MIDDLE EAST & AFRICA ISSUE November 2018

pOFC DTVE MEA18.indd 1 30/10/2018 16:25 pXX Amos Spaceceom MEA18.indd 1 24/10/2018 12:57 Digital TV Europe Middle East & Africa 2018 > Contents November 2018

Streaming to success Middle East & Africa

emerging markets of Africa and the Middle East remain domi- 2018 The nated by free-to-air TV, with satellite-delivered pay TV growing steadily. But streaming services have gained a foothold in both markets and are helping stimulate interest in local original content. Issue no 342 In Africa, OTT TV providers face the challenge of poor terrestrial fixed-line infrastructure, the high cost of mobile data and a fractured market. Never- Published By: theless, subscription video-on-demand services have gained some traction KNect365 TMT in key markets. High mobile data charges remain a barrier, however, while Maple House regional diversity could stand in the way of pan-regional players building scale, explaining why 149 Tottenham Court Road existing providers have typically focused on a few major markets. Digital TV Europe’s Middle London W1T 7AD East & Africa 2018 looks at some of the challenges and opportunities facing OTT providers in Tel: +44 (0) 20 7017 5000 the sub-Saharan Africa market. Fax: +44 (0) 20 7017 4953 In the Middle East, despite elements of a common language and culture, regional variations Website: www.digitaltveurope.com also stand in the way of providers achieving dominance. Other hurdles include piracy and the highly politicised nature of media competition – as illustrated by the way the conflict between Saudi Arabia and Qatar has spilled over into the media business.Digital TV Europe’s Middle East Editor Stuart Thomson & Africa 2018 tracks some of the key developments over the last year, including Saudi Arabia’s Tel: +44 (0) 20 7017 5314 attempts to establish itself as a regional media powerhouse and the development of multiple Email: [email protected] OTT services that are helping stimulate the local content business. l Stuart Thomson, Editor Contributing Editor Andy McDonald [email protected] Tel: +44 (0) 20 7017 5293 Contents Email: [email protected] Contributors Africa: the big picture 2 Andy Fry, Rebecca Hawkes Satellite and – following switchover – digital-terrestrial TV are likely to remain the dominant distribution technologies in Africa, framing the context for growing competition in pay TV. Commercial Director Patricia Arescy Tel: +44 (0) 20 7017 5320 Africa: competition growing in pay TV 4 Email: [email protected] Pay TV is growing and streaming is making some headway in Africa, despite challenges. Art Director Matthew Humberstone On-demand Africa 6 OTT TV providers are optimistic about the future of streaming services across the continent, Marketing Manager Abigail Dede driven by high mobile penetration. However, obstacles remain. Andy Fry reports. Printing Wyndeham Grange, West Sussex The Middle East: the big picture 12 Satellite TV remains dominant, but fixed and mobile broadband is growing in the Middle East.

Middle East: demand for content fuelling subscription services 14 To subscribe to this magazine or our daily email newsletter please visit An appetite for local content and OTT launches have boosted subscription in the Middle East. digitaltveurope.net/registerhere Fluctuating fortunes 16 The last year has seen Saudi Arabia emerge as the major force in Middle East media, while OTT TV providers are making their presence felt. Rebecca Hawkes reports.

© 2018 Informa UK Ltd Viewpoint: Reinventing the MENA content industry 24 All rights reserved OTT services are boosting investment in local original content, says Nick Grande. Reproduction without permission is prohibited

Visit us at www.digitaltveurope.com 1

p01 Ed Note MEA18v2st.indd 1 02/11/2018 18:54 Middle East & Africa 2018 > Africa and its growth prospects Digital TV Europe November 2018 Africa: the big picture

Satellite and – following switchover – digital-terrestrial TV are Key likely to remain the dominant distribution technologies in Africa, Cable DTH DTT IPTV Broad- framing the context for growing competition in pay TV. band Notes: * Q2, **Q3 2017 Source: Ovum/WBIS

Algeria Angola Botswana Cabo Verde

15000000 350000 80000 20000

300000 70000 12000000 60000 15000 250000

9000000 50000 200000 40000 10000 6000000 150000 30000 100000 20000 5000 3000000 50000 10000 12,371,450 2,700 2,394,627 82,000 322,000 14,250 94,623 14,000 18,800 81,000 3,500 0 0 0 0

Cameroon Congo Dem. Rep of Congo Egypt

250000 50000 350000 15000000

300000 200000 40000 12000000 250000

150000 30000 9000000 200000

150000 100000 20000 6000000

100000 50000 10000 3000000 50000 215,000 25,000 56,709 47,500 13,737,125 56,900 6,256,025 48,000** 15,000** 2,160** 316,500 132,750 26,912 0 0 0 0

Ethiopia Ghana Kenya Libya

150000 500000 400000 300000

350000 250000 120000 400000 300000 200000 90000 300000 250000

200000 150000 60000 200000 150000 100000 100000 30000 100000 50000 50000 23,117 145,552 132,397 428,159 212,600 144,562 384,956 99,750 294,175 2,000* 270,000* 0 0 0 0

Visit us at www.digitaltveurope.com 2

p02-03 Africa charts MEA18vID14v2st.indd 2 02/11/2018 19:07 Digital TV Europe Middle East & Africa 2018 > Africa and its growth prospects November 2018

Malawi Mauritania Mauritius Morocco

80000 15000 250000 8000000

70000 7000000 12000 200000 60000 6000000

50000 9000 150000 5000000

40000 4000000

6000 100000 30000 3000000

20000 2000000 3000 50000 10000 1000000 60,750 1,962 6,650 13,275 148,917 235,028* 6,967,680* 76,800* 1,754,665* 0 0 0 0

Mozambique Namibia Nigeria Rwanda

200000 120000 8000000 40000

7000000 35000 100000 150000 6000000 30000 80000 5000000 25000

100000 60000 4000000 20000

3000000 15000 40000 50000 2000000 10000 20000 1000000 5000 12,980 36,155 20,744 185,750 50,750 41,500 15,158 85,750 104,250 67,710 145,000 7,011,625 1,436,449 0 0 0 0

Senegal Seychelles South Africa Sudan

100000 25000 2000000 100000

80000 20000 80000 1500000

60000 15000 60000

1000000

40000 10000 40000

500000 20000 5000 20000 3,000 82,250 21,600* 418* 35,333 22,000 93,438 8,416,778* 99,508 1,782,876* 0 0 0 0

Tanzania Tunisia Uganda Zambia

1200000 2500000 250000 150000

1000000 2000000 200000 120000

800000 1500000 150000 90000

600000

1000000 100000 60000 400000

500000 50000 30000 200000 2,183,565 1,502,915 141,229* 36,442* 204,712* 0 268,931* 1,069,190* 101,761* 0 0 249,923 155,131 0

Visit us at www.digitaltveurope.com 3

p02-03 Africa charts MEA18vID14v2st.indd 3 02/11/2018 19:07 Middle East & Africa 2018 > Africa and its growth prospects Digital TV Europe November 2018

Africa: competition growing in pay TV

While reliable statistics are hard to come by in Africa, there is plenty of evidence of growth in pay TV, fuelled by competition, while streaming is making some headway, despite challenges.

