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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

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.

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

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

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.

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 any free or paid content and live or video-on-demand service.

Exhibit 3: Examples of TV-Everywhere Providers in MENA

Local Video Content Portals Global UGC Portals Business Model Business Model Subscription based Video-on- Free or Ad supported demand; free streaming content Pay-per-view; icFlix, Shahid, YouTube, Pay-per-download Istikana, TE Live Dailymotion Free or ad supported streaming content

Telcos and Pay TV Operators Broadcasters Business Model Business Model Bundled with Pay TV Subscriptions; Free or ad supported HBO, MBC, Al Etisalat, OSN, Pay-per-view; streaming content; Jazeera, CNBC STC, Du Pay-per-download for Video-on-demand Subscription Catch up TV or Live Streaming content for Premium Subscriptions

Source: Frost & Sullivan analysis

These OTT service providers use sustainable business However, in reality, there are several factors that prevent models that help content owners curb piracy and this. Even today, broadband speeds are not uniform improve revenue. across countries, and streaming to different types of devices and networks results in a fragmentation of Frost & Sullivan finds that today, the revenue of several formats, bit rates, and resolutions. In addition, many OTT providers is derived largely from subscription. This media companies continue to treat alternative media as attracts customers who like to enjoy ad-free content a separate department and in several cases, advertising streaming. deals, distribution packaging, and even the technology platform are different from their core TV services. Most leading Pay-TV operators such as OSN, MBC, and Etisalat offer OTT services as part of their Pay-TV Needless to say, an on-demand, always-available content package to subscribers. experience spanning multiple platforms requires a robust ecosystem. While all subscribers have access to the content library, some of the content can be downloaded or streamed On the positive side, TV-Everywhere provides a more fully only as a pay-per-view service. involved engagement with individual viewers, and allows a media enterprise to monitor content viewership, The TV-Everywhere market in MENA is still in early trending of popularity, as well as quality of service. stages of growth. However, Frost & Sullivan anticipates that the market will rapidly mature over the next 24 A typical TV-Everywhere ecosystem includes at least 15 months. different components spanning ingest to management, delivery, monitoring, and playback of content. Out of According to Frost & Sullivan, media and entertainment these, we find seven components are important to products (including books, music and videos) will top the facilitate multiscreen distribution. list of products sold online in 2025 with as high as 82% sales share, globally. MENA will slowly start reflecting Content Delivery Network these trends. While here, television will unlikely fade into Frost & Sullivan defines content delivery networks oblivion as many soothsayers predict in other parts of (CDN) as companies that offer service based technology the world, online and mobile video consumption will and products that enable the delivery of content from increase multi-fold, driving different business strategies their servers to the end user on the public Internet. for media companies. CDN vendors largely have proprietary infrastructure and use a combination of servers, network routing and OPEN SESAME — THE TV-EVERYWHERE intelligent software to enable delivery of content from ECOSYSTEM the host server.

In an ideal world, TV-Everywhere would imply a A CDN can ensure a higher quality user experience by collaborative workflow for a media company that unifies shortening transmission distances through anticipating video distribution to multiple media without duplication user behaviour (based on analytics). Typically, CDNs in processes. deliver larger files that would otherwise take a long time to stream or deliver from the source to the end user and reduce the likelihood of buffering, interrupted streaming, and poor quality of experience.

Exhibit 4: A Typical TV-Everywhere Workflow

Acquisition Aggregation & DistributionDelivery Device &/or Ingest Management

Reporting CPE & Analytics

Website/ Unicast CPE Streaming portal Streaming Server Capture Internet CPE Device Transrating CDN MAM/DAM Streaming CPE Live stream Encoder Server CPE DRM Reporting Multicast CPE CDS Streaming Transcoding CPE Internet Video Storage Interactivity VOD Router CPE CPE Storage Server CPE Reporting & Analytics CPE MAM: Media Asset Management DRM: Digital Rights Management Monitoring CDN: Content Delivery Network CDS: Content Distribution System CPE: Any consumer premise equipment or device including PC, phone, smart TV, set top box, console or similar

Source: Frost & Sullivan

Online Video Platforms Web Analytics

An Online Video Platform is defined a fee-based Web analytics is the identification of criteria and items Software-as-a-Service (SaaS) video solution that enables within a Web site and page, monitoring and reporting of video content owners to ingest, transcode, store, activity surrounding those items, and active application manage, protect, publish, syndicate, track, and monetise of these reports towards improving Web site performance. online video. Online Video Platforms play an essential Performance can mean different things, depending on the part in delivering online video capabilities – with all of purpose of the Web site, desired outcome of the content its complexity and sophistication – to the masses, in and items on the site, and reliability of the site. enabling many media and entertainment companies to manage, protect, and profit from their digital video assets, Web analytics involves the practice of measuring and and in empowering companies across verticals to create manipulating content towards the purpose of building and deliver messaging to the public and improving user engagement, visitor loyalty, membership (or other types of enrollment), content downloads, Ad Insertion advertising revenues, retail sales, and other monetisation Ad Insertion/Online Video Ad Platform is defined as a efforts and outcomes. software system used by an advertising network, publisher, or advertiser to serve, track results, and optimise video ads. Online video ad platforms are also referred to as online video ad server vendors.

