research Market Intelligence /marketintelligence/en/news-insights/research/state-of-taiwan-online-video-subscription content
BY CONTINUING TO USE THIS SITE, YOU ARE AGREEING TO OUR USE OF COOKIES. REVIEW OUR
PRIVACY & COOKIE NOTICE

Login to Market Intelligence Platform

New User / Forgot Password


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *

* Required

In this list

State Of Taiwan Online Video Subscriptions

SNL Banker

Credit Analytics Case Study: Carillion Plc

Live Linear OTT Streaming Bumps Up The Multiscreen Transcoder Market

FOX Could Reap Substantial Rewards For 2026 World Cup

Technology, Media & Telecommunications
State Of Taiwan Online Video Subscriptions

Highlights

The following post comes from Kagan, a research group within S&P Global Market Intelligence.

To learn more about our TMT (Technology, Media & Telecommunications) products and/or research, please request a demo.

Apr. 16 2018 — Subscription video on demand has struggled to gain ground in Taiwan due to the prevalence of free content in the form of value-added video options utilized by telcos in an extremely saturated and competitive mobile market, legitimate ad-supported video platforms, and pirated content.

Kagan, a media research group within S&P Global Market Intelligence, estimates that mobile penetration rates reached 124% in 2017 and are projected to climb to 140% by 2022. The major mobile players in Taiwan (Chunghwa Telecom, Taiwan Mobile Co. Ltd., and FarEastOne Communications) each offer forms of over-the-top video. Taiwan is also characterized by high rates of video piracy. In June 2017, an iQIYI Inc. executive claimed that levels of piracy in Taiwan exceeded those in China. He said Taiwanese regulators have not done enough to combat piracy and shore up the legal video market.

Taiwan mobile, broadband and multichannel penetration

For those SVOD players operating in the market, we have identified iQIYI, Catchplay On Demand, and Netflix Inc. as having made the most progress.

IQIYI is China's most popular SVOD service in terms of estimated paid subscribers. In March 2016, the service expanded to Taiwan in order to monetize its content in the second largest Chinese-speaking market in the world. The service operates both ad-supported and subscription revenue models in the country. Currently, iQIYI is a subsidiary of Baidu Inc., but the streaming service and its parent have recently announced plans to list iQIYI service on the Nasdaq Stock Market, having submitted a draft prospectus to the SEC for an IPO. Baidu plans to remain the majority shareholder, but listing the company would provide an influx of capital that would provide additional resources for acquiring and producing content in the extremely competitive Chinese OTT market.

Launched in China through a partnership with local content distributor OTT Entertainment Ltd., iQIYI has repeatedly applied to establish a local subsidiary in the country, but policies regulating the type of investment coming into the country from mainland China are prohibitive. Regulators cite the need to protect their right to broadcast and promote their own cultural content, as well as China's insistence on barring Taiwanese OTT services from operating on the mainland as primary factors in the issue.

Catchplay Group's roots are in theatrical and DVD distribution in the Taiwan market. By branching into content production, investment, and aggregation, the group has built a sizable film library that it monetizes through various ventures. In March 2016, with Netflix having launched in the country only months prior, the group launched SVOD platform Catchplay On Demand. The group's existing film assets allowed the service to enter the market with an advantage in terms of diversity of content and new releases. The service provides Chinese and Asian-language films as well as Hollywood content from independent and major studios including Comcast Corp.'s NBCUniversal Media LLC, Time Warner Inc.'s Warner Bros., and Walt Disney Co. The service also monetizes its film catalog through a rental revenue model in Taiwan.

Netflix launched in Taiwan in January 2016 as part of its global expansion. The service has not been successful in partnering with major telcos in the area possibly due to incumbent telcos offering their own OTT packages. Whether by design or default, Netflix instead pursued partnerships with system-on-a-chip manufacturers in the country. In mid-2016, Netflix began partnering with these regional manufacturers as part of its Recommended TV program. Through the program, Netflix evaluates the quality of smart TV delivery of Netflix content, bestowing a Netflix Recommended TV designation to quality products.

Pricing

SVOD is very reasonably priced in Taiwan. All three services register less than 0.3% on our affordability index, which is based on gross national income purchasing power parity. The affordability of the dominant pay TV platform is 0.4%. Even Netflix, which has typically priced its service on a premium tier throughout Asia, is affordable in the market. Netflix's most expensive four-screen subscription also registers lower than Taiwan's dominant pay TV platform on the affordability index. To provide context, Netflix's two-screen plans register 0.31% and 0.19% on the affordability index in the U.K. and the U.S., respectively.

Select Taiwan SVOD affordability


Watch: SNL Banker

Jul. 10 2018 — Transform internal data into vital insight with SNL Banker from S&P Global Market Intelligence. Our solution integrates seamlessly with internal systems to give U.S. community banks and credit unions greater visibility into finances and operations


Credit Analysis
Credit Analytics Case Study: Carillion Plc

Highlights

Co-written by Elijah Harden, Risk Services.

