Content exclusivity key to MENA pay TV growth

Tuesday, January 12th, 2016 
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Legitimate pay TV operators in the Middle East and North Africa are increasingly relying on exclusive content rights to gain subscribers, according to a new report from Digital TV Research. This is especially true for satellite TV platforms such as beIN and OSN. Dipping into the deep pockets of its owners, beIN in particular has been successful in building its subscriber base in a short period of time.

Simon Murray, author of the fifth edition of the Digital TV Middle East & North Africa Forecasts report, said: “Gaining subscribers in the MENA is no mean feat as piracy remains rampant in most countries. More than half of the region’s homes receive free-to-air satellite TV signals. Furthermore, established pay TV operators now have to compete against new platforms as several IPTV operators put greater emphasis on SVOD than on traditional linear channel packages.”

Despite these hurdles, the number of pay TV homes across the 20 countries covered in the report will double between 2010 and 2021 to 20.9 million, with Turkey accounting for 37% of the 2021 total. From the 5.40 million pay TV homes to be added between 2015 and 2021, 1.98 million will come from Turkey, 0.63 million from Uzbekistan and 0.59 million from Egypt.

About a fifth TV households legitimately paid for TV signals by end-2015. This proportion will climb to 24.2% by 2021. Qatar will record 80% pay TV penetration by 2021, with Georgia (69%), Israel (68%) and the UAE (62%) also high. However, pay TV penetration will be below 10% of TV households in Algeria, Egypt, Jordan, Morocco, Syria and Tunisia.

Legitimate pay TV revenues will climb by 82% between 2010 and 2021 to $5.02 billion. However, growth will only be 25% between 2015 and 2021. Turkey and Israel are expected to contribute 45% of the region’s pay TV revenues in 2021; down from 52% in 2015 and 63% in 2010.

From the $1,028 million pay TV revenues to be added between 2015 and 2021, Turkey will supply $206 million, the UAE $141 million and Saudi Arabia $194 million. Revenues in Israel will fall sightly over this period due to greater competition and the conversion of subscribers to bundles (which means lower TV revenues per subscriber).

Middle East and North Africa pay TV revenues by platform - DTT, IPTV, cable TV, satellite DTH
Source: Digital TV Research Ltd

Satellite TV will continue to dominate pay TV revenues, taking nearly two-thirds of the 2021 total (similar to the 2015 proportion). Satellite TV revenues will be $3.21 billion in 2021, up by $0.62 billion on 2015 and up by $1.54 billion on the 2010 total. Greater competition is forcing down satellite TV ARPUs.

The number of homes paying for IPTV will overtake cable subscriptions (analog and digital) in 2021. There will be 5.36 million IPTV subs in the region by 2021; more than double the 2015 total. IPTV revenues will grow from $140 million in 2010 to $1,022 million in 2021.