remains predominantly a and 22.4% of its TV households at the end of aware Gabonese individuals intended to equip Africa free TV market, but pay TV 2017. Even so, pay TV household penetration themselves to receive digital TV. numbers are growing rapidly, fuelled over the remains low at around 25.7%, according In Senegal, where DTT deployment is more past couple of years by intensifying competition to Kagan, compared with 52.5% in South advanced, 93.3% were aware of DTT, of whom between a number of regional players. Africa, with Nigeria turning in multichannel 21% were already equipped to receive it with a Digital TV Research predicted at the start revenues of US$835 million versus South further 54.4% intending to equip themselves to of this year that pay TV subscribers in sub- Africa’s US$1.9 billion. Kagan expects Nigerian receive digital transmissions. Saharan Africa were set to increase by 74% multichannel revenues to grow to over US$2.4 Streaming remains at a relatively early stage between 2017 and 2023 to reach 40.89 million. billion over the next 10 years, but predicts that in a market where terrestrial infrastructure is Digital TV Research predicted that sub-Saharan this will still be somewhat less than the total for patchy and broadband penetration limited. pay TV revenue would increase by 41% to reach South Africa. Much has been made of the potential of mobile US$6.64 billion (e5.84 billion) by that date, According to Kagan, the bulk of Nigerian pay in a market with high and growing mobile with subscriber growth outstripping revenue TV homes – about 60% – take digital-terrestrial phone penetration, but the cost of data remains growth as competition begins to eat into prices. services, with DTH having a 34.8% share of a hurdle despite initiatives around zero-rating The research outfit calculated that pay TV the pay TV market, with the remainder taking and bundling. market leader MultiChoice had 12.48 million fixed wireless services. The Nigerian pay TV Nevertheless, subscription video-on- subscribers across all its platforms – which market is increasingly competitive, however, demand services are growing. Digital TV include DTH service DStv and DTT platform with new entrants Kwesé TV and TSTV adding Research predicts that SVOD users across GOtv – at the end of 2017, forecast to rise to to the existing line-up of players in the market. sub-Saharan Africa will number 10 million 16.66 million by 2023. As the snapshot of TV distribution by 2023, up from just 1.56 million across the Digital TV Research predicted that technology across selected African countries region at the end of last year. The research MultiChoice would be outstripped in growth by in the preceding pages from Ovum’s World outfit predicts that SVOD revenues will remain rival StarTimes, which would see its subscriber Broadband Information Service shows, satellite low, reaching only US$775 million by 2023. base rise from 6.23 million to 13.42 million is a key distribution technology, including Digital TV Research predicts that South Africa over the forecast period. for pay TV services, but digital-terrestrial TV will remain the region’s SVOD leader, followed Other key players across the region include has also emerged as a significant distribution by Nigeria, with the pair accounting for 60% Vivendi/Canal+, which had just under three mechanism. Many homes across Africa in fact of sub-Saharan SVOD customers between million subscribers in Francophone Africa at still receive signals from analogue over-the-air them by 2023. Netflix, MultiChoice-backed the end of last year, and new entrant Kwesé TV. transmissions, with digital switchover having Showmax and Nigerian ‘Nollywood’-focused In the pay TV sector, Digital TV Research been repeatedly delayed in territories including iROKO are the market leaders, accounting for estimated in its report earlier this year that South Africa, where the new government an estimated nine in 10 SVOD customers. there were about 23.49 million subscribers at recently adopted a more market-driven Numbers are an uncertain business in the the end of 2017, with 13.78 million receiving approach to kick-start the stalled switchover context of Africa however. IHS Markit, another satellite transmissions and 9.11 million tuning process. research outfit, calculated that there were just in to digital-terrestrial pay services. While switchover has progressed in 500,000 OTT TV subscribers across the region Digital TV Research predicted that Nigeria some markets, awareness of digital TV still at the end of last year, excluding subscribers to would overtake South Africa to become the varies hugely between markets. A survey pay TV operators’ multiscreen services. continent’s biggest pay TV market by 2021, of Francophone African states in July by According to IHS Markit, expectations of with Kenya, Tanzania and the Democratic Médiamétrie found that in Côte d’Ivoire only a boom in the sector driven by increasing Republic of Congo making up the rest of the just over 12% of individuals are aware of DTT, income levels should be treated with caution. top five in terms of subscriber numbers. The up from 7% last year, of whom some 80% While sub-Saharan Africa has seen a 25% rise growing importance of Nigeria was underlined intended to acquire reception equipment. This in disposable income over the last seven years, in a separate report by Kagan, S&P Global level of awareness compared unfavourably growth of low-cost digital-terrestrial TV services Market Intelligence, which calculated that the with Mali and Gabon, where 55% and 80% at the expense of more expensive incumbents Nigerian market accounted for as much as respectively were aware of DTT. Some 95% of has contributed to a decrease in spending on 29% of Africa’s overall multichannel universe Malians who were aware of DTT and 80% of premium TV overall. l

Visit us at www.digitaltveurope.com 4

p04 Africa Analysis MEA18v2st.indd 4 02/11/2018 17:42 p05 CSG DTVE MEA18.indd 1 02/11/2018 19:10 Middle East & Africa 2018 > Focus on Africa Digital TV Europe November 2018

OTT TV providers are optimistic about the future of streaming services across the continent, driven by high mobile penetration. However, a number of obstacles stand in the way of progress. Andy Fry reports. On-demand Africa

a population of over one billion for both pay TV and OTT, with consumer impact continues to be minimal despite several With and forecasts of further growth, spending on goods and services increasing by service launches and expansions in recent it’s no surprise that OTT players and analysts 20.3% between 2010-2017. But on the other, years. Factors limiting both PayTV and online regard sub-Saharan African as a region with there are a series of roadblocks to growth. video include a lack of infrastructure, relatively massive potential. However, the reality is that Putting the current size of the subscription- high access costs, volatile exchange rates, a there are several key challenges preventing the based OTT market at around one million, diversity of audiences in terms of language region from achieving the rapid uptake seen in principal research analyst Constantinos and stringent regulations in many of the key markets like China and India. Papavassilopoulos and research analyst Max territories.” To that list could be added content Recent research from IHS Markit neatly Signorelli, who cover the region between piracy, which is prevalent across the region. encapsulates the situation. On the one hand, them, say: “Online video has had a sluggish Drilling down into some of these points more says IHS, the economic indicators are good start compared to the rest of the world, and its deeply, it seems clear that the low penetration

Visit us at www.digitaltveurope.com 6

p06-08,10-11 Africa Feature MEA18v2st.indd 6 02/11/2018 17:46 Digital TV Europe Middle East & Africa 2018 > Focus on Africa November 2018

of cable and fixed line broadband across the subscription audience. Showmax launched in South Africa in 2015 region has limited OTT’s opportunity for Modi and Archer make a similar point in and rolled out internationally in 2016. While expansion. It’s for this reason that Digital TV their analysis: “Local content can account for there are no exact figures, it is reckoned to Research principal analyst Simon Murray over 90% of viewership for the mass market have around 300,000-400,000 customers in expects mobile to be “the overriding factor” segments,” they say. “While global blockbusters South Africa – a welcome boost when DStv in the take up of OTT. With fixed broadband are still critical to tap into the premium base, is shedding premium subscribers. In overall homes only expected to reach 13 million by such content alone cannot be the recipe for terms, DStv is growing, but the last financial 2022 compared to an estimated 486 million success for any player operating in Africa. As year saw it lose around 100,000 customers smartphones users, Murray says: “It is very such, pay TV operators and most OTT players from the top subscription tier. important to stress the power that mobile are including local in their portfolios.” While MultiChoice is still intent on operators have over the future of Sub-Saharan For all of the reasons above, most of the expanding Showmax’s pan-African footprint, it African OTT TV and video.” OTT sector’s attention to date has focused on has also been preoccupied with how to protect Murray forecasts that mobile will help drive three major English-speaking countries: South its domestic pay TV/SVOD business from the SVOD market to 10 million customers by Africa, Nigeria and Kenya. Each of these is an telco-operated services, such as Cell C Black 2023, with six players accounting for 90% of important market in its own right but also has and Vodacom VideoPlay, as well as the recent that total. “The mobile operators know that the potential to act as a gateway into southern, arrival of Netflix. Without focusing too much they are in a powerful position,” he says. “Not western and eastern Africa respectively (for attention on the market, Netflix has picked up only can they give OTT players access to their observations on French and Portuguese- a similar number of subscribers to Showmax subscriber pools, but they can also conduct speaking Africa see sidebar). As for the major since it launched there two years ago. With the billing, thus foregoing the need for SVOD OTT players, the picture tends to resemble Netflix recently switching from US dollars to platforms to insist on credit card payments.” what has been seen elsewhere in the world – local currency payments, it has, in effect, just Whether this figure proves accurate will namely a combination of well-established local become cheaper for South Africans and is depend on mobile data charges, says Murray. media companies – typically pay TV providers expected to receive a boost as a result. Papavassilopoulos agrees: “The high cost of – and global competitors. With this in mind, MultiChoice recently mobile data is a limitation on the widespread offered Showmax free to existing premium uptake of video content. The reason Indian DSTv subscribers. It has just brought together OTT has grown so quickly is that Reliance Showmax Showmax Africa and DStv’s on-demand came into the market and slashed data costs by platform, DStv Now, into a single unit called as much as 75%. There is no obvious equivalent Currently, for example, one of the OTT Connected Video. The executive in charge of in Sub Saharan Africa.” frontrunners is South Africa-based the new division is Niclas Ekdahl, who says the This is also the conclusion of Singapore- MultiChoice, via its three-year old SVOD rationale for the unit is to “house all our OTT based Delta Partners. In a January 2018 service Showmax. MultiChoice’s position in knowledge and experience in one place.” analysis of the market, authors Pranav Modi OTT has been built on its long-term strength Ekdahl’s assessment of the overall OTT and Eric Archer calculated that, “at current as a pay TV provider. Active for 30 years, the opportunity pretty much echoes that of the pricing levels of US$2/GB, even if one were company controls around 90% of its domestic research analysts: “It’s an exciting time to be to consume two hours of video per day in ‘low’ pay TV market through digital platform DStv in OTT in Africa,” he says. “DStv Now and quality, the monthly mobile bill could rack and is one of the few media companies to have Showmax both generate millions of play up close to $36/ month. This, in sub-US$5 gained traction across the region. At last count, events weekly, so it’s fair to say that we’re well mobile ARPU markets, will undoubtedly be it had around 6.6 million pay TV customers in underway. Having said that, it’s still relatively cost prohibitive. Telcos thus hold the key if South Africa and a further 6.9 million across early. South Africa is furthest along the OTT viewership is to gain critical mass – either the rest of the region. adoption curve, with growing interest from through significant cuts in mobile data pricing, the launch of affordable unlimited bundles, or zero-rating partnerships with OTT providers.” Likewise, both IHS and Digital TV Research identify Africa’s regional diversity as an issue when building a pan-regional OTT service. With around 40 countries in sub-Saharan Africa, Signorelli says it is difficult for players in the market to create enough volume of quality local content to satisfy them all. As in Latin America, some content travels across the region but not enough to fully satisfy a

iROKOtv’s Jenifa’s Diary (left) and Showmax Original, Tali’s Wedding Diary (right).

