Television consumption has gone through a revolution with the explosion of over-the-top (OTT) players in the online sphere such as Netflix and Hulu. This major disrupter in traditional television models has transformed the way audiences consume content.
Despite the growing popularity of OTT around the world, in the Middle East and North Africa region pay-TV still dominates, with rising figures in viewership and revenue.
Broadcasters in the Mena region have been quick to react to the digital content revolution by redoubling their efforts to provide viewers with higher-quality programming in line with international standards that often surpasses the quality of online programming. Investment into live sports content is at an all-time high, catering to the growing number of sports fans in the region.
Additionally, the rise of innovative digital technologies such as the adoption of ultra-HD, or 4K, forms part of the mainstream in the UAE, offering incredibly high-quality programming.
As a result, the number of primary pay-TV households in the Mena region increased to 4.8 million at the end of last year, according to a recent IHS study, which is a year-on-year growth of 12.4 per cent. Pay TV revenue in the region grew by more than €100m (Dh416m) to €873m from 2013 to last year. The growth of pay-TV is expected to continue through 2019 in the region, with primary pay-TV households reaching 6.6 million and revenue increasing to €1.7 billion.
Nevertheless, the rise of the regional OTT distributors Starz Play and icflix, which provide quality regional and international programming in a number of languages and on a number of screens, has disrupted the traditional pay-TV channels. There is a growing demand for OTT in the region, as these services give viewers more choice of when and where they consume programming.
Regional viewers, however, do not favour a particular provider, pay-TV or OTT, so long as they deliver great programming over multiple screens. This has caused broadcasters to react with OTT propositions of their own, becoming the new disrupters. In addition to offering its own multiscreen services, pay-TV also offers its subscribers stand-alone and bundled forms of OTT.
The global rise of low-cost OTT services may well prepare the market for a new generation of pay-TV subscribers by instilling in an entire cohort of audiences the habits of paying for content.
How can pay-TV providers continue their dominance?
Regional broadcasters are increasing investments to produce more robust local content, which is in high demand throughout the region. These include localised documentaries, entertainment shows in Arabic and popular regional versions of international reality shows such as The Voice Ahla Sawt and Arabs Got Talent.
In addition, many pay-TV channels in the region offer international series and movies dubbed into Arabic, ensuring that viewers experience programming that is easy to understand.
The vast majority of regional audiences still consume most of their content on TV, with set top boxes, IPTV and free-to-air channels dominating content consumption. However, pay-TV providers are keeping up with increasing viewer demands by using the internet advantageously.
Price wars between OTT and pay-TV players will eventually come into play; however, as long as pay-TV companies follow robust business plans, consolidate smartly, efficiently employ local talent and resources, and prioritise Arabic content, pay-TV in the Mena region will continue to thrive.
Sanjay Raina is the general manager for Fox International Channels in the Middle East, North Africa and PakistanSanjay Raina is the general manager for Fox International Channels in the Middle East, North Africa and Pakistan
business@thenational.ae
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