Exhibit 5: Examples of TV-Everywhere Solutions

Online Video Platform Market DigitalAssetManagementMarket DigitalRightsManagement

AdͲinsertion Transcoding

ContentDeliveryNetworks OnlineandWebAnalyticsMarket

In effect, Web analytics are designed around the concept A number of crimes related to piracy often go undetected of driving the visitor to take action on the site, whether and are difficult to register. Such offences recurrently it involves creating sales leads, clicking on dvertisements, threaten the online business models of content owners downloading content, or making a purchase from the and distributors in the region, thereby disrupting site. Ideally, these visitors would be compelled to return business models of several participants in the ecosystem. to the site, to build trust with the company, brand, and In order to curb piracy and boost penetration in the Web site and have a positive user experience, all of which region, content aggregators employ advanced online can directly lead to higher site-generated revenues. tools such as DRM on their sites.

Digital Rights Management Digital Asset Management

Digital Rights Management (DRM) is the technology- Digital Asset management (DAM) is defined as a value driven process of flexibly specifying and persistently chain of software solutions that enable the ingest, applying usage permissions to specific digitised archival, indexing, search, retrieval, browsing, annotation, entertainment content titles for specific users. DRM repurposing, collaboration, display, and transport of enables secure distribution and consumption of content digital media in a seamless, collaborative, and secure by binding content-specific license permissions with environment, which is easily integrated with third-party specific installations of the DRM client. systems within the content workflow, spanning the asset life cycle from creation through delivery.

Transcoding Yet, Internet speeds vary from country to country. There are ongoing efforts to improve telecom infrastructure Frost & Sullivan defines transcoding as the process of including fibre deployment in various Middle East converting content from a single input to a broad array countries, abetting this trend. Developments in high - of output formats, definitions, resolutions, and file or speed network infrastructure has the potential to stream formats. This enables the video to be delivered enhance the existing average Internet speed to more to a diverse array of networked and handheld devices. It than 10 Mbps during the forecast period, thereby driving also refers to the process of converting uncompressed an increase in the amount of content online by their or compressed content to a different compressed format creators. to significantly repurpose the content, typically, in the context of a digital media workflow. The impact of this driver is expected to be high during the forecast period. ANALYSIS OF DRIVERS AND RESTRAINTS Rising consumption of online video content in the The Internet and television landscape in the Arab Middle East triggers market opportunities provinces have witnessed a number of disruptive changes with regard to technology and connectivity over the past According to the International Telecommunications few years. A number of factors such as relaxation in Union (ITU) recent reports on the ME, over 50 % of the Information and Communication Technologies (ICT) population in the GCC countries have access to the policies across all the Gulf Co-operation Council (GCC) Internet. There is growing evidence that consumers countries, proliferation in the number of devices increasingly watch content on IP-connected devices that connected to the Internet, growth in the number of are video-capable and, increasingly the time spent online independent Arabic filmmakers and so on, have more or less equals the time spent on watching TV. contributed a great deal towards the penetration of TV- Hence, content creators are seeking ways to distribute Everywhere. the content to multiple platforms.

DRIVERS According to YouTube, it has more than 310 million daily views from MENA, placing it second in the world in Proliferation of Connected Devices and terms of viewership, after the U.S. and ahead of Brazil. High-speed Internet Connectivity Out of these, there are 90 million video views in the Customers demand a high QoE for multimedia video and Kingdom of Saudi Arabia (KSA) per day, which is the highest expect near-TV or TV quality for the same. Such experience number of YouTube views in the world from a particular can be achieved only with bandwidth-intensive high- region. Over 80% of YouTube users in the KSA perceive resolution files. For such QoE to be transmitted, it as the best video library that helps them connect with especially for seamless, non-buffering streaming, viewers people. must be equipped with high speed broadband. The ME witnessed as much as three-fold growth in the number Such trends have been encouraging a number of service of high-speed broadband subscribers from 2010 to 2013. providers to offer content for online and mobile media. On an average, cellular subscriptions comprise about 126% of the population. For instance, the Middle East Broadcasting Corporation (MBC), the largest media conglomerate in the region was one of the early adopters of a TV-Everywhere suite and leverages it for providing a significant amount of online Arabic video content.

