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FS WP CABSAT RS 03 Layout 1 Industry Outlook on TV-Everywhere in the Middle East Frost & Sullivan White Paper Prepared for Industry Outlook on TV-Everywhere in the Middle East TABLE OF CONTENTS A Snapshot of the Middle East North Africa (MENA) for TV-Everywhere..............................................4 Summary............................................................................................................................................................5 TV-Everywhere - Going Beyond Airwaves....................................................................................................6 Open Sesame - The TV-Everywhere Ecosystem ..........................................................................................7 Analysis of Drivers and Restraints ..............................................................................................................10 DRIVERS ....................................................................................................................................................10 RESTRAINTS.............................................................................................................................................11 TV-Everywhere in the GCC - An analysis ..................................................................................................12 Case Study - OSN Play .................................................................................................................................15 Company Profiles...........................................................................................................................................16 2 © 2014 Frost & Sullivan Industry Outlook on TV-Everywhere in the Middle East I think it’s (technology) brought the world a lot closer together, and will continue to do that… The most corrosive piece of technology that I've ever seen is called television — but then, again, television, at its best, is magnificent. Steve Jobs, Rolling Stone, 2003 For the first 50 years of the Internet, online video seemed like a bad word for media companies. Video viewing over the Web was mostly inundated by an underground movement through peer-to-peer sharing sites with most of the content comprising pirated downloads, and nobody making any money out of it. Later, when mobile penetration continued swiftly, cellular networks found it even harder to push out video. There were too many devices, too many formats, too many protocols to contend with, user experience was jittery, and revenue way too little to consider it a serious business then. However, the success of providing a multiplatform, multimedia video experience to consumers, and Today, these alternative media have become mainstream. capitalising it, hinges on a shaky tightrope. The From what was once a closeted in-home, by-appointment competitive landscape is dense, technologies still diverse, living room TV experience, video is now increasingly an and business models are fledgling for service providers on-demand anywhere-anytime-anything application that to carve out a respectable market share in this space. occupies considerable real estate in our lives through our smart TVs, computers, mobile phones, and This White Paper provides an overview of trends in the innumerable portable gadgets. region, an overview of the TV-Everywhere ecosystem, and a case study from MENA. The Middle East and North Africa (MENA) is on the threshold of this phenomenon. With 76% highspeed broadband penetration, 77% digital TV connectivity, and over 100% mobile device penetration, the region is poised for a rapid uptake of TV-Everywhere services. 3 © 2014 Frost & Sullivan Industry Outlook on TV-Everywhere in the Middle East A SNAPSHOT OF THE MIDDLE EAST NORTH AFRICA (MENA) FOR TV-EVERYWHERE Population, GCC represents about 13% of the MENA, 2013 total population, out of which over 50% comprise expats. Pay TV Households Total TV Households 80 60 Television Million(M) 40 Stats, Digital, 77% Digital, 95% MENA 20 2013- 75.9M 2018- 81.7M - 2013 2015 2018 The Middle East is accelerating towards 100% digital TV penetration. TV here is dominated by free to air satellite channels. Pay TV as a % of total TV HHs will likely increase from 8% in 2013 to 10.5% in 2018 driven by growth in pay satellite and IPTV. Oman KSA 120% UAE 7 10 16 60% Global, Highest Broadband Speed 17 Connectivity Kuwait Qatar Stats, 2013, Average Average Cellular 9 11 MENA Internet Subscriptions 0 5 10 15 20 Penetration per 100/ population Mbps FTA channels Satellite IPTV TV Everywhere Providers Providers Providers 699 7 14 25 Predominance of FTA In linear TV Telcos investing Comprises a mix of is a challenge for services, paid significantly in IPTV, telcos, content alternative media satellite will gain scaling up