In a region where getting people to pay for TV at all is a challenge, legitimate pay-TV operators in the Middle East and North Africa (MENA) need exclusive content rights to gain subscribers, says Digital TV Research.
In the fifth edition of the Digital TV Middle East & North Africa Forecasts report, the analyst predicts the number of pay-TV homes in 20 countries of the region will double between 2010 and 2021 to 20.9 million, with Turkey accounting for 37% of the 2021 total. From the 5.4 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.
Yet the analyst also calculated that only about a fifth of TV households legitimately paid for TV signals by the end of 2015. It believes that 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.
The analyst also expects 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 likely supply $206 million, the UAE $141 million and Saudi Arabia $194 million. Revenues in Israel will fall slightly over this period due to greater competition and the conversion of subscribers to bundle, resulting in lower TV revenues per subscriber.
And it is with this in mind that Digital TV Research believes that exclusive content rights will be key, especially for satellite TV platforms such as beIN and OSN. Noting that it has dipped into the deep pockets of owners Al Jazeera, the analyst cited beIN as being successful in building its subscriber base in a short period of time.
“Gaining subscribers in the MENA is no mean feat as piracy remains rampant in most countries,” said the report author Simon Murray. “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.”