Frost & Sullivan believes that this trend will spread wide In the highly competitive online advertising market, data and more companies will follow suit in this market. quality, operational efficiency, and partnerships with technology companies can provide a competitive edge. Boom in local Arabic content availability online Companies belonging to the enterprise and Media and will boost TV-Everywhere adoption Entertainment segments globally utilise these online platforms to engage users and monetise content. According to the Arab Media Outlook (AMO) 2011- However, such trends have failed to gain traction in the 2015, 90% of Facebook users in the ME access the Arabic ME, thereby negatively affecting the TV-Everywhere version of the site vis-à-vis the English version. Evidently, market to an extent. The value proposition of online local language facilitates higher viewership and user advertising in the ME is far less attractive than advertising engagement on websites in this region. While there is a on traditional media such as TV, radio, and print. Hence, lot of local content available over linear television, it has a number of premium / freemium TV-Everywhere been gaining traction online only recently. providers derive their revenues in the form of subscriptions. They do not stream any advertisements on their platforms. With the rising demand for regional content on the Internet, media companies in the ME have begun to offer However, with access to a lot of free sites, many ME a wider library of VOD content to increase consumer viewers have been found to be reluctant to pay for online visits to websites. Apart from this, in order to tap into video content. In order to break even, these operators content monetisation, content creators provide will need to generate significant number of subscriptions, international content with Arabic subtitles and dubbed which is currently a challenge. videos to their consumers. Some content owners, who provide content free to Local Arabic broadcast content service providers are viewers, integrate their websites with ad networks to eying non-linear platforms as a suitable alternative to generate better returns. However, video sharing sites in minimise churn and generate better revenues. the ME are blocked intermittently during political uprisings. This has proved to be challenging for advertisers This driver is likely to accelerate the uptake of TV- to gain their full return on online marketing in the region. Everywhere services in the short term. However, that being said, online content monetisation Other prominent drivers will gain traction as integration with social networking • Decreasing subscription charges on TV-Everywhere sites like Twitter and Facebook is becoming a popular content tool for marketing among content owners in the ME. A • Affordable price plans on mobile broadband number of free service providers such as YouTube and Dailymotion bank heavily on ads to generate revenues. RESTRAINTS The Predominance of Free-to-Air Content Lack of online ad spending slows adoption of TV- While there is indeed a heavy penetration of the Internet Everywhere and smart devices, operators are challenged by a Globally, content owners have embraced analytics to relatively lower Pay-TV penetration in the region as obtain better target ads, measure performance, and compared to free-to-air (FTA) content. There are over analyse user behaviour. 600 FTA channels in the region that disseminate Arabic content for absolutely no charge.

Moreover, many expatriates in the region use illegal DTH connections to watch their local content. Although a Key Indicators for UAE number of Pay-TV operators such as OSN are determined Population Size (Millions) 9.2 to control illegal tapping of signals by deploying HD set top boxes in the United Arab Emirates (UAE), seeding Advertising spend per Capita (USD) 127 boxes in every household is time consuming and labour Digital advertising spend (in USD 54.4 intensive. Unawareness among consumers concerning the millions) value propositions of TV-Everywhere technologies Total TV penetration on HHs 93% thwart investments. The impact of this restraint is expected to be medium during the forecast period. Mobile penetration on population 265%

Rampant Piracy of online content Internet Penetration on population 85%

This restraint not only thwarts the revenue generation Smartphone penetration 63% potential of online content aggregators, but it also affects Percentage of expatriates 64% the content owners at large. Although illegal, availability of content for free of cost always attracts Internet users. Average Internet speed (in Mbps) 5 This trend is widespread in the region, and TV-Everywhere will be prone to low revenues, until this hassle is over- • The UAE has benefitted from foreign investments as come. investors sought to diversify in the region over the last two years. The country has the highest number of TV-EVERYWHERE IN THE GCC — Free Trade Zones (FTZ) for media, underlying the AN ANALYSIS presence of leading media companies in the region.

Among the GCC countries, Frost & Sullivan expects four • Large number of broadcasters including OSN to be leading in the adoption of TV-Everywhere content (formerly in Bahrain) and Sky News Arabia have as well as revenue. These include UAE, Qatar, KSA and selected the region as their headquarters owing to Kuwait. FTZ aids and increased ad spending • Online ad-spend is expected to become an attractive The United Arab Emirates (UAE) space for advertisers as the penetration of fixed and 2 3 mobile broadband would go up through the forecast period. Improved connectivity in the region will 1 4 increase the ad-spends on digital platforms in the years to come. 4.5 • With over 75% of the population owning a laptop and over 60% in possession of a smartphone in the region, 0 5 GrowthPotential ability to access content on the go is gaining importance.

“The UAE, which is the most sought after region • A few Media and Entertainment companies in the by international companies, continues to be region have deployed TV-Everywhere platforms with targeted by vendors in the consumer electronics social media for marketing that will generate a visit sector as well as enterprise solutions, due to its to the website, followed by user engagement and readiness to adopt latest technologies.” - content monetisation. Frost & Sullivan Source: Frost & Sullivan Analysis, Arab Media Outlook, ITU

Qatar • In order to enhance fixed and mobile broadband Qatar connectivity in the region, Qatar National Broadband Network (QNBN), in collaboration with the 2 3 Government, has aimed to roll out fibre optic cable services in over 90% of the households in the region 1 4 and has invested USD 550 Million to facilitate the 3.8 process. • The fibre backbone is expected to deliver broadband 5 speeds of close to 100 Mbps to the region. 0 GrowthPotential “Stable economy, favourable demography of early Source: Frost & Sullivan Analysis, Arab Media Outlook, ITU digital media adopters, and high online ad spends will encourage the growth of TV-Everywhere in The Kingdom of Saudi Arabia (KSA) Qatar.”- Frost & Sullivan 2 3

