MENA youngsters to spur rapid growth in digital video revenues

13 February 2018

Online video revenues are ready for a growth spurt in the Middle East and North Africa according to professional services firm EY, with increases of as much as 35% per annum in some markets, driven by a sizeable youth population entering into maturity.

MENA’s collective video content market of today is worth just over $3 billion according to a new report from assurance and advisory providers EY, with the Big Four firm expecting the market to grow 40% to reach ~$4.3 billion by 2021. As it stands, TV advertising and TV subscriptions account for roughly $1.2 billion and $1.58 billion of the current pie, projected to rise to $1.61 billion and $1.95 billion in the coming period with respective annual compound growth rates (CAGR) of 5.5% and 7.4%.

Regional revenues in Advertising Video on Demand (AVoD) and Subscription/Transactional Video on Demand (SVoD/TVoD), however, are forecast by the consulting firm at a CAGR of 25.5% and 26.2% in the coming three years, with AVoD rising from $162 million in revenues in 2017 to $402 million for 2021, and the combined subscription and transactional take to jump from $135 million to $342 million in the same period.MENA’s video marketTogether, this more than doubling of revenues will see digital’s market-share climb from 9% to 17.3% in just three years. With most regional markets set to record a rise of between 22% and 35% in online video growth, the digital consumption growth rates in MENA are among the highest in the world, driven by a sizeable youth population, high rates of or fast-improving mobile connectivity, and an influx of new streaming platforms into the market.

Meanwhile, Pay TV is expected to drive the growth of MENA’s television market, as the region’s  900 free-to-air channels – including approximately 500 added over the past decade – contribute to slowing growth in advertising revenues and the suggestion of saturation. The report further notes that the content of free-to-air channels in the region is typically Arabic and geared toward the mass market, whereas Pay TV is beginning to fill the gap for the region’s young and increasingly discerning viewers, with channels such as MTV Arabia having converted to a paid content model already.MENA's linear TV landscapeThe markets of the GCC together with Jordan and Lebanon and combined with Algeria, Egypt, Tunisia and Morocco currently represent over 48 million TV households, yet less than one tenth of these homes are believed to be paid television subscribers, and only one fifth are said to regularly watch online video. There are, however, significant differences in the media landscape between the countries examined.

For example, Egypt, with more than 20 million estimated TV households, and Algeria (7.5 million) and Morocco (6.3 million) all have Pay TV subscription rates of below or around 5%. Bahrain, Qatar and the UAE on the other hand are closer to one half or above (with the UAE nearing two thirds), albeit with far fewer TV households at between 200,000 for Bahrain and 1.8 million in the Emirates. These three nations also record high rates of online viewing, at around 40% or above of their TV households, compared to around 15% for Egypt and lower again for Algeria and Morocco.MENA's online video landscapeYet, with the projected 22%-35% three-year growth-rate in revenues across most MENA markets in mind, the authors note that the more mature Pay TV and online video ecosystems, such as those in Qatar, Bahrain and the UAE, will be expected to register stronger average revenues per user (ARPU) growth, while increasing subscriber numbers will fuel the growth in the cited countries of North Africa.

All-in-all, this growth will be led by the younger demographic. As stated by the report; “As teenagers and young adults enter the workforce and become paying consumers (or customers advertisers will pay for), they add a significant boost to media spends.” Naturally then, as the report points out, the youngest markets will tend to be the fastest growing ones, and over 25% of the markets in countries such as Egypt and Morocco are composed of those in the 10-25 year age bracket, while Saudi Arabia, Oman, Qatar, and Kuwait are made up of at least one fifth of this generation.Demographic impact on media growthTogether, the respective growth rates of around 6% and 26% projected for linear television and online video as driven by this younger generation marks MENA as the biggest growth market in the world bar India and Indonesia. As such, the authors of the report contend that content providers will need to further zone in on this younger demographic if they’re to capitalise on the region’s growth potential.

The report states; “To capture a piece of this growth, content creators would be well served to focus on relevant genres for this youth audience, which may include sports, premium action or coming-of-age films. Marketing will also need to focus more on social media, where significant time is spent, and digital interactivity will become key to drive sticky consumption.”

Indeed, 57% of MENA viewers surveyed in 2015 said that they watch live video content more if it has a social media tie-in, placing the region only behind Asia. And while the report foresees the emergence of several new customer segments, it concludes, “the game changer and most disruptive innovations will come from interactivity with customers.”

“Through smartphones, content platforms can create immersive ‘play along’ experiences with reality TV, ‘vote and be counted’ involvement, ‘guess what happens next’ challenges and much more around episodic content and events, particularly sports. We believe this new segmentation will drive a more focused approach to the creation of quality content, and as the inevitable shift takes place to data-driven decision making, the customer will truly benefit,” the report said.


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Qatar named a 5G global leader on Arthur D. Little maturity index

22 March 2019

Qatar has been assessed by Arthur D. Little as one of the world’s leading nations for the deployment of the 5G network, performing particularly well for its technical infrastructure.

The world’s oldest management consulting firm has released a report on the latest generation of mobile communications technology, and one of the Middle East’s youngest independent states has featured as among the most globally mature in the space. In its latest report on the roll-out of 5G networks, Arthur D. Little has named Qatar as being among a handful of leaders worldwide.

The ‘5G Country Leadership Index’ report compiled by Arthur D. Little – which benchmarks more than 40 countries across the globe – has identified Qatar alongside the US, Australia, Switzerland, Finland, Spain and the UAE as global 5G leaders, with South Korea leading the pack. Qatar, however, featured in the very top echelon for infrastructure availability, behind only Korea.

The index was determined through a detailed analysis of both a country’s technical infrastructure and its tendency for 5G commercialisation, the latter where Qatar evidently lost marks despite still featuring in the ‘leaders’ category – where the UAE also just managed to sneak into the mix ahead of close ‘followers’ such the UK, Italy and Japan. Saudi Arabia, meanwhile, was assessed as a ‘laggard’.Qatar named as a world leader on Arthur D. Little global 5G indexAccording to the firm, the leaders on its index have commonly announced ambitious goals for 5G launch or launched already, have successfully trialed multiple use-cases with 5G spectrum allocated high performance backhaul infrastructure deployed,  and have demonstrated a willingness to adopt new services along with having the right level of competition to foster commercialisation.

“Future business competitiveness will rely on 5G networks, making their fast deployment essential, said Karim Taga, the consulting firm’s global Telecommunications, Information Technology, Media & Electronics (TIME) practice leader. “During 2019, we foresee that dozens of operators will launch 5G services commercially, eventually improving their countries’ ranking. The race is on!”

From a regional perspective, Arthur D. Little assessed Southeast Asia as the most advanced, while noting the states of the GCC as also ahead and jockeying for the lead – although the only other Middle Eastern nation to feature on the benchmarking index other than the UAE, KSA, and Qatar was Kuwait, which landed in the group of  more distant ‘followers’, albeit ahead of the likes of Canada and Holland.

“5G is the first mobile network generation which promises the data throughput, latency, and flexibility to enable the next level of digitisation across consumer types,” said Taga. “In Qatar, especially vertical eco-systems and corporates will benefit the most from 5G. Use cases based on 5G like AR/VR and enhanced video are suited for smart venues and smart city to enable a next level user experience.”