Entertainment goes digital as consumers embrace new normal

19 April 2021 Consultancy-me.com 4 min. read
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Digital will account for nearly half of MENA’s media & entertainment revenues by 2024, powered by a pandemic-induced boom in streaming and gaming. This is according to PwC’s latest industry market analysis.

The Big Four accounting and advisory firm zoomed in on 14 segments in the media & entertainment industry globally – with MENA representation coming from Algeria, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar, Saudi Arabia and the UAE. 

In focus is the pandemic’s impact on the industry, and the results are mixed. Physical media – concerts, events, newspaper advertising, etc. – took a significant beating from safety restrictions last year, taking industry revenues for MENA down by over 8%. The only bright spot is digital revenues, which are on a steep incline owing to pandemic-induced consumer conditions.

MENA OTT developments

“To a large degree, Covid-19 and its after-effects have pulled the future forward, as consumers in the region take more control of their own media consumption, faced with an ever-expanding range of channels and content,” noted PwC Middle East partner Fadi Komati. 

An example is over the top (OTT) video streaming, which has had a landmark year in MENA. Dubai-based Starzplay and Shahid are two big players in the MENA streaming landscape. In April 2020 – a month into lockdowns globally – Starzplay saw a 140% plus increase in unique users, while Shahid saw a 56% spike in subscriptions from February through April. 

By May 2020, Starzplay had seen average monthly consumption jump from 12 hours to 19 hours, and Shahid saw 11 million hours of content consumed in a single week in April. Wind in its sails: the MENA OTT market will likely clock a 12% plus compound annual growth rate (CAGR) from 2019 to 2024 per the researchers.

Growth in the MENA online gaming market

Then there is online gaming, which saw a global boom in the immediate wake of the outbreak. MENA was already a vibrant gaming market before 2020, spurred on by a population where nearly 50% is under the age of 24. Through 2020, MENA consumers spent 25% more time playing games than they did in 2019. 

The result: online gaming in the region will mark a CAGR of 8% for 2019-2024, crossing the $4 billion mark in the process. MENA’s gaming market will also outpace gaming worldwide in the near future – PwC put the global online gaming CAGR at just over 6% for the same period. 

Last on the list of digitalising entertainment segments is music. In focus here is Abu-Dhabi-based music streaming and distribution platform Anghami, which registered a 25% increase in listeners through 2020 compared with the year before. A trendy segment on the up is podcasts, which will likely see 30% more listeners this year.

MENA digital recorded music and podcast revenues

Music and podcasts combined will set off on the highest CAGR of nearly 20% between 2019 and 2024 according to PwC, touching the $500 million mark in revenues. One to watch is the podcast advertising segment, which still has some maturing to do but is widely regarded as high potential. 

Resting on these three pillars, digital entertainment is on its way to industry dominance. In 2019, digital made up 37% of MENA entertainment revenues – a figure that grew to 42% last year. By 2024, the digital piece of the industry pie will size up at 46%. For the experts, the direction of the market is clear enough to inspire prompt action from entertainment players.

“In light of these changes in consumer habits and spending, entertainment and media companies in the region must adapt their business models to capitalise on areas of higher growth,” noted Karim Sarkis, partner at PwC’s strategy consulting arm Strategy&. Digital advertising, subscription models, strategic partnerships, geographic expansion and a voice in digital regulation are all pillars of the future entertainment landscape.