Key Indicators for Qatar 1 4 Population Size (Millions) 2.1 3.5 Advertising spend per Capita (USD) 104 Digital advertising spend (in USD 0 5 15.8 Growth Potential millions) Total TV penetration on HHs 90% “The TV-Everywhere market in the KSA will grow due to favourable demographics, increased ICT spending, Mobile penetration on population 202% and availability of local content services online.” - Frost & Sullivan Internet Penetration on population 88%

Smartphone penetration 68% Key Indicators for KSA

Percentage of expatriates 67% Population Size (Millions) 28

Average Internet speed (in Mbps) 2 Advertising spend per Capita (USD) 104 • Qatar, a largely oil-dependent country, is one of the Digital advertising spend (in USD 15.8 fastest growing regions in the Middle East. millions) • One of the richest countries in the world with the Total TV penetration on HHs 90% most stable economies, Qatar’s Government remains Mobile penetration on population 202% committed to its vision 2030 blueprint of creating knowledge-based economy. Internet Penetration on population 54% • Being a forerunner in the adoption of latest technologies Smartphone penetration 68% amongst the other ME countries, Qatar is an attractive hub for TV-Everywhere vendors who seek to diversify. Percentage of expatriates 67%

Average Internet speed (in Mbps) 10

• The KSA has a large youth demographic with over Key Indicators for Kuwait 45% of the population under the age of 25 years of age. Population Size (Millions) 3.3 • Time spent online by the Internet population in the KSA is over two hours per day, which is nearly on par Advertising spend per Capita (USD) 158.4 with the time spent in watching TV. Digital advertising spend (in USD 22.4 • Videos are among the most consumed content over millions) the Web. Total TV penetration on HHs 97% • The region has a high penetration of smartphones that includes tablet PCs and phones. Over 70% of the Mobile penetration on population 147% KSA residents own either/both of the two Internet- Internet Penetration on population 79% enabled smart devices thereby, catalysing Internet adoption in the region. Smartphone penetration 48%

• Viewers in the KSA exhibit the strongest preference Percentage of expatriates 50% for native language in the region with over 95% of the population preferring localised content. Average Internet speed (in Mbps) 1.7 • Technology vendors will have to establish a well- structured reseller network in the region to ensure • Kuwait is a relatively small oil-dependent state with an open economy. local presence and to be able tap the potentiality of the TV-Everywhere market to the fullest. • The region accounts for 9 percent of the oil reserves in the world. Despite high broadband penetration (over 80 percent of households) in the region, Source: Frost & Sullivan Analysis, Arab Media Outlook, ITU Kuwait’s network readiness for the ICT infrastructure has been ranked lowest among all the GCC countries Kuwait due to limited infrastructural development. 2 3 • With 93.3 percent literacy rate, Kuwait ranks the highest in the Arab world. • In its 2012 ICT policies for media, the Government is 1 4 also looking forward to make local Arabic content available to its citizens. In doing so, the country is also 3.0 expected to empower independent film production. • This implies more opportunities for local as well as 0 5 GrowthPotential international content creators.

“According to Kuwait’s ICT policies, the country Source: Frost.com analysis, OSN.com, Pixel.com plans to ramp up Arabic content production for digital platform, thereby offering opportunities for TV-Everywhere vendors to diversify in the region.”- Frost & Sullivan

CASE STUDY — OSN PLAY

OSN Play is the TV- Everywhere platform offered by OSN, a Pay-TV network that provides services to 24 countries across MENA. OSN Play, a free add-on for its subscribers, allows one to watch content over the Internet on multiple devices, anywhere, and on demand. This service provides access to 500 movies and thousands of TV series at any point, as catch-up VOD, pay-per-view, live streaming, or ad-supported VOD. As far as possible, OSN Play is built on open standards Currently 30% of OSN’s DTH subscribers are also and a scalable platform, which allows it to not just keep subscribed to OSN Play. expanding its content repository, but also multiply its monetisation opportunities with transactional, advertising, OSN Play’s challenge is to ensure the consistent availability and subscription-based business models. While today the of premium content line-up in English and Arabic digital venture is less than a third of its subscription base, languages, stream on Wi-Fi / 3G / 4G networks, facilitate OSN understands how this platform could become the an intuitive user interface across different operating core of its business in the long term, at the rate at which systems, and deliver to diverse types of devices in consumers are adopting it. Hence, it has been flexible and optimal quality. Hence, a robust centralised content innovative in its approach to this business. It offers management solution that manages storage, formats, digital-only access to certain premium content such as contracts and metadata, facilitates transcoding, rights Hannibal and House of Cards, and eventually, will management, and content distribution powers the integrate services such as OSN Pehla and OSN Pinoy. service. OSN Play uses Microsoft PlayReady for content protection, Smooth Streaming for streaming over fixed “The key to success for this platform is constant Internet or Wi-Fi, and HLS for streaming over 3G and innovation. We have to keep offering new content, 4G networks. Its iPad and Android tablet applications various types of content packaging, yes, but we integrate Inside Secure, a digital rights management also have to be very proactive about being on the technology to decode the PlayReady-protected content. edge of the technology, supporting the best It leverages Pixel as an end-to-end middleware to ensure devices so that there is an incentive for people to network-and-device agnostic distribution that enables pay for our services.” - delivery to iPads, Android tablets, PCs / Macs, connected David Hanson, Director Digital, OSN TVs, and a host of Smartphone devices. It uses Level 3 as the CDN for high-speed delivery of content across a Source: Frost.com analysis, OSN.com, Pixel.com widely distributed region.

