By Maaz Sheikh, CEO of STARZ Play. Watching TV has traditionally been a family experience whereby everyone sits in front of the television waiting for their favourite movie or show to broadcast at a set time. The young Arab population is turning this experience on its head by watching their favourite TV shows and movies online […]
Watching TV has traditionally been a family experience whereby everyone sits in front of the television waiting for their favourite movie or show to broadcast at a set time. The young Arab population is turning this experience on its head by watching their favourite TV shows and movies online through video-on-demand (VOD) services.
With more than 60% of the MENA population aged 25 and under, this shift is leading to a major transformation in the MENA media industry. Adding to this shift is growing broadband penetration and the increasing demand for premium content two behaviours that are creating opportunities for new players and challenging the incumbent model of the broadcast industry. The newly emerging streaming industry will not replace broadcast TV and linear channels, but digital streaming services especially when packaged with device manufacturers and telecom operators will certainly reshape the media landscape.
According to a recent Nielsen Global VOD survey, 21% of respondents in the Middle East and Africa (MEA) have used a paid VOD service to watch their favourite shows and movies. Such VOD platforms are changing the television landscape daily not only by taking eyes off broadcast TV, but by making premium content affordable and available on a range of devices including smartphones, smart TVs and gaming consoles. Furthermore, increased penetration of IPTV networks such as Etisalats eLife service in the UAE and Ooredoos Mosaic service in Qatar allow telecom operators to play a key role as enablers of digital platforms by providing access to additional networks and convenient billing methods.
Content producers and studios, particularly Arabic content producers, are now recognising this shift and are looking for additional ways to distribute and monetise their content through these VOD platforms. These trends are combining to create a better experience for viewers by ensuring more localised, targeted content for audiences in the MENA region.
This combination of content producers, VOD platforms and telecom operators now brings Arab consumers the premium content they want at an affordable price, and offers them greater control over what they watch, when they watch and on what device they watch. Furthermore, with no service-specific hardware requirements like dishes, cables or set-top boxes, access to VOD services is instantaneous and contract-free.
Digital media is also benefiting from the rising use of smartphones and mobile broadband to access social media, e-commerce and VOD services in MENA. According to a recent survey by Strategy&, nearly two thirds of MENA social media users regularly use social networks to seek product recommendations. Digital marketing is taking market share away from other traditional mass media marketing channels not only because of its reach, but because it is much more efficient in targeting selected demographics and offers more measurability. Given the exceptional success of social media in MENA, advertisers are increasingly adding digital and social media marketing spend to their overall marketing budgets, further challenging the revenue streams of the broadcast and linear TV industry.
As established and emerging VOD players take advantage of this industry shift, content is still king. For VOD platforms, content curation is no longer an obscure art form but rather a science based on quantitative data and facts. Content selection is often based on a demand rating that is an aggregation of online search, social media trends, customer feedback and real-time consumption data and other factors, such as 4K quality, that will best resonate with MENA audiences..
These are exciting times for the VOD industry. According to Digital TV Research in the MEA region, 2.8m VOD subscriptions are expected by the end of 2016, with that figure rising to almost 20m by 2021. With subscription VOD revenues expected to increase from USD 124m to $1.24bn over the same time frame, the MENA media industry is starting to sit up and take notice.