Visit us at www.digitaltveurope.com 7

p06-08,10-11 Africa Feature MEA18v2st.indd 7 02/11/2018 17:46 Middle East & Africa 2018 > Focus on Africa Digital TV Europe November 2018

other major markets like Nigeria and Kenya.” focus on the Middle East, Turkey and Africa. The company made its way into the African Ekdahl says it is difficult to generalise about That job went to Nuha Mohieddin Eltayen, a media scene through the acquisition of Africa as a whole “because customer needs and former CBC Egypt exec who started her new premium sports rights such as NBA, NFL content preferences vary pretty widely”. But he role in October. Given her expertise in Arabic and the World Cup. Outside sport, it formed agrees that the “data challenge” will determine TV, it’s too early to tell how much she will focus its alliance with Netflix in 2017, offering the the speed of uptake. “The majority of data on sub-Saharan Africa. service to customers via Kwesé Play. This year, connectivity across Africa is mobile-based, and Parks Associates senior director of research it unveiled a new partnership with international the cost of that mobile data is in many cases still Brett Sappington takes the view that Netflix VOD platform Iflix, called Kwesé Iflix. prohibitive. We see this improving over time, “would love to establish a foothold everywhere, Explaining the Kwesé Iflix link-up, CEO as FTTH and other solutions like fixed LTE but they have finite resources in a very large Mayur Patel says it offers a mix of international, become more prevalent, and we also see the world. They have to balance the value of the regional and local content “curated” for an telcos coming to the party with more affordable opportunity with the cost of marketing locally – African audience – including live sport from mobile data bundles. Continued movement on and that means focusing budget where they can Kwese, African-originated free-to-air channels this is the key to mass OTT adoption in Africa.” compete. That is probably why they established and content acquired by Iflix for the region. “We With regard to Netflix, he says: “DStv Now is a marketing partnership with Kwesé in 2017.” have a free tier which offers an array for content a TV Everywhere service with news, live sport, Another frontrunner in the expansions – including a live English Premier League game linear channels and VOD, and it’s not available of African OTT, Kwesé is a pan-regional at weekends. This acts as a way of introducing as a stand-alone service so it plays in a different broadcaster that is part of telco group Econet people to our VIP service, which includes the space. Showmax, as an SVOD service, is in Media, owned by Zimbabwe tycoon Strive full content offer,” he says. Worth noting is that theory a competitor but we don’t see this as a Masiyiwa and headquartered in South Africa. the VIP tier is available via a one-day, three-day, binary either/or decision for customers. In fact, our experience has been that customers happily sign up for more than one service as long as iROKO: serving the Nigerian diaspora each service gives them something unique.” Central to this uniqueness is an emphasis on While a lot of the heavy investment in Sub local content. “We’ve got a mix of local content Saharan Africa has gone into South Africa, from the likes of Mzansi Magic and kykNET one of the first companies to identify Nigeria’s and we’re building on the success of our first potential was iROKO, founded in 2010 by Showmax Original, Tali’s Wedding Diary, with entrepreneurs Jason Njoku and Bastian Gotter. more originals in the pipeline”. In addition, he Backed by several tranches of investment from adds, there is international content from the the likes of Goldman Sachs, Canal+ and Tiger likes of HBO,” says Ekdahl. Global, iROKO’s model has been built partly He also echoes Murray’s point about the around acquiring Nollywood content and complexity of taking payments from customers, partly around low-cost local TV series and film “with credit cards more the exception than production – increasingly delivered through the the norm. This is where partnering with company’s in-house studio Rok Studios (movie others who have an extensive cash payments titles in recent years include Birthmark and infrastructure in place makes sense. The telcos Desperate Housegirls, right). are examples of this, which is why we have add- While the company is pretty well-positioned to-bill arrangements with so many of them. In compared to most, Parks Associates senior South Africa we also introduced retail vouchers, director of research Brett Sappington says and in Kenya had an M-PESA payment option its model to date has primarily been based in place from launch.” around servicing the Nigerian diaspora, which IHS’s percentage breakdown) would make it is estimated at anywhere between 5-15 million. a US$10.5 million a year business. In 2016, IHS’s Constantinos Papavassilopoulos Njoku told the Financial Times that iROKO was Netflix, Iflix and Kwesé supports that observation: “Our estimates spending around US$7 million a year on content, suggest around 60% of iROKO’s subscribers which suggests it needs to see a step change in Netflix has relied primarily on international are outside Nigeria – markets like the US subscriptions to really starting getting traction. content to drive growth in South Africa, and UK – and 90% of its revenues. It charges Digital TV Research is forecasting iROKO will recent additions including Designated Survivor, international users an annual fee of US$50 have 1.5 million subs by 2023, though that will Riverdale, Lost In Space, Altered Carbon and but is only able to charge its customers around be offset by rising content costs as competitors Trevor Noah’s Afraid Of the Dark. The company US$10 a year within the country.” target Nigeria. In its favour are first-mover is yet to give any indication of its plans for To put that in perspective, Digital TV advantage, and the fact that Njoku is realistic African content, though local commentators Research estimates that iROKO currently has about the span of time it will take for OTT in this were excited by this summer’s news that it was around 308,000 subscribers – which (using massive West African market to catch fire. looking for a content acquisitions executive to

Visit us at www.digitaltveurope.com 8

p06-08,10-11 Africa Feature MEA18v2st.indd 8 02/11/2018 17:46 Drive engagement and loyalty.

As the expert in personalised video discovery, TiVo can help you deliver the engaging features and services that drive customer loyalty. Our innovations in entertainment metadata, search, recommendations and conversation provide a flexible foundation to add next-gen services and grow your business.

Join the world’s largest, most recognisable brands who turn to TiVo for the ultimate entertainment experience.

Schedule a meeting with us during Africa Video Forum at AfricaCom [email protected]

For more information: business.tivo.com

pXX TiVo MEA18.indd 1 02/11/2018 19:11 Middle East & Africa 2018 > Focus on Africa Digital TV Europe November 2018

seven-day or 30-day pass. This is a reflection of the local industry’s desire to make access to French and Portuguese-speaking Africa subscription content as flexible as possible. Although the service is available across all Sub-Saharan Africa has around 250 million there isn’t too much detail available on how that platforms – desktop, Roku etc. – Patel confirms French-speakers across 23 countries. That may is going, though it’s worth noting additionally that mobile is the major form of distribution in seem like a sizeable opportunity, although when that a Nigerian music/lifestyle channel called the region. While he acknowledges that the you consider that 77 million are in the war-torn iROKO Music was launched on Canal+’s pay TV cost of mobile data is a barrier to entry, he says Democratic Republic of Congo it’s clear that service during mid-2017. the situation is changing for the better: “Prices OTT expansion is not always the most pressing An illustration of how tough it is to make are decreasing and we are forming a growing priority. With instability in many of the region’s headway in this region as a standalone OTT number of partnerships with telcos that offer other populous French-speaking nations, the service was the 2017 closure of Afrostream. discounted video data as part of broader opportunity is actually relatively modest. Touted as the Netflix of French-speaking Africa, bundles. So while the market is nascent That said, the region’s leading pay TV player the service launched with 2,000 hours of local compared to other parts of the world, we’re Canal+ is currently doing well. With 3.5-4 million and international content and the ability to buy excited by the growth in consumption.” subscribers, it is bullish about hitting five million daily, weekly or monthly passes. Afrostream Regarding the Kwesé Iflix alliance, he says it by 2020, at a time when its domestic French founder Tonjé Bakang put the failure of the is “a complementary collaboration that allows business is suffering at the hands of platforms service down to the high cost of content and slow us to take the business to the next level. Iflix like Netflix. A key dimension for the company’s service take up. Reports suggest Afrostream has a world class technology platform and regional leadership has been investment in sports needed to reach 25,000 subscribers paying great experience in content deals. Kwesé has a rights. But it is also investing in original content. around US$6-7 a month to hit breakeven. great suite of sports rights and broad reach as An example of this is a tough contemporary As for Lusophone Africa, there are between a result of its activities across broadcasting and series (10 x 52 mins) called Invisibles (pictured), 15-30 million Portuguese-speaking people in telecoms. To succeed in this market you need set within Côte d’Ivoire’s gangland. Africa, mainly concentrated in Mozambique great content, distribution and technology.” Although there is high penetration of mobile and Angola with not all using it as their first Although Patel is based in South Africa, it is phones in the region (Canal+ expects 165 million language. The key player in the region is ZapTV, interesting to note that the Kwesé Iflix platform to be in circulation by 2020), the same data charge a pay TV platform backed by Portuguese telco/ has so far elected not to compete in that issue faced in the English-speaking market has TV operator NOS. The company has a catch up market, a decision that is probably explained limited the potential of OTT/SVOD services. That service called Restart TV and has been rolling out by the high cost of going up against Showmax, said, Canal+ did launch a mobile SVOD service in a fibre-based service, Zap Fibra, to complement Netflix and the local telcos. “Our primary focus partnership with iRoko in December 2015. As yet, satellite delivery. is West Africa, centred on English-speaking countries like Nigeria and Ghana; and East Africa, especially markets like Kenya, Tanzania and Uganda. In Southern Africa, our focus is more on Zimbabwe.” Priorities going forward, he says, include improving the user journey and more emphasis on local content. The platform has made progress in providing mobile payment alternatives to credit cards and is also investing in scripted content from within East Africa.

