Two Asia-Pacific pay TV services are contemplating IPOs after soaring demand for streaming has transformed their businesses.

News Corp-controlled Foxtel and PCCW's Viu are weighing possible IPOs after reporting big spikes in subscriptions and revenue in 2021.

In Australia, Foxtel's streaming services have turned its business around, lifting total subs 40% over the year and delivering a 33% boost to fourth-quarter revenue.

While Foxtel's traditional set-top box-based business continued its decline, Foxtel's sports package Kayo boosted subs by 132% to 1.08 million, News Corp revealed in its full-year results. Its TV and movie streaming service Binge has racked up 827,000 subscribers in just over 12 months.

News Corp CEO Robert Thomson said the record subscriber growth and jump in revenue had "clearly given us much optionality as we consider Foxtel's future."

He didn't need to spell out what he meant by "optionality" – a stock market listing has long been on the agenda for News Corp, the 65% majority owner, and partner Telstra.

The fast ramp-up in streaming has put the IPO back on the agenda and the company has appointed a team to examine its options.

But analysts warn that, despite the streaming boom, much of Foxtel's profit is still tied up in the higher margins from its traditional home pay TV business.

Binge might be winning the subscriber wars with prices of A$10-A$18, but the home TV service over a set-top box, priced at A$49-A$139 per customer, is still the biggest source of income.

Andy Penn, CEO of 35% owner Telstra, says the telco is a "keen and happy" investor and would back a public listing if it helped support Foxtel's growth.

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According to multiple media reports, if Foxtel does go ahead with an IPO it would likely be in the first half of next year.

PCCW is anticipating a similar frame for a possible IPO of its Viu service, which executives say is close to reaching profitability after a bumper year.

Like Foxtel, the growth has all been in the streaming business while the legacy NOW pay TV service remains flat.

Viu's OTT segment, which services southeast Asia and the Middle East, grew revenue 29% to HK$646 million (US$83 million) and narrowed its EBITDA deficit by 75%. The free TV segment nearly doubled sales to HK$256 million ($33 million) and reduced its EBITDA loss by 54%.

PCCW group managing director BG Srinivas said the OTT business could turn profitable as early as the second half of this year. He said the company was considering strategic partnerships and investments or "a potential IPO in the near future."

Viu had built a robust business through its partnerships with telcos, device manufacturers and advertising agencies, he said. It was also pursuing a "dual revenue" model, raising revenue from both subscriptions and advertising.

Viu online video, the biggest part of its OTT business, improved revenue by 47% in the first half, while advertising sales jumped 66%. It increased the number of monthly users by 37% to 49.4 million and paid subscribers by 62% to 7 million.

The company has also created a surprise hit with the boy band Mirror, one of Hong Kong's hottest acts, formed by Viu's artist management team from the finalists in one of its talent shows.

— Robert Clark, contributing editor, special to Light Reading