Though consumers should ideally have at least 2Mbps to enjoy an optimal viewing experience, OSN Play subscribers are spread across multiple regions with uneven average broadband speeds. Hence, the service provider uses adaptive bit rate streaming that can scale down or up as per the broadband speeds available to a subscriber.

COMPANY PROFILES Adobe's business is focused on the opportunities in two key growth markets-Digital Media and Digital Marketing. This section shares a partial list of leading service providers including telcos, content aggregators and Target Segments: Large and small enterprises across portals that provide TV-everywhere services today in verticals such as Retail, Media and Entertainment, MENA. This section also includes vendors providing Telecom solutions for TV-Everywhere who participated in this Geographic Presence: Global research. Products/Solutions/Offerings: Creative Cloud, Digital Abu Dhabi Media is a multi- Marketing, Web Experience Management, Digital Media, platform media and Creative Suite, Digital Publishing, Photoshop, Online entertainment organizations in Analytics, Illustrator, Touch Apps, Acrobat, Mobile Apps, the Middle East, operating across Social Marketing, Web Marketing, Social Measurement the broadcast, publishing, and digital media sectors. Headquartered in Qatar, Al Jazeera was The company manages over 18 market-leading brands in established in November 1996 as the first two categories: brands that serve the UAE through a independent Arabic news channel in the defined public service role; and brands that target the world dedicated to providing comprehensive wider Arab world with clear commercial objectives. television news and live debate. With the creation of new channels and services, Al Jazeera established itself Abu Dhabi Media maintains partnerships with a number as an international media corporation and in March 2006 of leading companies in the international media space. was formally named the Al Jazeera Network and then Abu Dhabi Media also owns and operates subsidiaries in again in 2012 the Al Jazeera Media Network. film, outdoor broadcast, and printing. Al Jazeera Media Network now consists of the flagship Target Segments: Consumer, Publishing, Digital Media Al Jazeera Satellite (Arabic) Channel, Al Jazeera English Channel, Al Jazeera America and Al Jazeera Documentary Geographic Presence: MENA Channel among others. Its other ventures include Products/Solutions/Offerings: Media Production AlJazeera.net (the English and Arabic web sites), Al Publishing, Digital Media, TV Broadcast, Radio Broadcast, Jazeera Center for Studies, Al Jazeera Mobile, Al Jazeera Outdoor HD Broadcast, Distribution, Printing, Film New Media, and the Al Jazeera Media Training and Production Development Centre.

Target Segments: Consumers Headquartered in the U.S., Adobe Systems Geographic Presence: Global Incorporated (Adobe) offers a line of products and services used by creative Products/Solutions/Offerings: TV content, new media professionals, marketers, knowledge services workers, application developers, enterprises and consumers for creating, managing, delivering, measuring, optimizing and engaging with compelling content and experiences across multiple operating systems, devices and media.

The Arab Satellite Communications Headquartered in United States, Organization (often abbreviated as Arabsat) Brightcove provides cloud content is a leading communications satellite services, used to publish and operator in the Arab World, headquartered distribute professional digital media. in the city of Riyadh, Saudi Arabia. Arabsat was created Brightcove has more than 6,300 customers in over 60 to deliver satellite-based, public and private countries that rely on Brightcove cloud content services telecommunications services to the Arab States, in to build and operate media experiences across PCs, accordance with International Standards. smartphones, tablets and connected TVs.

Target Segments: Consumers, Business Enterprises Target Segments: Broadcasters, Content Aggregators, Geographic Presence: Middle East and parts of Africa Content Owners, Studios, Enterprises Products/Solutions/Offerings: Satellite Broadcast, Geographic Presence: Global Telecom services, Teleport services Products/Solutions/Offerings: Online video platform, Cloud content services, Cloud encoding services Headquartered in France, ATEME is Customers in MENA: Al-Jazeera, Abu-Dhabi Media a global solution provider in advanced video compression for Broadpeak designs and manufactures the broadcast and telecom industries. ATEME encoding video delivery components for solutions are deployed widely in broadcast contribution content providers and network links over satellite or fiber networks, in video distribution service providers deploying IPTV, Cable and OTT to the home, and in multi-screen delivery of live channels services. Its portfolio of solutions and technologies and VOD, also known as Over-The-Top video. The company powers the delivery of movies, television programming addresses compression applications ranging from Ultra and other content over managed networks and the High Definition TV and 3D to web and mobile streaming. Internet for viewing on any type of device. When cost effective video quality matters, the choice is ATEME. Broadpeak systems leverage the long legacy of Technicolor’s excellence in broadcast and broadband ATEME provides HEVC, MPEG-4 AVC / H.264 and content delivery from where the founders and MPEG-2 video compression solutions. technology originated.