MTN and StarTimes

Outside Showmax, Netflix, Kwesé, Iflix and iROKO, the companies most often referred subscriber base at less than 100,000, but across the continent, making it a potential force to in relation to African OTT are Amazon, expects it to have 725,000 subs by 2023. The in the OTT/SVOD landscape, says Signorelli. telcos MTN and Wananchi, and StarTimes, a platform has ramped up the amount of content Expansion into digital music, financial services Chinese-backed outfit that delivers affordable available in South Africa to 4,000 titles, from and e-commerce are all indicators that it sees pay TV across DTH and DTT. less than 1,000 last year. data-based products as a strategic priority. As with Netflix, South Africa is the focal The analysts at IHS stress that South Linking back to Patel’s comments, this point of Amazon’s attention. The company African-based telco MTN will also have a part point was underlined by a September 2018 launched Amazon Prime Video there last year to play in the emerging OTT landscape. While alliance between Kwesé Iflix and MTN Ghana, as part of its global rollout programme. Digital the company has faced a series of setbacks in which makes the streaming service available TV Research’s Murray puts Amazon’s current Nigeria, it currently has 240 million subscribers using MTN Video Bundles. Commenting on

Visit us at www.digitaltveurope.com 10

p06-08,10-11 Africa Feature MEA18v2st.indd 10 02/11/2018 17:46 Digital TV Europe Middle East & Africa 2018 > Focus on Africa November 2018

the partnership, Noel Kojo-Ganson, acting Swaziland). It also signed deals with Discovery that battle is hard to call at this stage. chief marketing offi cer of MTN, said: “With and Fox to air several channels via TV and OTT, Brett Sappington notes that there is not the launch of the Kwesé Ifl ix app we are including a new female lifestyle channel. necessarily an urgent incentive for players like providing access to yet another avenue of On the OTT front, SVOD services Fox+ and StarTimes to commit to a standalone OTT digital entertainment. Video content is the NG+ will join 70 channels already available on service (as opposed to an integrated pay TV/ future of mobile and our partnership with the StarTimes App, which the company says is OTT model). Already positioned as a low-cost Kwesé Ifl ix will enable us to deliver some of able to reach 450 million mobile phone users pay TV provider, StarTimes’s status is perhaps the best international and local sports and via partnerships with 23 telecom operators. more in line with the skinny bundle revolution entertainment to our customers.” While it is too early to fathom StarTimes’ taking place in the US. StarTimes is potentially a major driver of intention with regard to OTT, whether as an This seems to chime with the view at Delta, OTT, having built up a subscriber base of adjunct to pay TV or a stand-alone subscription where Modi and Archer say: “Unlike markets around 20 million pay TV customers across service of some kind. Its current trajectory such as the US, where consumers are turning 30 Sub-Saharan African countries, largely suggests it is well-placed to take advantage of to on-demand service providers such as by offering a low-cost alternative to DStv. A OTT expansion, underlined by a deal in June Amazon and Netfl ix and terminating pay TV big part of StarTimes’ success has involved between StarTimes and MTN that involves the services, cord cutting is still not a real threat in dubbing Asian series (mainly Chinese) into latter offering bundles of entertainment, sports most African markets. Pay TV subscriptions English, French, Swahili and Hausa, examples and news for US$0.50 (for two hours) or US$1 continue to demonstrate robust growth which including The Beautiful Daughter-in-Law (for four hours) a day using the StarTimes app. is expected to continue for the near future.” Era, The Ordinary World and Wildfl ower (the There is a sense that both StarTimes and This analysis would seem to be supported by latter from ABS CBN in the Philippines). MTN are feeling their way into the OTT market Digital TV Research, which forecasts that the Increasingly, it has also unveiled signifi cant by trying out new content and pricing models number of pay TV subscribers in sub-Saharan content investments and alliances from on consumers. A possibility cited by Delta is Africa will increase by 74% between 2017 and outside Asia. On the sports front, for example, that one company might emerge from the pack 2023 to reach 40.89 million. While Murray it acquired exclusive live rights for UEFA with a DAZN-style sports offering, though expects revenue growth to be slower (41%), Europa League in sub-Saharan Africa until whether StarTimes, Kwese or MultiChoice (via that’s still a potential US$6.64 billion (by 2023) 2021 (excluding South Africa, Lesotho and its SuperSport operation) is best placed to win market for StarTimes to lean into. ●

Multiscreen Launch Platform ALL-IN-ONE OTT SOLUTION

Video/Audio Platform HIGH-DENSITY VIDEO HEADEND SOLUTION

HLS IRD/Receiver THE SMART VIDEO BROADCAST PLATFORM

See you at Cabsat, Dubai March 14, 2019 Hall 6, booth E6-10

www.wisi.de

p06-08,10-11 Africa Feature MEA18v2st.indd 11 02/11/2018 17:46 Middle East & Africa 2018 > The Middle East and its growth prospects Digital TV Europe November 2018 Middle East: the big picture

Satellite TV has long been the dominant Bahrain

distribution technology in the Middle 600000

East. However, fixed broadband 500000 penetration is growing in some key 400000 markets, which, along with growing mobile video consumption, is fuelling 300000 interest in OTT TV. 200000

100000 5,000 72,500 4,000 545,026 0

Iran Iraq

200000 12000000

10000000 150000

8000000

6000000 100000

4000000 50000 2000000 12,750 168,100 3,000 11,942,023 0 0

Jordan Kuwait

1200000 200000

1000000

150000 800000

600000 100000

400000

50000 200000 1,062,245* 1,700* 395,208* 181,750 148,681 0 0

Visit us at www.digitaltveurope.com 12

p12-13 ME charts MEA18vID14v2st.indd 12 02/11/2018 18:51 Digital TV Europe Middle East & Africa 2018 > The Middle East and its growth prospects November 2018

Lebanon Oman

2000000 500000

400000 1500000

300000 1000000

200000

500000 100000 52,200* 1,500,900* 3,700* 418,462*

0 62,875 6,125 408,304 0

Qatar Saudi Arabia

350000 5000000

300000 4000000 250000

200000 3000000

150000 2000000

100000

1000000 50000 52,750 74,000 326,500 4,277,875 111,000 1,849,846 0 0

Syria UAE

800000 1500000

700000

1200000 600000

500000 900000 400000

300000 600000

200000 300000 100000 395,500 610,000 285,500 482,250 1,349,664 0 0

Yemen

200000

150000 Key

100000 Cable DTH DTT IPTV Broadband

50000 Notes: * Q2 figures 28,750 8,000 170,000 0 Source: Ovum/WBIS

Visit us at www.digitaltveurope.com 13

p12-13 ME charts MEA18vID14v2st.indd 13 02/11/2018 18:51 Middle East & Africa 2018 > The Middle East and its growth prospects Digital TV Europe November 2018

Middle East: demand for content and streaming fuelling subscription services

While free-to-air satellite TV remains the dominant mode of distribution in the Middle East, and pay TV remains stymied by piracy, a growing appetite for local content combined with the launch of streaming services has given a boost to the subscription model.

