ARPU increases to support pay TV revenue growth in Japan

In spite of ongoing cord-cutting on a global scale, pay TV revenue in Japan is set to grow in the coming years.

According to figures from GlobalData, pay TV services revenue in Japan is expected to grow at a compound annual growth rate (CAGR) of 2.2% between 2020-25. This increase is attributed to a growth in average revenue per user (ARPU) in the face of declining account figures.

The report notes that cable TV and DTH pay TV accounts will decline at 0.2% and 0.8% respectively between 2020-25, though this will be slightly offset against a 1.1% CAGR for IPTV accounts. 

Aggregate pay TV ARPUs however are set to grow from US$36.52 in 2020 to US$40.52 in 2025. This will be supported by the growing ARPUs from cable, DTH and IPTV services supporting the overall pay TV service revenue growth

Deepa Dhingra, senior telecom analyst at GlobalData, said: “Despite the steady decline in subscriptions, cable TV will account for the largest share of total pay-TV subscriptions in the country through the forecast period. IPTV’s share of total pay TV subscriptions, on the other hand, will increase from 27% in 2020 to 29% in 2025, supported by growing fiber network coverage in the country, which supports the delivery of quality IPTV services.

“KDDI led the mobile market in terms of pay-TV subscription share in 2020, closely followed by NTT. KDDI will remain the leading pay-TV service provider through 2025. KDDI’s market leadership is because of its strong presence in the cable TV segment and growing focus on IPTV services. Both the operators have been promoting bundled packages combining pay-TV services with fixed broadband and telephony services to reduce churn rates and sustain competition from OTT service providers.”