Competition to boost pay TV in Middle East and North Africa

The social and political turmoil that has rocked the Middle East and North Africa region has resulted in liberalization measures, which will open up the pay TV sector. Digital TV penetration for the 16 countries covered in the Digital TV Middle East & North Africa report is already approaching 70% of television households.

Report author Simon Murray said: “Digital TV Research forecasts that digital penetration will reach 85% of TV households by 2017. Ten countries will achieve 100% penetration [and Israel will be the first to reach it – this year] by 2017. Penetration in Egypt, the largest Arab-speaking market, will be low at 58%. However, Egypt will boast 11.98 million digital TV homes by 2017; putting it into second-place behind Turkey [18.89 million].”

Middle East & North Africa TV households by platform (mil.)

                    2011  2012  2013  2014  2015  2016  2017
                    ----  ----  ----  ----  ----  ----  ----
Digital cable subs   1.3   1.5   1.7   1.8   2.0   2.1   2.3
Analog cable subs    1.1   0.9   0.7   0.5   0.3   0.1   0.0
Pay IPTV subs        0.6   0.9   1.4   1.8   2.3   2.7   3.1
Pay DTH              5.2   5.5   5.8   6.0   6.3   6.5   6.7
Digital free DTH    36.9  37.6  38.2  38.9  39.5  40.2  40.8
Analog terrestrial  18.8  18.4  17.4  16.2  14.5  12.6  10.8
Primary FTA DTT      1.6   1.8   2.4   3.4   4.8   6.6   8.2
Primary pay DTT      0.0   0.0   0.1   0.1   0.1   0.2   0.2
                    ----  ----  ----  ----  ----  ----  ----
Total               65.6  66.7  67.7  68.8  69.9  71.0  72.1

Source: Digital TV Research Ltd

More than 56% of TV households watch free-to-air DTH signals. There are more than 500 FTA channels serving the Arab world, many of which do not operate in a true commercial environment as they are funded by their local government or by a wealthy patron. FTA DTH penetration will continue to vary considerably among the 16 countries; being highest in Algeria (88%), Jordan (86%), Lebanon (83%) and Morocco (83%) by 2017.

Only 12.6% of TV households legitimately paid for TV signals (analog and digital) by end-2011. This proportion will climb gradually to 17.1% by 2017. Israel will record 78% pay TV penetration by 2017, with two more countries above 50%. However, pay TV penetration will be below 10% of TV households in seven countries. Even so, the number of pay TV homes will double between 2007 and 2017 to 12.3 million, with Turkey accounting for more than half the total.

Middle East & North Africa pay TV revenues by platform (US$ mil.)

                    2007   2012   2017
                   -----  -----  -----
Digital cable TV     499    611    605
Analog cable TV      361    161      1
IPTV                  12    153    563
DTH                1,393  2,116  2,474
DTT                    0      3     31
                   -----  -----  -----
Total              2,266  3,045  3,674

Source: Digital TV Research Ltd

Legitimate pay TV revenues for the 16 countries will grow by more than 20% between 2012 and 2017 to US$3.67 billion. DTH will continue to dominate, though IPTV will grow fast and cable will lose share. Turkey and Israel are expected to contribute US$2.4 billion of the 2017 total, leaving only US$1.3 billion for the remaining 14 countries (or an average of US$91 million each).