TV has long been pay TV distribution is around twice that of Saudi pay TV growth in 2017 was led by Satellite the dominant TV UAE DTH pay TV operator OSN, with Du local player Al-Majd, with OSN taking second distribution technology in the Middle East, taking third place, followed by Qatar-based place and BeIN Media taking third place. Al- with a plethora of free TV channels also BeIN Media. Majd remains the market leader overall in acting as a dampener on pay TV growth. Qatar is another market where IPTV Saudi Arabia, followed by BeIN Media, with However, growing interest in premium penetration is on the up and IPTV accounts OSN in third place. BeIN’s share declined in content, including local content, and an for around three in five pay TV homes, with 2017 as a result of restrictions on the import appetite for new streaming services, has local telco Ooredoo investing in developing of set-tops related to the boycott of Qatar. given a fillip to subscription services more its Ooredoo TV platform. Qatar is also the OTT TV growth was faster than pay TV broadly, and fuelled growth. home of BeIN Media and Al Jazeera, whose growth in the Kingdom, with Starz Play Growth in SVOD has been a key story news channel was a focal point for the wrath Arabia recording a phenomenal growth across the region over the last few years. of regional leaders that contributed to the rate last year. Other services, such as OSN’s According to Digital TV Research, the breakdown in relations between Qatar and Shahid Plus, recorded more modest but Middle East and North Africa – in this its neighbours in 2017. still strong growth, as did Netflix. Pay TV definition, including Turkey – will see SVOD In Saudi Arabia, telco STC has also revenues have also increased, with the subscriptions grow from 5.22 million at the invested heavily in IPTV to challenge the growth rate accelerating last year, according end of last year to 20.8 million by 2023. supremacy of DTH among pay TV homes. to Ovum, while advertising revenues for the Pay TV has historically been stymied not STC has also launched its own premium multitude of free channels have continued to only by the availability of free TV but by offering, Jawwy TV. suffer from the absence of reliable audience exceptionally high content licensing costs While pay TV has a well established measurement data and the politically- and by piracy. Streaming also remains presence in markets including the UAE motivated nature of much free-to-view challenged to some extent by a lack of and Qatar, it has struggled in others, such broadcasting. terrestrial broadband infrastructure, as Oman, where multichannel DTH TV Finally, piracy remains a key obstacle to although consumption of content on mobile remains dominated by free-to-air channels. deeper pay TV penetration in the region, with is growing rapidly among younger age Here, BeIN Media has led the market, with hacking of satellite pay TV a key concern. groups. OSN taking second place. The battle against content theft took a new, It is important to note while the While lack of terrestrial infrastructure has highly politicised twist this year with the predominance of satellite, the prevalence hindered the advance of OTT TV services, a massive pirating of sports rights by BeoutQ, of piracy and the presence of pan-Arab number of service providers have been active a shadowy outfit that specifically targeted media are common across the region, the across the region, including Starz Play and rights held exclusively by Qatar’s BeIN Media. countries that make up the Middle East Asian SVOD provider Iflix, as well as Netflix The latter has enlisted the support of sports are highly distinct, with huge divergence and other local players such as Shahid TV. rights bodies and technology companies to in wealth, infrastructure and regulation. In Saudi Arabia, where about three in five combat what it sees as a politically motivated While the region as a whole remains homes have a fixed broadband connection attack on its business by Saudi Arabia, which dominated by satellite TV as the key and LTE mobile broadband penetration has been the driving force behind the boycott distribution technology, and by free rather is also high, Ovum estimated that SVOD of Qatar by Arab states. than pay TV, there are also pockets of high customers numbered 1.98 million at the BeIN recently launched a US$1 billion IPTV penetration, such as the UAE, where end of last year, outpacing pay TV with international investment arbitration action Etisalat is the leading player in pay TV 1.32 million. According to Ovum, pay TV against Saudi Arabia, claiming that it had distribution, and multi-play competition penetration in the Kingdom was 28% at the been unlawfully driven out of the Saudi pay exists to some extent thanks to the presence end of last year, but with the vast majority – TV market and subject to an unprecedented of rival Du. In the UAE, Etisalat’s share of over nine in 10 – taking signals from satellite. – and state-sponsored – piracy campaign. l

Visit us at www.digitaltveurope.com 14

p14 ME Analysis MEA18v2st.indd 14 02/11/2018 17:49 Our world. High Speed Instant Broadband. Your world.

SOHO | ENTERPRISE | GOVERNMENT

Join Us during AfricaCom 2018 Hall-3 Stand C67

p15 Arabsat DTVE MEA18.indd 1 02/11/2018 19:12 Middle East & Africa 2018 > Focus on the Middle East Digital TV Europe November 2018 Fluctuating Fortunes

The last year has seen Saudi Arabia emerge as the major force in Middle East media, while OTT TV providers are making their presence felt. Rebecca Hawkes reports.

Entertainment New kid on the block has always been a hot news topic, but over the past year pay-TV in the Middle East and In April, the Jawwy TV mobile app was North Africa (MENA) hit the headlines like launched across the Kingdom of Saudi never before. Piracy and politics fuelled Arabia (KSA), Bahrain and Kuwait, providing negative column inches worldwide as the subscribers with live TV and a large library region’s pay TV subscriptions were squeezed of on-demand content in Arabic, Turkish and digital video stole a march. and English. The Homebox IPTV service For good and bad, Saudi Arabia has featured followed in July, first to Saudi Arabia with as the region’s major protagonist. rollout set to follow in Kuwait and Bahrain On the positive side, developments under via STC-owned Viva. the leadership of Crown Prince Mohammad In addition to both free-to-air and bin Salman have, over the past year, seen the encrypted TV channels, series and films, And, with Saudi government backing, could Kingdom embarking on a major revamp of its the platform is home to the Saudi Football be looking to emulate Qatar’s established pay- entertainment and media sector. League (SPL), after STC acquired the media TV operator BeIN Media in promoting the To help fuel this, the Saudi government rights in a 10-year, US$1.8 billion (e1.6 nation, through the medium of broadcast, to now appears to be the majority owner of billion) deal announced in February 2018. the wider world. the Arab world’s most popular free-to-air A US$8 monthly subscription to Jawwy TV “We have a brand new extrovert-looking, broadcaster, MBC, which is set to enrich the also delivers subscription video-on-demand future-addressing media policy and local content industry through the recently service Starz Play, along with content from strategy from the Saudi state. All the media established subsidiary MBC Studios. Building Wide Khaleeji, Blu TV, and OSN. Acquired assets under its control and primarily on its existing assets O3 Productions in Dubai, Arabic content may be complemented going MBC, Saudi Telecom – together with AlSadaf in KSA and O3 Medya in Turkey, forward by Jawwy’s own productions and co- Intigral and Jawwy TV – will be aligned to Peter Smith-led MBC Studios is set to provide productions, Intigral has said. serve that new policy,” says Constantinos content tailored to Saudi, Middle Eastern and Integration with YouTube and MBC’s Papavassilopoulos, principal research global audiences. popular VOD service Shahid is also analyst, IHS Markit. “Also, MBC is opening Furthermore, state-owned telco Saudi underway, and the company is hopeful its doors to local talent and other interested Telecom (STC) now controls regional IP video of future partnerships with international third parties who can contribute to content technology provider Intigral. Together, they streaming leaders such as Netflix. creation. Maybe the new pay-TV operator are busy developing an ambitious MENA- The platform, which aims to both serve the in MENA, the one who will challenge beIN centric over-the-top (OTT) video platform local population and take Arabic content to Media’s dominance, will come from Saudi with global aspirations, called Jawwy TV. the world stage, certainly has lofty ambitions. Arabia.”

Visit us at www.digitaltveurope.com 16

p16-18,22-23 ME Feature MEA18v2st.indd 16 02/11/2018 18:10 Digital TV Europe Middle East & Africa 2018 > Focus on the Middle East November 2018

media network. Netflix made its first foray into Arabic BeIN battles the pirates In October 2018, Qatar launched a World content with Adel Karam Live from Beirut. Trade Organisation (WTO) challenge in If Saudi Arabia has been the key protagonist Geneva claiming Saudi Arabia is in breach played by Arabsat, BeoutQ and its Saudi backers this year in the region’s pay TV drama, Qatar of international treaties on the protection of in stealing our content have consequences could be viewed as its antagonist. The political intellectual property. Simultaneously, BeIN that affect the future of world sport,” said rift between the Gulf neighbours has become Media has started an international investment Tom Keavny, managing director, BeIN Media increasingly acrimonious since diplomatic and arbitration case led by law firm Sidley Austin LLP, Group. “That is why the international sports economic relations were severed in June 2017. calling for compensation from the Kingdom. community – everyone from FIFA to UEFA, Qatar’s BeIN Media has recently costed BeoutQ stands accused of repeatedly stealing Formula 1 to all the governing bodies of the fallout for its business at US$1 billion – premium sports content for which BeIN holds world tennis, to the Olympics, the NBA and in terms of lost subscription revenue from the highly prized – and highly priced – regional the NFL, together with a host of other global the large markets it has been banned from rights. Indeed, BeIN is not the only party crying broadcasters – have all taken a stand and operating in – namely Saudi Arabia, Egypt foul; the major sporting bodies with which it publicly condemned this Saudi-based piracy; and, to a lesser extent, Bahrain – and also from partners have all echoed their condemnation and many have now initiated or are initiating the damage caused by the sophisticated pirate of BeoutQ. legal challenges.” outfit BeoutQ – which it claims hails from the “Piracy has been a mission-critical issue over In terms of evidence, BeIN’s Keavny Kingdom. Repeated requests for its alleged the past year, posing a major threat not only for alleges: “The beoutq.se website is geo-blocked Saudi backers to shut down BeoutQ have failed BeIN Media Group but for the entire world of to Saudi Arabia and satellite subscriptions to bear fruit for the Qatar government-backed sports and entertainment. The political games must be validated from a Saudi IP address;

Visit us at www.digitaltveurope.com 17

p16-18,22-23 ME Feature MEA18v2st.indd 17 02/11/2018 18:11 Middle East & Africa 2018 > Focus on the Middle East Digital TV Europe November 2018

BeoutQ’s piracy of UEFA Champions League football has incensed BeIN Media.

is that international players will dominate and regional players will be brushed aside.”