Target Segments: Broadcast Contribution, VOD & Target Segments: IPTV, Cable and OTT providers OTT, Converged Video processing for TV, Web and Mobile Geographic Presence: Global Geographic Presence: Global Products/Solutions/Offerings: Encoding/ Decoding, CDN Products/Solutions/Offerings: Encoding, Distribution Video Head-Ends, 4:2:2 10-bit, Broadcast Contribution, As one of the leading sites for sharing VOD & OTT, Converged Video processing for TV, Web videos, Dailymotion attracts over 112 and Mobile million unique monthly visitors and 2,5 Customers in MENA: Intigral, ISOL billion videos views worldwide (source: ComScore, January 2013) offering video content from users, independent content creators and premium partners.

Offering 35 localized versions in 18 different languages, Target Segments: Consumer, Business Enterprises Dailymotion aims to offer popular content to their Geographic Presence: MENA viewers while ensuring content protection. Products/Solutions/Offerings: Mobile & Data Target Segments: Consumers Businesses Business Cloud Solutions, 4G Business Connect, Telepresence Geographic Presence: Global Products/Solutions/Offerings: Video on demand and Headquartered in UAE, Etisalat is streaming the Middle East’s largest operator in telecommunications and the GCC’s Du is a leading mobile operator in YAE with third largest corporation. With a market value of over 6.6 million subscribers and 50,000 approximately Dhs. 80 billion (USD 20 billion) and annual business customers. Du offer mobile and revenues of over Dhs. 32 billion (USD 8.7 billion) Etisalat fixed telephony, broadband connectivity a multinational, blue-chip organisation with operations in and IPTV services to individuals, homes and businesses. 15 countries across the Middle East, Africa and Asia. Du also provides carrier services for businesses and satellite up/downlink services for TV broadcasters. Target Segments: Broadcasters, Telecom, Retail, Consumer Target Segments: Consumers, Business Enterprises Geographic Presence: MENA across vertical such as telecommunication, Media, Advertising, and Technology Products/Solutions/Offerings: Mobile, Landline, Internet, Carrier & Wholesale, Business Solutions, Digital Geographic Presence: UAE Services Products/Solutions/Offerings: Mobile Broadband, TV, carrier services, IPTV Headquartered in UAE, icflix is the Middle East and North Africa’s Headquartered in KSA, Etihad (MENA) first unlimited streaming Etisalat (Mobily) was established in platform that provides Jazwood (Arabic content), 2004 by a consortium led by Bollywood and Hollywood movies, TV series, cartoons Etisalat, the UAE based telecom and documentaries, all of which can be watched on any conglomerate. The company offers a host of telecom Internet connected device. services in the region, including 3G. Mobily owns vast majority shares in the Saudi National Fiber Network Target Segments: Consumers (SNFN) composed with 12,800 KM of structured fiber Geographic Presence: Global; predominantly cable, panned into 7 fully protected rings covering 35 subscribers in Middle East, but caters to viewers worldwide. Saudi cities plus access to 60 major hub sites for telecommunications prime points of presence and Products/Solutions/Offerings: Video on demand, complimented with 20 inter-metropolis fiber loops in Streaming to Mobile Devices; Smart TV, PC/Macs major Saudi cities. Furthermore, Mobily is a lead investor in prime global submarine cable projects that are expected to be operational in the near future.