their aggregators, growth consistent growth. services; embracing broadcasters and OTT. others. Base Year 2013 Source: Frost & Sullivan analysis, ITU, Net Index, Arab Media Outlook (2011-2015), Kuwait Financial Center, IMF 4 © 2014 Frost & Sullivan Industry Outlook on TV-Everywhere in the Middle East SUMMARY The region is fairly strong in digital TV penetration, and offers several Free-to-air services and a host of In the last decade, MENA was exposed to vagaries in direct-to-home (DTH)/satellite TV and IPTV services. political and economic stability and experienced With increasing broadband connectivity, consumers are fluctuations in growth patterns across sectors. However, lapping up video over the Internet, as well. the region appears to have recovered from such setbacks over the last 24 months. Exhibit 2: MENA Social Mega Trends, 2013-2025 An analysis of upcoming trends in the region reflect a positive outlook. According to Frost & Sullivan’s Mega Trends research on the Middle East and North Africa (MENA), • By 2025, more than 90% of the total population in four MENA countries are expected to live in urban DzǦ dz areas: Bahrain (90%), Kuwait (98.6%), Lebanon (90%), and Qatar (96.97%). • By 2025, the Gen Y population (people aged between 15-34 years) in MENA will account for over one-third of the total population. The demographics of the market and the cultural make-up contribute significantly to the demand for TV- • In 2020, MENA will be linked through 545 million Everywhere. On one hand, the region reflects a strong personal connected devices, impacting business social bondage driven by local and familial communities. models and personal lives in a way that is unforeseeable On the other, more than a third of the population in the today. region comprises expats of various nationalities. Home entertainment and social networking play an important Exhibit 1: Population Breakdown by Age role in people’s lives. All these factors contribute to the Population Breakdown, MENA, 2012 and 2025 demand for more and more content in local languages as Total Population: 395.1 Million Total Population: 472.5 Million well as international media. >64 Years 8.5 9.4 17.1 14.8 While access to content is one issue, the market has to 56.2 51.5 35–64 Years 81.0 85.7 contend with growing demands for optimal Quality of Experience (QoE) and Quality of Service (QoS). 15–34 Years 76.2 72.9 73.3 77.1 Consumers use devices in various form factors, ranging from 5-inch smartphones to widescreen tablets and <14 Years 61.5 58.9 60.3 63.2 Ultrabooks. 2012 Male Female 2025 Content creators and distributors in the region strive to Source: United Nations Population Database; Frost & Sullivan provide the best of both worlds while ensuring monetisation of the medium. These, among other trends, will have a direct impact on the TV-Everywhere industry. 5 © 2014 Frost & Sullivan Industry Outlook on TV-Everywhere in the Middle East The TV-Everywhere market in MENA is slowly graduating Many non-user generated Web sites require a user to from the predominance of user-generated sites to sign into the Web site of the service provider with the subscription-based video portals, offered either by help of a username and password, and select the independent content aggregators or by Pay-TV operators. desirable content. Most users of OTT in MENA are provided unlimited access to tens of thousands of hours While Frost & Sullivan estimates that Over-the-top of content by their service providers. (OTT) services through Pay-TV providers comprise less than 10% % penetration of the total Pay-TV Although free online video platforms such as YouTube subscribers, it is likely to leapfrog over the next three continue to dominate the video hosting / sharing space years, as service providers increase the repository of in the online video industry, a number of online content their content and provide a horde of attractive aggregators have begun to create a niche for themselves video-on-demand (VOD) services in high quality. through affordable freemium and premium models in the Arab world. TV-EVERYWHERE — GOING BEYOND AIRWAVES Leading content aggregators such as TE Live, Shahid, Icflix, and Istikana allow users to stream the latest According to Frost & Sullivan, TV-Everywhere signifies all Bollywood, Hollywood, Arabic, and Egyptian content to media and entertainment video content available on up to five devices based on a subscription model. alternative media such as the Internet or mobile Companies such as Icflix and Istikana offer their services networks and accessible through a number of devices over the Internet for Smart TVs, Laptops, Tablets, including handsets, consoles, and TV sets, among others. Smartphones, and gaming consoles. It does not just imply linear TV channels, but
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