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Vietnam has been one of the boom markets globally in media and entertainment over 2006-2011, boosted by economic growth, rising disposable incomes and consumer appetite for an increasingly liberal media environment, despite the country’s communist regime.  Vietnam’s urban markets such as Hanoi and Ho Chi Minh are the primary growth centres.  However, political maneuvering and widespread corruption continue to damage consumer confidence, restricting telecom uptake rates and weakening sector growth.

While household possession of digital equipment remains low by regional levels, online adspend and expenditure on telecommunications services has seen impressive growth rates:

  • Vietnam’s household possession of cable TV and a satellite TV system stood at 14.5% and 16.5%, respectively, in 2011;
  • However, online ad spend soared by 149% in real terms over 2006-2011, while consumer expenditure on telecom services expanded by 135% in real terms over the same period. Growth in both indicators was among the upper echelons regionally.
Politics hinder industry developmentAccording to trade sources and analysts, Vietnam’s entertainment and media sector was expected to see the fastest expansion worldwide over 2009-2012, yet growth was somewhat restrained by the global economic downturn of 2008-2009.  For the country to continue its healthy growth rates, and attempt to catch up with neighbours China or Malaysia, Vietnam’s multiple small cable operators have to converge in order to invest in nationwide TV infrastructure, with this driven by state regulation and incentives.  This would lower the price of telecom services and allow greater access to media products for a larger proportion of the Vietnamese population.

However, while the Vietnamese government understands what needs to be done, the country’s complex political environment is not especially favourable to streamlined industry decision-making.  Political vendettas and corruption scandals maintain the consumer market in a sense of apprehension.  The arrest of Nguyen Duc Kien in August 2012, founder of one of the country’s largest banks, with stakes in a wide array of businesses including media and entertainment, sent many Vietnamese running to the bank to withdraw their money.  Vietnam ranked 112th out of 183 nations in Transparency International’s Corruption Perceptions Index in 2011.

This kind of instability reflects on the media market, as consumers are wary of taking out contracted pay-TV and telecom services over the longer term.  Therefore, pay-per-view or pay-as-you-go TV services hold more viability, with IPTV and mobile phone entertainment platforms likely to provide considerable opportunities going forward:

  • Household penetration of cable and satellite TV is expected to reach 21.4% and 22.1%, respectively, by 2020;
  • Consumer expenditure on telecom services will continue to see a rapid increase, rising by 102% in real terms over 2012-2020.

(Source: Hoang Le’s)

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