Dubai
The Middle East and North Africa region will see large-scale disruptions in the media industry in the next three years, breaking traditional boundaries of businesses as well as pricing, an industry expert told Gulf News.
Vidya S. Nath, research director for digital media at Frost & Sullivan, said that the region is set for a shakeup in business models and technology advancements; Over-the-top (OTT), hybrid satellite broadband services, hybrid Pay TV services and HD will drive competition.
Talking about the regional market at the Cabsat 2016 taking place at Dubai World Trade Centre, she said that competition will intensify as international companies jostle with regional players for airtime and consumer mind space.
The three-day event was inaugurated by Shaikh Hasher Bin Maktoum Al Maktoum, Director General of Dubai’s Department of Information.
According to PricewaterhouseCoopers, the total entertainment and media spend in the Middle East and Africa will increase from $43.5 billion (Dh159.7 billion) in 2014 to $65.9 billion in 2018. Within the region, Saudi Arabia is expected to see the biggest growth, rising by 16 per cent over the same period.
Vidya said that there will be no “cord cutting” — which refers to a growing trend in some countries to cut subscription services in place of streaming services like Netflix; however, he did say that streaming services are expected to grow slowly.
Although the broadband infrastructure and purchasing power in the GCC are drivers of streaming services, which in the UAE includes OSN Go, Shahid.net, Netflix, Icflix and Starz Play Arabia, predominance of free-to-air satellite TV and the current pricing of streaming services are “challenges to its wide adoption”.
While the cost streaming services vary from one-fifth to one-tenth of subscription fees, streaming is still considered a complimentary service.
”OTT providers and broadcasters are dabbling in production for OTT sites as a means to establish brand value ad drive penetration among their subscribers. OTT content licensing will expand to live TV and thereby opening alternatives to satellite TV,” she said. OTT, or over-the-top content, is the industry name for steaming services.
However, due to the growth of millennial and low-cost streaming services, cord-cutting is expected to surge in 2020.
Companies will start “diversifying their services” and satellite will offer Internet Protocol services and multiple services at multiple price points.
“‘Converge to Diverge’ will be the new mantra. Companies will explore multiple avenues to pursue revenue growth,” she said.
The consumer market is ripe for increase in distribution of High Definition (HD) TV channels as well as multi-screen videos. However, she said that falling oil prices, political strife, and inconsistent growth in advertising revenues are challenging the broadcast industry.
However, she said that while consumers are ready for HD content, the amount of HDTV content is sparse. Broadcasters need to leverage the market readiness to deploy more HD channels.
The number of HD channels in the region stood at 195 as of March 2015, up from 134 channels in February 2014.
Although the consumer market is ready, she said that many broadcasters are still apprehensive about HD transition due to the “huge investment” required and lack of “clear idea on monetisation” of HD content. The 4K or ultra high-definition content (four time the clarity and depth of full HD content) will be limited to only a few sports channels by 2020.