Winners and losers

Between 2010 and 2016, IHS Markit claims pay TV subscriptions in the region grew at a CAGR of 17%, while revenues increased by a CAGR of 26%. However, the growth in MENA pay TV subscriptions stalled in 2017 due to the block on BeIN Media in Saudi Arabia, Egypt, Bahrain and, albeit temporarily, in the UAE. BeIN lost around 40% of its subscription its subscriptions are priced in Saudi riyals Since 2010, the region’s two largest base in 2017, although it remains the largest only; and its channels carry advertising for players, BeIN Media and Dubai-based OSN, operator in terms of market share, while numerous Saudi brands. Indeed, even the have accounted for over 60% of pay TV OSN experienced moderate growth in 2017. name ‘BeoutQ’ is manifestly intended to mean subscriptions in MENA, and over 50% of However, UAE-based telco Etisalat, along ‘be out Qatar’ – a reference to the Saudi-led revenues, according to IHS Markit. However, with Saudi’s STC, made substantial progress blockade against Qatar.” pay TV penetration stood at just 12% of the with its IPTV offer, said IHS. In total, IPTV Digital security and media solutions region’s population, as of the end of 2016 subscriptions grew seven fold between 2010 heavyweights Cisco, Nagra and Overon have (before BeIN was banned from Saudi Arabia, and 2016. also confirmed that pirate channels have been Egypt and Bahrain). “As a result, 25% of MENA pay TV distributed by Riyadh-based regional satellite In spite of the low penetration rate, premium households now subscribe to an IPTV service, operator Arabsat “in technical detail,” Keavny content is more expensive to license in MENA even though the platform is only present in a adds. than in more mature pay TV markets. “Prices handful of [predominantly Gulf] countries. In For their part, the Saudi government and dwarf those in the UK, which has about three 2017, IPTV’s market share crossed over 30% Arabsat – in which the former holds a 35% stake times the pay TV subscriptions of the entire as a result of the blockade,” says Constantinos – have consistently denied any involvement Middle East and North Africa,” says OSN CEO Papavassilopoulos, principal research analyst, with either BeoutQ or its transmission. The Stewart. “Sport is the most glaring example of IHS Markit. Kingdom said it is taking action to combat regional overbidding but entertainment is also In the next few years “OSN will remain content theft and is committed to protecting more expensive to acquire in MENA. It is not resilient, boosted by its new pricing and intellectual property. sustainable as a business model to rack up packaging policy, while partnerships and huge losses on the acquisition of content.” value-added services are paving the way for the With the region’s less stable economic and growth of telcos’ TV businesses,” he says. Stumbling blocks political outlook, the warning would seem OSN’s decision in early 2017 to reduce its to hold merit. At the end of the 2017, pay TV introductory offer and introduce pick ‘n’ mix Piracy clearly remains rife across the Arab subscriptions across MENA’s Arab nations packages seems to have paid off. “To attract world, where the theft of intellectual property totaled 4.23 million, down 21% from 5.35 the mass market we had to have the ability undermines multi billion dollar-broadcasting million a year earlier, according to IHS Markit. to fashion a package for all pockets, to appeal contracts. Indeed, says Martin Stewart, CEO “Regulation needs to be taken seriously across a region notable for disparities of of BeIN’s major rival OSN, content piracy in MENA – for both legal overbidding income,” explains OSN’s Stewart. “We have remains the biggest competitor to the entire and content theft – as both are stifling the seen a lot of traction since flexible pricing pay TV sector in MENA. market,” says OSN’s Stewart. “The absence was introduced, although times are difficult In a region where a vast number of popular of competition law needs to be addressed to economically and the political situation has free-to-air satellite channels feed more than encourage operators to stop paying vast sums been particularly tense in the past 12 months.” 80% of homes, the cost of a few riyals or for content and operating at a loss because As a result of the new pricing regime, dirhams to access pirated premium content they have wealthy benefactors. And respecting OSN’s revenues fell by around 12% in 2017 is undeniably attractive to many. This factor, intellectual property, which the UAE does well, from 2016. However, its subscriber base coupled with an overinflated cost of acquiring is not rigorously enforced region-wide. Its grew by 4%. Looking forward to 2022, OSN’s premium content, makes it tough for the enforcement is crucial to developing the media standalone digital service Wavo is also set to region’s pay TV operators to operate within a industry. If these factors are not addressed, gain a 10% share of the regional OTT market, profitable margin. the danger for the local industry in the future says IHS Markit.

Visit us at www.digitaltveurope.com 18

p16-18,22-23 ME Feature MEA18v2st.indd 18 02/11/2018 18:11 Sponsored content

Ivan Verbesselt, Senior Vice President Marketing, NAGRA

Pay-TV was never truly digital – until now

he pay-TV industry has been talking about digital TV for well over two decades now, to the point where “digital TV” and “TV” have essentially become synonymous. But are they? How “digital” is digital TV really? TThat depends on which perspective you take and which aspect of digitisation you want to focus on. If we look back over the history of pay- TV, we can begin to establish a sense of where we are today in terms of digitisation. In the 90s, pay-TV was born into an analogue world – from production and aggregation to delivery and consumption. Just as crucially, the business model was analogue, too. But at the turn of the century, the pay-TV industry saw its steepest growth curves while embarking on a massive digitisation wave. However, that wave mainly referred to the technology components along the end- to-end production and delivery chain. OpenTV Signature Edition, NAGRA’s pre-integrated and ready-to-launch Nonetheless, this digital transmission enabled us to deliver video-over- OTT solution now also features an Android TV Operator Tier bits and increasing bandwidth on all media. It also improved encoding efficiency and brought us significantly higher picture quality. But on the business model front, the transformation was, in hindsight, not that In these pivotal times, it’s important to reflect on what really defines the profound. success of an industry. Barring a (very) modest start of VOD and semi-interactive services like During the first digitisation wave, the credo was “meaningful PPV, the business model hardly evolved from the original incarnation of aggregation”. This is what made consumers buy and keep pay-TV pay-TV. packages. And the truth is, the same credo applies today. But today, that’s all set to change. We’re now about to enter a new The winners will be those who respond in a way that delivers valuable era altogether; one characterised by another profound technological propositions into the evolving consumer behaviour landscape and evolution. matches growing expectations. This will largely be defined by the increasing virtualisation of the It does, however, also require a fundamental rethink of the user delivery and service creation environment, alongside the rapidly growing experience, allowing for smarter content discovery and smarter catalogue importance of data-driven principles to define and evolve those services, management. This must in turn transform an increasingly fragmented solutions and propositions. But the crucial point to note here is that this content landscape into a gratifying experience. It must also address all time the business model is also transforming. generations and user types, not just millennials. The reason for this is that two key trends mutually reinforce each other: Just as importantly, the service concept cannot be static. It will have to the fact that OTT has permeated the core of pay-TV (to a point OTT has fully embrace continuous solution renewal that matches the exponential become a misnomer altogether) and an evolving set of behaviours and speed of the internet, evolving in a data-driven way and tapping into expectations on the consumer side; most notably the convenience of short feedback loops from evolving consumer behaviour. This, ultimately, service discovery and consumption. will be what grows the consumer base while increasing both consumer Essentially, this may well be when pay-TV goes truly digital. satisfaction and content ROI. So what does this mean for the industry? Well, we may see the It is also what NAGRA has set out to do with our latest set of “smartly pendulum swing away from the increasingly segmented and personalised digital” solutions that embrace cloudification and leverage data-driven landscape where empowered consumers create their own bundles. After principles, including cloud-based content security, OpenTV Signature all, if this continues at the current rate, we’ll soon enter a bonanza of OTT Edition and NAGRA Insight analytics to name a few. Service providers can add-on services that is just too daunting and confusing for the consumer. use them to define and evolve their consumer propositions and optimize This in turn will almost certainly lead to a new wave of re-aggregation; their next phase of growth in a vastly different competitive landscape. and smart service providers must position themselves in that role before Pay-TV is on the verge of its most significant digitisation wave yet – others do. operators have to act now if they want to catch it, and not sink beneath it.

Visit us at www.digitaltveurope.com 19

pXX Nagra Opinion DTVE Oct18.indd 7 02/11/2018 19:15 WHAT’S NEW FOR 2019?

VIDEO EXCHANGE AWARDS QUIZ THE SPEAKER Celebrating the changemakers across the industry. All speakers remain for private Q & A after their Those people, products and services that drive sessions to make sure everyone leaves satisfi ed. value for both business and consumer.

(co-located with Broadband Asia) 28-29 October 2019 INTRODUCING LEADERSIN VIDEO INDUSTRY ROUNDTABLES 7-8 May 2019 Dubai By Invitation only, the LeadersIn Video Working Hosted by an expert moderator, discussion groups Bangkok Group contain some of the most forward thinking bring together a cross section of the broadcast business leaders talking off the record under and media industry to share ideas, expertise and Chatham house rules to navigate future growth. challenges around specifi c topics.

(co-located with AfricaCom) 26-27 November 2019 MEET THE BUYER 12-14 November 2019 London Closed door, invitation only sessions for buyers to Cape Town explain their technology and service requirements and upcoming procurement plans.