Headquartered in UAE, Intigral is an MBC’s online platforms include mbc.net, alarabiya.net, end-to-end solution provider focused Shahid.net, the first free video on demand portal in the on delivering digital media content Arab world, and Actiona.net. services to regional telecommunication operators. As a joint venture between Saudi Telecom Company (STC) Target Segments: Consumers and All Asia Networks (ASTRO), it facilitates digital Geographic Presence: Pan Arab content distribution to consumers across mobile, IPTV or web. Products/Solutions/Offerings: TV content, new media services Target Segments: Service operators for Mobile, IPTV and Internet services Headquartered in Egypt, satellite company, Nilesat, is a joint-stock Geographic Presence: Dubai & Riyadh company operating under the Free Products/Solutions/Offerings: Mobile Entertainment, Zone Law in 6th of October City, and is the name of a Internet Protocol Television (IPTV), Over-the-Top Video series of Egyptian communications satellites. It was (OTT), Web Content & Portal Management, Interactive established in 1996 to operate Egyptian satellites, Advertising, Application Storefront, Media Content, associated ground control stations and uplinking facilities. Interactive Media, Mobile TV / Video, Web TV, Content Aggregation Target Segments: Consumer, Media Companies Customers in MENA: Saudi Telecom Company Geographic Presence: MENA Products/Solutions/Offerings: Broadcasting Services, Istikana allows its viewers to watch their Booking Center, Broadband Services, Training Center favourite shows, anytime, anywhere and for free. The company focuses on high-quality content Ooyala harnesses the power of and delivery that is both legal and free. big data to help broadcasters, operators and media companies Target Segments: Consumers build more engaged audiences and monetize video with Geographic Presence: MENA personalized, interactive experiences for every screen. Products/Solutions/Offerings: Video on demand, Ooyala offers software and services combining best- streaming of-breed technologies with industry-leading video analytics to help our customers optimize and automate Middle East Broadcasting Center video programming, video streaming and video syndication. (MBC) is a free-to-air, pan-Arab, news and entertainment broadcaster. MBC Target Segments: Broadcasters, Studios, Pay TV Group provides multiple channels of operators, content aggregators, Consumer brands, information, interaction and entertainment. MBC Group Online Media and Print includes 10 television channels across genres including Geographic Presence: Global MBC1 (general family entertainment), MBC2 and MBC MAX (24-hour movies), MBC3 (children’s entertainment), Products/Solutions/Offerings:Video Analytics, Digital Al Arabiya (the 24-hour Arabic language news channel); TV, Online video platform, Broadband TV, Internet video, among others. The Group also includes two radio Live streaming, Video player, Mobile video, Video stations: MBC FM (Gulf music), and Panorama FM monetization, TV Everywhere (contemporary Arabic hit music); as well as O3 Customers in MENA: Doha Film Festival productions, a specialized documentary production unit.

OSN is a pay TV operator which Headquartered in Riyadh, KSA, distributes 140 channels across Saudi Telecom Company (STC) is genres including movies, top rated the largest telecommunications series, sports, documentaries, news, kids entertainment company by market capitalization, total revenue and and live talk shows. number of employees in the Arab State region. It offers a host of telecom services to businesses and individuals. It also offers over a 100 uncut and uninterrupted movie STC has over 160 million customers globally. premieres a month; OSN boasts the most comprehensive portfolio of exclusive rights from all the major studios Target Segments: Business enterprises across including Warner Brothers, Paramount, Fox, Disney, Sony, verticals, consumer MGM, Universal, HBO and DreamWorks and offers Geographic Presence: MENA and some international access to the world’s leading television brands including Disney channel, Sky News, Discovery Network and Nat Products/Solutions/Offerings: Broadband, phone lines Geo. and digital TV, Mobile, security, networked IT and voice services Its other services include OSN Pehla, comprising Bollywood movies and premium cricket, including Headquartered in India, Tata exclusive telecast rights of international tournaments Communications is a global such as the ICC Cricket World Cup and Indian cricket, communications and enterprise IT service through leading sports channels OSN Sports Cricket HD provider that owns and operates the and Ten Cricket. It also offers OSN Play, an OTT service, world’s most advanced subsea cable network, delivering OSN On Demand, and OSN Plus HD, a bouquet of HD first-class infrastructure, enterprise solutions and channels to the region. partnerships to carriers and businesses worldwide.

Target Segments: Consumers Target Segments: Telecom, Media & Entertainment Geographic Presence: MENA Geographic Presence: Global Products/Solutions/Offerings: Pay TV services: Digital Products/Solutions/Offerings: Network, Internet, Satellite, HD, TV-Everywhere services Managed Services, Managed Security Services, Broadband, Voice, Video, Media Management, Business Video, Qanawat is the leading mobile VAS Hosting, Unified Communications, Cloud enablement, service and digital content provider to Video-Focused CDN leading operators in the Middle East and Customers in MENA: Etisalat, Ooredoo and TE Data Africa. Tvinci offers a turn-key platform Target Segments: Telcos, Mobile Operators for OTT TV, providing both the Geographic Presence: Middle East and Africa backend platform and the frontend applications for multi-devices solution. Products/Solutions/Offerings: Mobile VAS, Managed Services, Mobile Advertising, Mobile Content Aggregation, Tvinci provides solutions for both VOD and Live content, Smartphone Applications, Mobile Portals, Arabic Content, including catch-up and nPVR, focusing on premium Islamic Content, Mobile Music Services, Ring Back Tones, content and working with all major Hollywood studios. Full Tracks, Ring Tones

