By Santhosh V Perumal
The increased proliferation of internet protocol television (IPTV) in Qatar will augur well for improved distribution and monetisation of local content as the Middle East and North Africa (Mena) media industry is undergoing a fascinating transformation, according to a report.
“Increased penetration of IPTV in select markets such as Qatar, Saudi Arabia, and the UAE is creating local, digitally connected TV communities, opening up opportunities for improved distribution and monetisation of local content,” Strategy& (formerly Booz and Company) said in a report.
All these trends are combining to create a better experience for viewers, with more local, targeted content, said the report ‘How Young Arabs are Fuelling the Mena (Middle East and North Africa) Media Market’.
Satellite TV continues to dominate the sector, accounting for more than 95% of TV distribution, nevertheless, IPTV has had strong success in Qatar and the UAE in recent years, and “is likely a harbinger of change in the rest of the region”, it said.
Finding that the mobile market is one of the Mena region’s fastest growing media segments; the report said historically, the proportion of paid media has been low in the region, owing largely to the dominance of free-to-air satellite channels, the absence of theatres in Saudi Arabia, and lack of a “cinema going” culture in other populous Arab states.
Spending on leisure activities represents only 2.4% of total consumer expenditure, compared with 9% in the US, it said, adding consumer spending on leisure and recreation activities in the Middle East is expected to grow at a rate of 10% annually, significantly higher than that in most developed markets.
“This will drive a rapid growth in paid media. The proliferation of digital content, demand for on-the-go content, and increased focus on premium local content are supporting its growth,” Strategy& said,
Accelerated adoption of mobile technology has created opportunity across media platforms. Moreover, evolutions in paid and digital media have created new rationales for investment, it said.
“These changes provide regional media players with an opportunity to reset their business models and explore investments in high-quality local content, and offer global players in particular a reason to re-evaluate their presence in the region,” it said.
The regional industry challenges of limited revenue opportunity and high costs, which had previously made it difficult for global players to justify a business case for investment, are rapidly evolving. With improved sector economics and an emerging talent base, the Mena region merits a fresh look.
The favourable demographic changes under way in the Mena region are well known, and represent a growth opportunity for nearly every industry sector, the report said, adding the overall population is expected to grow 1.9% in the next five years, from 317mn in 2014 to 349mn in 2019.
Consumer expenditure should see even more dramatic growth during the same period, rising 10.6% to nearly $2tn.
Technology adoption is also prevalent: in the Mena region’s three largest markets, the use of laptops and smartphones is widespread, while the use of tablets is mixed.
In particular, smartphone adoption is rapidly increasing, nearing the levels of PCs and laptops, especially in the Gulf Cooperation Council (GCC). Mobile subscriber penetration, at 131% in 2014, exceeds the global average of 101%.
Fixed broadband penetration still lags behind the global average, but the gap is narrowing: By 2019, the region is expected to have fixed broadband penetration of 26%, compared with the global average of 42%.