NOTHING BUT THE WHICH COMPANIES ATTEND? BUSINESS OF VIDEO EUROPE ASIA AFRICA MENA Through a collection of events, reports, media publications the Video Exchange Series provides a 365 community platform to enable businesses to grow in a disrupted media landscape.

WE ANSWER BUSINESS CRITICAL CHALLENGES FACED BY BROADCAST LEADERS TODAY

SEAMLESSLY EXTENDING BRANDS FROM LINEAR WINNING THE BATTLE ACROSS OTT PLATFORMS FOR EYEBALLS

WHAT WILL THE IMPACT OF AI AND BLOCKCHAIN BE IN MEDIA? SPONSORS AND EXHIBITORS ACROSS THE SERIES

BUSINESS POSITIONING AT THE INTERSECTION OF LEVERAGING DATA TO TELCO, STREAMING AND MAKE A REAL DIFFERENCE MEDIA IN CONSUMERS LIVES

tmt.knect365.com/video-exchange/ tmt.knect365.com/video-exchange/

pXX-XX Video Exchange Series MEA18.indd 2 02/11/2018 19:17 WHAT’S NEW FOR 2019?

VIDEO EXCHANGE AWARDS QUIZ THE SPEAKER Celebrating the changemakers across the industry. All speakers remain for private Q & A after their Those people, products and services that drive sessions to make sure everyone leaves satisfi ed. value for both business and consumer.

(co-located with Broadband Asia) 28-29 October 2019 INTRODUCING LEADERSIN VIDEO INDUSTRY ROUNDTABLES 7-8 May 2019 Dubai By Invitation only, the LeadersIn Video Working Hosted by an expert moderator, discussion groups Bangkok Group contain some of the most forward thinking bring together a cross section of the broadcast business leaders talking off the record under and media industry to share ideas, expertise and Chatham house rules to navigate future growth. challenges around specifi c topics.

(co-located with AfricaCom) 26-27 November 2019 MEET THE BUYER 12-14 November 2019 London Closed door, invitation only sessions for buyers to Cape Town explain their technology and service requirements and upcoming procurement plans.

NOTHING BUT THE WHICH COMPANIES ATTEND? BUSINESS OF VIDEO EUROPE ASIA AFRICA MENA Through a collection of events, reports, media publications the Video Exchange Series provides a 365 community platform to enable businesses to grow in a disrupted media landscape.

WE ANSWER BUSINESS CRITICAL CHALLENGES FACED BY BROADCAST LEADERS TODAY

SEAMLESSLY EXTENDING BRANDS FROM LINEAR WINNING THE BATTLE ACROSS OTT PLATFORMS FOR EYEBALLS

WHAT WILL THE IMPACT OF AI AND BLOCKCHAIN BE IN MEDIA? SPONSORS AND EXHIBITORS ACROSS THE SERIES

BUSINESS POSITIONING AT THE INTERSECTION OF LEVERAGING DATA TO TELCO, STREAMING AND MAKE A REAL DIFFERENCE MEDIA IN CONSUMERS LIVES

tmt.knect365.com/video-exchange/ tmt.knect365.com/video-exchange/

pXX-XX Video Exchange Series MEA18.indd 3 02/11/2018 19:17 Middle East & Africa 2018 > Focus on the Middle East Digital TV Europe November 2018

Meanwhile, OSN’s rival BeIN is forecast by the 13 Arabic-speaking Middle East markets it with 11.53%, according to IHS Markit. Next Digital TV Research to increase its subscription studied, pay TV revenues will only grow by 24% came Asia’s Iflix, Selevision’s Seevii, OSN’s base from 1.12 million at the end of 2017 to 1.87 from US$1,177 million in 2017 to US$1,461 Wavo, BeIN Connect, PCCW-backed Viu and million in 2023 – due mainly to the popularity million in 2023, despite pay TV subscriptions finally Amazon Prime Video. of its sports assets. rising by 47% to 5.84 million. “If subscriptions “Being ahead of Netflix, Shahid and Wavo BeIN now claims to own the single are growing faster than revenues, then ARPU has been a highlight for us this year. We are largest portfolio of sports rights of any global must be falling,” he says. continuing to grow in MENA and investing in broadcaster. This year it renegotiated MENA- micro improvements to the service, which is wide licensing deals until 2022 with both the taking us to the point where we’ll be profitable Premier League and UEFA for Champions Digital traction next year,” says Starz Play’s CEO Maaz Sheikh. and Europa League football. Next year will Having teamed up with local telcos to offer bring live coverage of the African Cup of While the traditional pay- V sector has faced the service with mobile payment options has Nations in Cameroon. obstacles, OTT video is taking hold in the helped drive Starz Play’s subscriptions in BeIN’s growing cricket offer has also been region – thanks in large part to its youthful and markets with very low credit card penetration. given a boost having snatched Indian Premier technically savvy demographic. In addition to carrier billing, acquisition costs, League (IPL) coverage away from previous OTT subscriptions passed one million for marketing and branding are all helped through incumbent OSN. the first time in 2017, up 48% to 1.38 million these tie-ups, says Sheikh. “We are still OSN’s Stewart admits that the high compared with 2016. Revenues exceeded learning; we have yet to learn the full value of octane T20 IPL “is a great product and we US$100 million, also for the first time – up such partnerships. With each relationship we are of course disappointed to lose it. But I’m 44% over the same period, according to have gone deeper to improve our service and to running a business and have to deliver a IHS Markit. MENA’s OTT subscriptions are monetise the operation,” he says profit to shareholders, so I couldn’t justify the forecast to reach five million in 2022, a CAGR Improving the platform’s content expenditure necessary to keep it. However, we of 34.4% between 2016 and 2022. curation, personalisation and customer still have a broad range of programming on our Digital TV Research’s Murray is even more recommendation features have been a focus cricket channel, and have just broadcast the optimistic about the sector, suggesting the Arab for Starz Play, which also launched in Pakistan Asia Cup – played mainly in the UAE – which world will have 11 million subscribers to paid this year. was a fantastic event.” VOD platforms come 2023. Saudi Arabia will In MENA Starz Play has expanded its Stewart’s prudent approach differs add nearly three million SVOD users between content offering, with more from Disney, significantly from that of BeIN, where an the end of 2017 and 2023, taking its total to 3.6 Warner Bros and Fox. It has also recently begun estimated US$1 billion annual bill for sports million, he believes. streaming the final season of The Big Bang content rights exceeds subscriptions revenues, What both analysts agree on is the current Theory ‘day and date’ with the US. “The more IHS Markit’s Papavassilopoulos calculates. SVOD market leader, in terms of subscriber Netflix develops their own originals, made for The revenue lost from the key sports-loving numbers. Lionsgate-backed Starz Play, which western audiences, the more opportunity it markets of Saudi Arabia and Egypt will have launched across MENA in 2015, commanded gives us to license established shows like this, particularly hurt, he says. 26.77% of the market in 2017. MBC’s Shahid and franchises, such as Flash, Grey’s Anatomy Looking forward, Simon Murray, principal Plus SVOD service followed with 25.33%, then and Friends,” says Sheikh. analyst at Digital TV Research, forecasts that in Netflix with 16.54%, and Dubai-based Icflix Starz Play’s Hollywood content is also now complementing the Arabic and Turkish content selection on Jawwy TV, with a single sign on to access it all. “Although we make less money per subscriber combining with Jawwy than going direct to consumer, we reach more customers, and also keep full visibility – we can see what customers watch on the platform,” Sheikh says. Partnership with telcos is also key to expansion for Kuala Lumpur-based OTT service Iflix, which entered the Middle East market in 2017. This year it has moved its regional headquarters to Cairo, because, says John Saad, CEO of Iflix MENA, “Egypt is the hub of content creation in the Middle East and North Africa, and is one of our key markets,

OSN’s latest Turkish show Hekayatna debuts in November.

