OTT on the rise

Leading regional OTT providers and content producers discuss online business models and their future in the MENA

Moderator Nick Grande opened the discussion by asking Maaz Sheikh to comment on the standalone OTT proposition, a relatively new concept in the region.

As a young service, Starz Play is still in the process of “finding its way around”, commented Sheikh. While he sees a definite demand for Starz Play’s offerings in the region, the service in its initial months had to face several challenges.

The method of payment is one such concern, as many people in the region do not use credit cards for online services.

To counter this, the streaming company has launched cash on delivery through a prepaid card.

“It’s unusual for an e-commerce service, but that’s what the market demands. It has more to do with customers’ confidence with the brand and the ability to let go and trust the merchant,” he said.

Samer Abdin agreed with the challenges of online payment in the region. He said that mobile uptake has grown tremendously in the region, with more device penetration, and now it’s a matter of gauging what the viewers want.

In the past five years, viewing patterns on mobile devices have also changed. Now customers are viewing long-form on mobile, which was not the case earlier.

“We haven’t finished learning about our consumers, as we are all operating in a young market. Viewing habits are constantly evolving,” he said, adding that kids’ content and drama are, by far, the most popular genres for Istikana.

Dr Raed Khusheim of Selevision said that his company operates in the OTT space through partnerships with different players in the broadcast chain, including broadcasters, content owners, telcos and satellite providers.

“Selevision is a multi-platform operator collaborating with partners to offer the best services to the viewers. In fact, most of the panellists here today are partnering with us in some way or the other,” he said.

Samer Geissah of du said that, as a telco, du is strong in the IPTV sector and has now introduced du View to extend its services into the OTT realm.

“Our fixed footprint is limited. As of now, du View is available as a VOD service to du TV subscribers. We are also exploring solutions that run over home broadband or mobile network to move to the next level. Growth outside the UAE is exciting for us: we don’t want to limit ourselves.”

The large screen at home is the main screen when you want to

watch premium content. No one likes flickering, buffering or scattering of picture when viewing premium content, Geissah pointed out.

To further develop its IPTV offering, du is in the process of ramping up relationships with studios and independent producers while also collaborating with local companies to provide a 360-degree format.

UTURN’s Al Khatib said that his company was no longer an MCN but had evolved into an MPN – a multi-platform network. With YouTube and Facebook as their main platforms, UTURN uses other social sites such as Instagram and Twitter to gain traction with users.

“Our money comes from advertising revenues from product placements, branded content, branded entertainment, product mentions and sponsorships. YouTube is used to stream to reach our target audience,” he explained.

The content that online platforms produce does not involve a lot of production spend, unlike television, making it quite lucrative. The most popular content on UTURN is short-form content between five and 15 minutes in length, explained Al Khatib.

Fares Akkad of Shahid.net mentioned that people associate Shahid with MBC and the brand equity that comes with it. Shahid has developed new business models and digital strategies and has now evolved beyond a catch-up service to a premium service offering exclusive digital content unavailable on MBC’s linear platform.

“MBC’s transition to OTT through Shahid reflects our wider reach. People still watch Shahid for free, but added services come for $5 per month,” said Akkad.

Should OTT operators in the region worry about the impending entry of Netflix into the MENA market?

With 15m fixed broadband homes in the region, poised to grow to 20m by 2020, and 25m mobile broadband users today growing to 75m, the market offers tremendous potential and all players can have a share of the OTT pie, according to Sheikh.

“Broadband penetration in the region compares to Western Europe, where multiple OTT services coexist. More than 65% homes have tablets in the region, compared to 60% in the US. We have the devices and the behaviour in the region, there is no reason why multiple OTT won’t flourish here,” commented Sheikh.

He also added that Starz Play is testing Arabic content including Khaleeji dramas, Egyptian movies and Turkish content, and plans to launch an Arabic bouquet next year. The way Arabic content consumption is evolving in the region, young people like to watch short- and medium-length programmes rather than long-form series. While there is room for big-budget classics such as Harem Sultan, OTT snack content is quickly gaining popularity and evolving as a lucrative business model.

Do MCNs go beyond YouTube and build a relationship with the telcos?

Al Khatib said that Mobily was the first to support UTURN and that the company has partnered with Zain as well.

There is huge potential in subscription-based content on online platforms, but as a content creator, UTURN remains as agnostic as possible and focuses on advertisements.

Samer Geissah added that du has a strategy to work with OTT providers who face challenges in online payment modes.

“There is a very high rate of credit card adoption, but sensitivity to using them online. We facilitate payment services for OTT companies.”

Statistics show that the majority of viewing on OTT platforms is over Wi-Fi in the UAE. Fares warned that the OTT revolution in the region might pose a threat to telcos and their IPTV offerings unless they proactively devised new business models focused on OTT.

Dr Raed interjected to say that satellite is still a strong platform in the region and will continue to be so, as 96% of viewers watch satellite channels in the MENA region.

The panel concluded that while OTT is a growing force, linear and satellite TV will continue to dominate as the primary screen in the region, especially for premium content.