Middle East presents huge growth opportunities for Pay TV industry

Tuesday, April 8th, 2014 
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Middle East Presents Huge Growth Opportunities for Pay TV Industry, According to New IHS Report

  • Market quadruples in just 10 years; Fastest regional growth globally

LONDON — IHS Inc. (NYSE: IHS), a leading global source of critical information and insight, today announced key findings from its annual Middle East Media Market Monitor. The report estimates that at the end of 2013, 4.35 million households in the Middle East North Africa (MENA) region subscribed to at least one Pay TV service.

“There are 300 million households in the region and it is growing faster than any other emerging market,” said report author Constantinos Papavassilopoulos, senior analyst at IHS Technology. “That presents huge opportunities for businesses in this sector. Last year was the third in a row and the eighth since 2004 where Pay TV penetration rates grew. We expect those numbers to grow in the years ahead.”

Key findings:

  • The MENA Pay TV market grew rapidly in 2013, as it has done for eight of the last 10 years, reaching 4.35 million subscribers (9.4 percent of the households in the region);
  • 2013 growth was primarily supported by an impressive rise in satellite operator OSN’s customers;
  • High IPTV uptake contributed equally to last year’s Pay TV growth;
  • Satellite’s dominance, as a TV platform, rests unabated in the MENA region;
  • BeIN Sports Arabia and OSN are forming a virtual duopoly in MENA’s satellite Pay TV market; and
  • A large HD channel offer is not complemented by a clear and concrete monetization strategy.

“We examined 13 countries in MENA and looked at data across the operator and technology levels, OTT business models as well as mobile and fixed broadband dynamics. The report is the result of insights across the Media and Telcoms teams that examine both risks and opportunities for businesses operating in the region,” Papavassilopoulos said.

The MENA Pay TV market grew rapidly in 2013

Last year the Pay TV market grew 11.2 percent in terms of market share and 14.13 percent in terms of subscriber numbers. Over the last decade (2004 – 2013) the number of primary Pay TV subscribers almost quadrupled from 1.33 million in 2004 to 4.35 million in 2013, growing at an annual average rate of 14.64 percent. The Gulf states (Saudi Arabia, UAE, Kuwait, Qatar, Oman, Bahrain) account for two out of three Pay TV households (or 66 percent of the total). There are huge disparities in the uptake of Pay TV services across the region where UAE has the highest penetration rate at 85 percent and Egypt the lowest with just 2.4 percent.

2013 growth was primarily supported by an impressive rise in satellite operator OSN’s customers; High IPTV uptake contributed equally to last year’s Pay TV growth

Dubai-based OSN executed a policy of attracting new customers (through acquisitions and enrichment of its content offer) and of targeting new markets that has paid off. Between Q4 2012 and Q4 2013, OSN’s subscriber base increased by 32.3 percent.

One in four Pay TV households (25.56 percent) now take an IPTV offer while just four years earlier (in 2009) only one out of 15 Pay TV households subscribed to an IPTV package. IPTV uptake was highest in the UAE and Qatar. In the UAE, IPTV is the largest Pay TV platform, accounting for 70.82 percent of the market, while in Qatar, Ooredoo’s IPTV service (Mozaic TV) controls the largest market share among all Pay TV operators with 32 percent.