Ultimately, content is still king in the media industry. The difference today is the source of the power doesn’t lie exclusively in owning the audience.
Luke Williams is Sales Director MEA at MediaKind.
Competition in the MENA OTT market is at an all-time high, with consumers embracing the myriad streaming-based solutions available. Digital TV Research suggests the 20 MENA countries will hold 32.65m SVOD subscriptions by 2026, compared to the 14.16m at the end of 2020.
Some of the telco operators who have historically monopolised the regional market are now struggling to draw key audiences to their platforms, despite having direct relationships with their customers. Ultimately, content is still king in the media industry. The difference today is the source of the power doesn’t lie exclusively in owning the audience; it also exists in the way content is delivered to the subscriber base. So, although the telcos continue to control the fixed and mobile networks, those without content offerings are not capitalising on their inherent market advantages and risk becoming pure data pipes in the longer term.
In this mobile-first region, the real opportunity for TV operators lies in capitalising on the growing appetite for streaming to build broader entertainment packages. According to research from PwC, MENA OTT video revenues are expected to grow by 12.3% CAGR between 2019 and 2024. The traditional pay-TV market, by comparison, is forecast to grow by just 0.6% in the same period.
Thanks to substantial investment in broadband infrastructure and their ability to expand the reach and capacity of their network traffic, TV operators already have the core foundations for delivering a great media service. Their sophisticated and unified billing processes make it easy for consumers to access a service and pay for it without friction. These enable TV operators to become orchestrators of entertainment services and deliver open two-way, transparent dialogues between brands and consumers. They can provide the coverage and reach while also leveraging and managing the dual process of owning pay-TV services and streaming content.
The next step for TV operators is to enable subscribers to access more relevant and personalised content and enhance their viewing experience. This means providing a high-performing discovery function, holistic recommendation and aggregation, all within a single platform that reduces the potential for churn.
To fully embrace the shift to streaming, MENA TV operators need to adopt the same processes as the region’s streaming giants – namely, align more closely with web and cloud-native technologies. This will provide the backbone to launch new services at speed, whether it’s a pop-up service for a live event or running a themed channel during the promotion of a film. The development of cloud-native software has opened the door to greater efficiencies in workflow, speed and elasticity. The ability to increase capacity in the cloud means premium channels can be deployed more easily than ever before.
By building their own TV platforms, TV operators can concentrate on providing a point of aggregation for their own negotiated content alongside SVOD and other OTT offerings, leveraging their pre-existing trusted relationships with consumers. For telcos, this starts by building streaming technology within existing infrastructure. They can adopt new technologies such as CVQ (constant video quality) and CMAF (common media application format) to provide reliable broadcast-grade OTT video quality and latency, with the ability to scale to meet consumer demand.
The super-aggregator story is far from complete. It requires a level of consistency and ubiquity we have yet to see in the market. One of the key issues in MENA revolves around the licensing of content. It’s particularly prominent in the sports space, where major federations are negotiating hard with telcos for the right to broadcast on their streaming service.
It’s not a question of just purchasing or creating the content. Once acquired, it also needs to be licensed onto the telco’s platform, on both the traditional set-top box and the array of connected devices. Only then can telcos start gathering insights into consumer preferences and make informed decisions about their content licensing strategy.
Nevertheless, advancements in cloud-based rendering, higher-powered computing capabilities, 5G and mobile video streaming present TV operators with a real opportunity. Telcos in MENA own the networks, and they can connect all the various devices together via one holistic streaming platform.
Luke Williams is Sales Director MEA at MediaKind.