Jul. 05 2018 —

Bankruptcy Summary
Carillion Plc (Carillion), a construction services firm, had “declining profit margins” and “high adjusted debt [due to] reverse factoring and its unfunded pension deficit” according to S&P Global Ratings1 . When Carillion filed for liquidation on January 15, 2018, the company had debt and liabilities in excess of £1.5 billion. Trading in the shares was suspended that same day. S&P Global Market Intelligence’s Fundamental Probability of Default (Fundamental PD) rose to 18.27% in the first quarter of 2017 from 1.32% the previous quarter – the equivalent of the implied credit score falling to ‘ccc’ from ‘bb’2 . An additional 30% increase from Q1 to Q2 2017 brought the Fundamental PD to 24%, six months ahead of Carillion’s liquidation. In the quarter leading up to its compulsory liquidation filing, the median Market Signal Probability of Default (Market Signal PD) was 18%, and reached as high as 29%. The Market Signal PD increased nearly sixfold, from 2.17% to 12.69% (equivalent to a credit score decrease from ‘bb-‘ to ‘ccc+’) during July 2017 in response to a share price decline of nearly 70% during the month. Carillion’s share price fell by 39% on July 10 alone, triggered by a profit warning (the first of three) and the announcement of a strategic review.

Exhibit 1: Market Signal and Fundamental PD Escalation

Source: S&P Global Market Intelligence as of June 11, 2018. For illustrative purposes only.

Business Description
Carillion provides maintenance, facilities management, and energy services to buildings and large property estates, in public and private sectors; infrastructure services for roads, railways, and utility networks. It serves aviation, corporate, financial services, oil and gas, central and local government, defense, healthcare, transport, education, commercial and retail, and residential and leisure sectors. Carillion was incorporated in 1999 and is headquartered in Wolverhampton, in the United Kingdom.

Fundamental Probability of Default Analysis
Upon closer inspection of the Fundamental PD in the third quarter of 2017, business and financial risks were significant problems for the company, with vulnerable and highly leveraged scores, respectively. In the first quarter of 2017, Carillion’s Fundamental PD of 1.32% was better than the UK Construction & Engineering industry median of 4.43%. The Fundamental PD later increased to place Carillion in the worst 25% of the industry by the second quarter of 2017. The most significant factor contributing to the increase in Fundamental PD is Carillion’s EBIT interest coverage, a measurement of the company’s ability to pay interest on debt, which fell to -0.32 in the first quarter of 2017 from 2.75 in the fourth quarter of 2016 (semiannual data was multiplied by 0.5). The elevated Fundamental PD was also due to total equity and cash interest coverage which stood at -£405MM and 0.09, respectively, in the first quarter of 2017 down from £730MM and 2.7 in Q4 2016. Between Q4 2016 and Q1 2017 EBIT decreased by £132MM to a net loss of £100MM and equity decreased by an astonishing £1,135MM. The Fundamental PD illustrates Carillion’s sizable net losses left the company debt ridden and unable to operate.

Exhibit 2: Fundamental Probability of Default Contribution Analysis

Source: S&P Global Market Intelligence as of June 11, 2018. For illustrative purposes only.

Exhibit 3: Key Developments

Source: S&P Global Market Intelligence as of June 11, 2018. For illustrative purposes only.

Copyright © 2018 by S&P Global Market Intelligence, a division of S&P Global Inc.
These materials have been prepared solely for information purposes based upon information generally available to the public and from sources believed to be reliable. S&P Global Market Intelligence, its affiliates, and third party providers (together, “S&P Global”) do not guarantee the accuracy, completeness or timeliness of any content provided, including model, software or application, and are not responsible for errors or omissions, or for results obtained in connection with use of content. S&P Global disclaims all express or implied warranties, including (but not limited to) any warranties of merchantability or fitness for a particular purpose or use.

S&P Global Market Intelligence’s opinions, quotes and credit-related and other analyses are statements of opinion as of the date they are expressed and not statements of fact or recommendation to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security.

S&P Global keeps certain activities of its divisions separate from each other in order to preserve the independence and objectivity of their respective activities. As a result, certain divisions of S&P Global may have information that is not available to other S&P Global divisions.

S&P Global Ratings does not contribute to or participate in the creation of credit scores generated by S&P Global Market Intelligence. Lowercase nomenclature is used to differentiate S&P Global Market Intelligence PD credit model scores from the credit ratings issued by S&P Global Ratings.

S&P Global provides a wide range of services to, or relating to, many organizations. It may receive fees or other economic benefits from organizations whose securities or services it may recommend, analyze, rate, include in model portfolios, evaluate, price or otherwise address.

[1] Source: S&P Global Ratings, Carillion’s Demise: What’s At Stake? https://www.capitaliq.com/CIQDotNet/CreditResearch/SPResearch.aspx?DocumentId=38529831&From=SNP_CRS as published on March 23, 2018.
[2] Lowercase nomenclature is used to differentiate S&P Global Market Intelligence PD scores from the credit ratings used by S&P Global Ratings. S&P Global Ratings does not contribute to or participate in the creation of credit scores generated by S&P Global Market Intelligence.