The company has successfully deployed with many cus- Headquartered in United States, Verimatrix tomers around the globe, such as MediaCorp, Eutelsat, specializes in securing and enhancing Chellomedia, and Elisa. revenue for multi-network, multi-screen digital TV services around the globe. Its Video Content Target Segments: Broadcasters, Pay TV operators, Studios Authority System (VCAS™) and ViewRight® solutions Geographic Presence: Global enable cable, satellite, terrestrial, IPTV and OTT operators to cost-effectively extend their networks and Products/Solutions/Offerings: Pay OTT TV, Video enable new business models. It also offers cardless Asset Management, Cross device user-experience security solutions, through which it leverages a 3- management, Connected TV, STB and Game Consoles Dimensional Security approach to provide a harmonized middleware. rights platform for premium content delivery to a range of devices over new hybrid network combinations. twofour54, the commercial arm of the Media Zone Authority - Target Segments: Video Service Providers including Abu Dhabi, is MENA region’s Cable, Satellite, IPTV, and Mobile leading media and entertainment hubs. As part of its mission, twofour54 is driving the Geographic Presence: Global development of the creative industries in the region, Products/Solutions/Offerings: Cardless revenue supporting talent and content development initiatives, security for multi-screen digital TV, DVB, IPTV, Broadcast creativity and young entrepreneurs. & Hybrid video security, Internet TV / OTT / Mobile TV, Enhanced adaptive rate streaming security, DVB Its campus is home to over 250 local, regional and Simulcrypt, AES scrambling, user-specific watermarking international companies, including Ubisoft, Cartoon for forensic tracking, DRM/CAS Network, Sky News Arabia, CNN, Flash Entertainment, Customers in MENA: Etisalat Sport 360, Reed Exhibitions, Charisma, Tahadi and Jawaker. twofour54 powers the Abu Dhabi Film Festival, Abu Dhabi Media Summit, TROFPEST Arabia and Headquartered in San Bruno, California, Emirates Novel Award each year to drive the development YouTube is a video-sharing website, of a vibrant film and entertainment industry. owned by Google since late 2006, on which users can upload, view and share videos. The Target Segments: Broadcasters, Media companies, Pay company uses Adobe Flash Video and HTML5 technology TV service providers, Independent film makers to display a wide variety of user-generated video content, Geographic Presence: MENA including video clips, TV clips, and music videos, and Products/Solutions/Offerings: Offers a range of amateur content such as video blogging, short original services including: training across all media sectors; videos, and educational videos. business development and funding support to UAE nationals; production and post-production facilities. While a significant portion of the content on YouTube is uploaded by individuals, increasingly the company has tied up with several media corporations globally including CBS, the BBC, Vevo, Hulu, to offer their own channels and content via YouTube, as part of the YouTube partnership program.

Target Segments: Consumers, Media companies, DISCLAIMER advertising companies This White Paper prepared by Frost & Sullivan is based Geographic Presence: Global on analysis of secondary information and knowledge Products/Solutions/Offerings: Video portal, online available in the public domain. While Frost & Sullivan has video platform and advanced analytics made all the efforts to check the validity of the information presented, it is not liable for errors in secondary Headquartered in Kuwait, Zain is a information whose accuracy cannot be guaranteed by leading telecommunications operator Frost & Sullivan. Information herein should be used more across the Middle East providing as indicators and trends rather than representation of mobile voice and data services to over 46.1 million active factual information. The White Paper is intended to set customers as of December 31, 2013. With a commercial the tone of discussions at the conference in which it was presence in eight markets, Zain operates in the following presented. It contains forward-looking statements, countries: Bahrain, Iraq, Jordan, Kuwait, Saudi Arabia, particularly those concerning global economic growth, Sudan and South Sudan. In Lebanon, the company population growth, energy consumption, policy support manages 'touch' on behalf of the government. In for water supply. Forward looking statements involve Morocco, Zain has a 15.5% stake in Wana Telecom, now risks and uncertainties because they relate to events, and branded ‘INWI’, through a joint venture. depend on circumstances, that will or may occur in the future. Actual results may differ depending on a variety Target Segments: Consumer, Business Enterprises of factors, including product supply, demand and pricing; political stability; general economic conditions; legal and Geographic Presence: MENA regulatory developments; availability of new technologies; Products/Solutions/Offerings: Telecom, Mobile, natural disasters and adverse weather conditions and Broadband Wi-Fi Roaming, Devices, Mobile Data & hence should not be construed to be facts. Mobile Broadband COPYRIGHT NOTICE

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Frost & Sullivan, the Growth Partnership Company, CABSAT is the leading professional content management works in collaboration with clients to leverage visionary event in the Middle East, Africa and South Asia (MEASA). innovation that addresses the global challenges and An exciting, interactive event featuring all the major related growth opportunities that will make or break global technology and service providers for this growing today's market participants. For more than 50 years, we industry, CABSAT - now in its 20th year - continues to have been developing growth strategies for the global extend its global reach. The show is the dominant digital 1000, emerging businesses, the public sector and the media and satellite technology platform for anyone investment community. Is your organization prepared for wishing to target broadcasters, production houses, the next profound wave of industry convergence, animation houses, content owners and creators, software disruptive technologies, increasing competitive intensity, developers, systems integrators and distribution channels Mega Trends, breakthrough best practices, changing in the vast MEASA region. For more information, visit customer dynamics and emerging economies? Contact us: www.cabsat.com Start the discussion. For more information, visit www.frost.com

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Frost & Sullivan, the Growth Partnership Company, works in collaboration with clients to leverage visionary innovation that addresses the global challenges and related growth opportunities that will make orbreak today’s market participants. For more than 50 years, we have been developing growth strategies for the Global 1000, emerging businesses, the public sector and the investment community. Is your organization prepared for the next profound wave of industry convergence, disruptive technologies, increasingcompetitive intensity, Mega Trends, breakthrough best practices, changing customer dynamics and emerging economies?