2013), and will continue to account for the bulk of the premium or paid content revenues in 2013 with a market share of 75.1 percent (US$6.9 billion).

Other premium online content services such as news, greeting cards, research, dating and credit reports represent more niche segments and are excluded from this study.

If you are interested in a virtual brochure, which provides service providers, vendors/manufacturers, end users, and other industry participants with an overview of the Asia-Pacific online content services market, then send an email to Sarah Lourdes at sarah.lourdes[.], with your full name, company name, title, telephone number, fax number, and email address. Upon receipt of the above information, an overview will be sent to you by email.

According to Frost & Sullivan industry analyst Kamlesh Kalwar, "Today's Internet has come a long way from being just a medium for disseminating information and is now increasingly becoming the mainstream channel for distributing and accessing 'infotainment' content as well.

"As the percentage of people accessing the Internet for leisure time entertainment grows rapidly, the market for both paid online content services as well as ad-revenue supported free online content services is expected to grow in tandem with this shift in the consumption of entertainment content," he says, adding that the Internet has become a great alternative to traditional media channels for music, videos and games thus spawning a digital culture.

China and South Korea are the two biggest users of premium online content in the region, collectively contributing over 79 percent of the revenues in 2007. China is the single largest online gaming market, with the increasing penetration of entertainment applications among Chinese netizens fuelling this growth. Driven by its online gaming market, China is expected to contribute up to 45.7 percent of the region's paid content revenues by end-2013.

Some of the key factors driving the growth of premium content services are increasing broadband affordability and adoption by households, rising popularity of portable entertainment devices, and the growing focus of ISPs to augment revenues by offering VAS (value-added services) hence increasing the availability of downloadable and subscription-type content services.

Although the different Asia-Pacific countries are at various stages of Internet and online service adoption, the migration to broadband remains the common theme across. As at end-2007, over 57 percent of Asia-Pac households that access the Internet do so over broadband connections.

"As faster Internet speeds enhance the overall online experience, users are spending more and more time online playing games and visiting social networking sites," Kalwar says. "The growing broadband penetration has not only expanded the netizen base, but also created a conducive environment to encourage users to spend a greater amount of time online engaging in entertainment activities by enabling the convenient sharing, personalisation and sourcing of relevant content."

He adds, "As such, premium online content services and applications like audio- and video-streaming and downloads, as well as online gaming is expected to see a surge in demand."

Kalwar however cautions that the widespread availability of free online content, both legitimate as well as illegal downloads through online pirate sites, BitTorrents and various P2P (peer-to-peer) networks pose major obstacles for wider uptake of paid online content. This has affected the online music and video segments substantially due to the very transactional nature of the revenue model.

China's legal music downloads which accounts for only about one percent of the region's online music download is an indication of the severity of damages. Online gaming however, to a certain extent survives such piracy threats as gamers need to be a registered with the game provider to partake in multiplayer community games.

Kalwar says, "In an effort to shake-off the ghosts of piracy, stakeholders are grappling with the right business model to monetize content. For selected content, particularly online video and music streaming services, the ad-sponsored revenue model has been widely used.

"Game providers on the other hand have adopted the FTP (free-to-play) revenue model where gamers are not charged an upfront cost to play games online, and instead aim to profit through in-game advertising and virtual sale of in-game items like weapons, ammunition and such. In nascent markets, there has been a consistent attempt to increase sampling by giving the base version for free and charging for the advanced versions once the subscriber is hooked," he adds.

Such FTP billing models, richer and wider product offerings, and the growing popularity of MMORPG (massively multiplayer online role-playing game) is expected to drive growth in the online gaming segment.

The Asia Pacific Online Content Services Market study is part of the Communication Services Growth Partnership Service program, which also includes research in the following markets: WAN services, enterprise mobility, IPTV, user-generated content (UGC), social networking, broadband access technology, mobile content, telecom services, managed and hosted services, and network transformation case studies. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants. Analyst interviews are available to the press.

Frost & Sullivan, the Growth Partnership Company, partners with clients to accelerate their growth. The company's TEAM Research, Growth Consulting and Growth Team Membership empower clients to create a growth-focused culture that generates, evaluates and implements effective growth strategies. Frost & Sullivan employs over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 30 offices on six continents.

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Gaming Fuels The Online Content Market

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