Credit Analytics Case Study: Carillion Plc

Download Full Report

50 Years Of Altman Z-score, And PD Model Fundamentals – Case Study General Motors

Learn More

Credit Market Pulse March 2018 Issue

Learn More

Technology, Media & Telecommunications
Live Linear OTT Streaming Bumps Up The Multiscreen Transcoder Market

Highlights

Multiscreen transcoding is widely used today to prepare and distribute video content in over-the-top and TV Everywhere services.

Jul. 05 2018 — Multiscreen transcoding is widely used today to prepare and distribute video content in over-the-top and TV Everywhere services. Multiscreen transcoding revenue is forecast to grow to $628.2 million in 2022, up from $415.1 million in 2017. However, revenue is not rising as quickly as the amount of video being delivered. There are a large number of competitors, so price pressure and the move from hardware appliances to software licenses and cloud services is affecting worldwide multiscreen transcoder revenue.

The amount of video streamed via the internet continues to grow. However, not all of the video is transcoded using a broadcast-quality multiscreen transcoding solution from the vendors discussed in detail in Kagan's latest transcoder report. Some of the largest video streamers in the world, including Netflix Inc. and Alphabet Inc.'s YouTube, use an internal solution. Additionally, those who do not need the same level of density or quality may use solutions such as the free FFmpeg or x264 software, particularly for file transcoding. In some cases, a content producer will use the transcoder that is part of its media asset management system rather than a separate transcoding solution.

Growth in live transcoding revenue is being helped by the expansion of TV Everywhere, or TVE, services. Many multichannel video programming distributors continue to expand the number of linear channels and the amount of VOD content available on their TVE systems in order to offer the same ability to view content on other devices as is available via the set-top box, or STB, in the home. For example, Sky Deutschland GmbH is expanding to offer more than 100 linear channels on Sky Go rather than just the Sky Sport channels. OTT provider ivi.ru of Russia added streamed channels to its service in 2018. Nc+ GO of Poland added 22 channels in April 2018.

FFmpeg and open source solutions have more of an impact on the file transcoding market since multiple passes can be done to produce the quality desired. Therefore, file transcoding vendor revenue is not growing as quickly as the live transcoding vendor revenue. However, some content producers and OTT VOD providers do choose to buy products and services for file-based multiscreen transcoding rather than using an internal or open source solution. The amount of content and the number of versions required to monetize that content continues to grow, causing our expectations of revenue in the file transcoding segment to increase by single-digit percentages each year.

Many transcoder vendors offer cloud transcoding services, oftentimes with multiple cloud providers. The cloud providers tend to be agnostic to the transcoder vendors. A primary example of this is Amazon Web Services, or AWS. Even though AWS owns AWS Elemental, many others also run on AWS, including Beamr Ltd., Bitmovin Inc, Encoding.com Inc., Harmonic Inc., Telestream Inc. and Zencoder Inc.

Revenue from cloud transcoding is expected to increase each year as both the overall multiscreen transcoder revenue grows, as well as the percentage of transcoder revenue that comes from transcoder services that run in the public cloud. The advantages of using cloud transcoding simply outweigh any disadvantages for most use cases.

This article provides some of the highlights contained in Kagan's latest in-depth report titled "Worldwide Transcoding: Live linear OTT streaming bumps up the multiscreen transcoder market," which updates vendor activity and provides global forecasts for live and file transcoding revenue by region, as well as cloud transcoding revenues as a percent of total revenues through 2022.

Video CDN Revenue To Reach $2.2 Billion In 2022

Learn More

Technology, Media & Telecommunications
FOX Could Reap Substantial Rewards For 2026 World Cup

Jul. 05 2018 — The 2018 FIFA Men's World Cup has struggled with U.S. viewership due in part to the timing of matches aired from Russia. But the June 14 announcement that the quadrennial cup competition will head back to North America in 2026 was likely music to the ears of TV rights owners Telemundo and 21st Century Fox Inc.'s FOX Sports. The choice of a three-country combination — the U.S., Canada, and Mexico — does not come cheap for the U.S. networks, however. The two will pay a combined $887 million for the 2026 games, including an additional approximately $300 million bonus paid to FIFA because North America was chosen as the location.

The upside is that the World Cup will take place in more ideal airing times, offering stronger ad pricing and bigger audiences. In addition, the number of teams in 2026 will increase to 48, compared to 32 today.

The current tournament is the first in which Telemundo and FOX Sports took away rights from Univision Communications Inc. and Walt Disney Co.'s ESPN/ABC. The announcement may make up for some of the troubles surrounding this year's competition after the U.S. Men's National Team failed to make the cut. In addition, the tournament is in Russia, meaning many of the games have aired during lower viewing times in the U.S.

Despite the challenges, Telemundo and FOX Sports could deliver higher ad revenues compared to 2014, according to some estimates. Telemundo recently announced that it had reached its goal of $225 million in ad sales for this year's tournament. The networks may be benefiting from unused funds tied to the NBA Finals, which ended after just four games

Learn more about Market Intelligence
Request Demo