Visit us at www.digitaltveurope.com 22

p16-18,22-23 ME Feature MEA18v2st.indd 22 02/11/2018 18:11 Digital TV Europe Middle East & Africa 2018 > Focus on the Middle East November 2018

along with Saudi Arabia and Morocco”. the two. “We hope to continue to develop our and Money Heist from Spain are just some This year it launched version 3.0 of the partnership with Netflix, and would love to of the examples that travelled well across the Iflix app, and with it a two-tier access model, make something with them as they roll out world, and we expect the same for Jinn,” says one focusing on SVOD and another free, their Arabic language programming,” he says. Lafargue. advertising supported service. As well as Certainly OSN is well positioned on local The US video streaming giant also looks Hollywood, Korean and Bollywood content content, offering a portfolio of 15 Arabic forward “to announcing new projects from on-demand, Iflix is also now offering live free- language channels, which delivered 29 new the region in the near future,” he says. “Netflix to-air TV, with Afro Urban media group Trace Arabic shows for Ramadan 2018. The Ya recognises that the MENA region not only being the first to climb onboard with its Urban Hala suite of channels accounts over half the has a rich heritage in great storytelling and and Sports Stars channels. operator’s viewing, says Stewart, although entertainment but a vibrant community of Already teamed with Zain, this year Iflix takes just 15% of its budget. content creators and storytellers. The diversity announced partnerships with Vodafone Egypt “While OSN has a very good Arabic content of the region and its entertainment tastes also and Moroccan mobile operator Inwi, which business I don’t think the region’s potential for gives us so much to work with.” are now both offering the VOD service at preferable rates. Available from US$2 to $4 per month, “We are continuing to grow in MENA and depending on the market, Iflix has also initiated a daily pricing offer in Egypt to help boost its investing in micro improvements to the appeal. While daily subscriptions are only service, which is taking us to the point where currently available in Egypt, it is a model iflix is looking to expand in other MENA markets. we’ll be profitable next year.” Maaz Sheikh, Starz Play

(Local) content is king storytelling and content production has been Certainly Netflix’s lack of local content anywhere near realised. Creative talent is strong and distribution partnerships – along with Like the other VOD providers in the region, Iflix in MENA and it is incredibly important that it an absence of support for local currencies or is on a learning journey, says Saad. There have is given a voice,” says Stewart. “The MENA differentiated pricing – initially held back its been noticeable benefits in introducing mobile audience, like anywhere else in the world, want regional development. Now that looks set to wallet payment options and providing locally to see content in their own language, with change. By 2022 IHS Markit forecasts Netflix relevant content. To which end it is currently in local actors telling stories in scenarios they can will account for 23% of total OTT subscriptions talks with writers and talent in its three target recognise. Of course it also wants to see Tom in MENA. markets, along with producers of both classical Cruise in the latest Mission Impossible. We can BeIN is also exploring local and localised and short form content production. provide both.” In addition, OSN now offers a content opportunities. A new tie-up with “When we offer Asian and western content free, curated content publishing platform for DreamWorks Animation provides access to its in MENA we always offer subtitles. But there the short form productions of local creatives. content library in a choice of languages. BeIN is always a higher attraction to local content Called ASLI, it is hosted on Wavo. has also announced it will work with BBC because of the familiar language and cultural Netflix, meanwhile, is set to add its six-part Studios to co-develop, produce and distribute references. To attract the masses, and crack the Arabic teen soap Jinn to its growing catalogue content in Qatar, the Middle East and Turkey, market, we need local content,” says Saad. of originals. Produced by Lebanon’s Kabreet where it owns pay TV platform Digiturk. Netflix, meanwhile, has this year announced Productions, the drama is directed by Mir- “We are confident that our viewers will reap both the production of its first Arabic Jean Bou Chaaya. Currently in production, the benefits of having content that is produced original series, Jinn, and its first distribution Jinn will bring Middle Eastern folklore to the specifically for the regions they are in and that partnerships in the Middle East – most recently modern world when it launches in 2019, strives to cater to their preferences,” says beIN partnering UAE telcos du and Virgin Mobile, says Yann Lafargue, head of corporate and Media Group’s MD Tom Keavny. and in February a tie-up with OSN. tech communications for Netflix EMEA. The Given the political outlook, it is difficult “Netflix is a great partner and a great content series follows Netflix’s first foray into Arabic to predict the outlook for MENA’s pay TV producer. Add them to the other fantastic content with the Creative Arab Talent-produced sector with any certainty in coming months. studios we have and we have unbeatable comedy special Adel Karam: Live from Beirut, However, tackling piracy, expanding local entertainment,” says Stewart at OSN, which which launched worldwide in March 2018. content production and the rollout of Jawwy has also renewed deals with US studios like “Investing in local content is key and what TV could all hold a key to unlocking future Disney and Viacom. is even more exciting for us is being able to growth for the industry. The tie-up sees Netflix integrated on the create a global audience for local language Looking at the blossoming OTT market, OSN set-top to allow anytime, anywhere access shows through our 130 million memberships, analysts agree that while there could be across multiple screens, paid for through a spanning over 190 countries. Looking at our consolidation in Arabic SVOD platforms, consolidated OSN bill. However, Stewart would slate of international originals, shows such as Netflix’s increased regional focus is now like to see an even deeper relationship between The Rain from Denmark, Dark from Germany looking set to shape the landscape. l

Visit us at www.digitaltveurope.com 23

p16-18,22-23 ME Feature MEA18v2st.indd 23 02/11/2018 18:11 Viewpoint > Nick Grande, CEO, mena.tv Content Hub Digital TV Europe November 2018

Reinventing the MENA content industry

Arabic audiences are waking up to internet-delivered streaming services, helping fuel investment in local original content, says Nick Grande, CEO of mena.tv Content Hub.

direct carrier billing is their most effective Domestic content markets payment collection option. It’s no surprise then that a trend towards operator-backed platforms Universal fibre connectivity in the UAE and is also emerging. Services such as Jawwy TV Qatar allows consumers to enjoy the benefits (owned by Saudi Telecom) combine various of IPTV and OTT and expect the convenience linear FTA, pay TV and VOD services. Jawwy of catch-up and PVR services, proper EPG has the advantage that its parent controls the information and artwork, on demand content largest domestic telecoms market in the region, libraries, search tools and recommendation providing a lucrative base from which to grow. engines. However, most of the 350-plus million viewers in the remaining 20 MENA countries don’t have high-speed broadband, relying Arabic originals content industry in the Middle instead on a rudimentary “zapper box” TV The East and North Africa is in the viewing experience with no TV guide and no The global and regional wave of investment into grip of seismic change. After two decades of channel numbering or groupings. Every country OTT platforms is also creating a renaissance in dominance, pan-regional free-to-air satellite has a different dialect and culture, so most of the Arabic content production. TV still leads viewership but has become 980-plus FTA satellite channels are irrelevant Until recently, Arab producers relied on commercially unviable. Consumers are to viewers, but they have no effective means of limited budgets, forcing them to produce waking up to global and regional internet- avoiding them. shows at a low cost per hour compared with delivered services and the promise of a new Over the coming years, increased availability international standards. With the explosion of wave of premium Arabic content. and affordability of broadband (especially 5G) OTT in MENA, high-end producers now have For several years, the MENA TV industry has and the ubiquity of smart screens (eliminating access to a new and well-funded customer base been held back commercially by issues such set-top boxes) will make internet-delivered beyond traditional TV channels and networks. as market fragmentation, toothless regulation linear and VOD services an easy and affordable There was a further boost to Arabic and a lack of transparency. Most regional alternative to satellite TV. Consumers will production in February 2018 when Saudi broadcasters now depend on investment gain access to content offerings tailored to Arabia announced a ban on all Turkish content. from governments or other industry sectors to their domestic culture and interests. Internet Turkish drama represented 35% of all Saudi sustain their operation and growth. delivery will also allow localised, measurable general entertainment in 2017 (according to Pan-regional free-to-air (FTA) satellite TV advertising to develop for the first time, SMMC people meters) and the ban created an TV remains the mainstay of viewership, and will create opportunities for rights-holders urgent need for new high-quality drama. MBC, reaching 95% of homes and viewing time to monetise programming on a country-by- the region’s largest broadcaster, responded with of four-plus hours per day, but despite major country basis. the launch of MBC Studios in September 2018. efforts in the UAE and Saudi Arabia, the Even the formats of Arabic productions are regional TV advertising sector lacks any changing. For years, producers focused on credible TV audience measurement system. OTT hits the mainstream 30-episode stripped programming created to This vulnerability has been capitalised on by serve the spike in viewership and massive TV Google/YouTube and Facebook, and MENA SVOD services are already gaining traction in advertising budgets during the holy month of TV ad revenues have reportedly declined 25% the region. Netflix and Amazon signed their first Ramadan. The change in market dynamics has year-on-year over the past three years. telecoms operator partnerships in the region allowed producers to look beyond Ramadan Despite 20 years of investment, linear pay this year. They join emerging market OTT formats and start producing drama targeting TV in the region still languishes in single digit platforms such as Starz Play, Iflix and VuClip both regional and international audiences, with penetration, compared with global averages and broadcaster-owned services such as Shahid fewer episodes and bigger budgets per episode. above 30%. Rampant piracy, high content Plus (MBC), Wavo (OSN) and Weyyak (Zee). Even a small percentage of the US$20 billion- costs and the lack of consumer adoption of Regional OTT services rely heavily on plus invested by major global SVOD platforms credit cards have constrained it to a niche telecoms networks for their growth, because will dramatically improve the quality and range offering. in the absence of credit cards and direct debit, of original Arabic productions. l

Visit us at www.digitaltveurope.com 24

p24 Grande Viewpoint DTVE MEA18v2st.indd 22 02/11/2018 18:57 Driving the content economy

8-11 April 2019 Cannes, France

6-7 April 2019 - Cannes, France

® 5-7 June 2019 Hangzhou, China

14-16 November 2018 Cancun, Mexico

14-17 October 2019 Cannes, France

12-13 October 2019 Cannes, France

Interested in our events? Contact us for more information

VISITORS: [email protected] EXHIBITORS: [email protected] BUYERS: [email protected]

MIPTV®, MIPDoc®, MIPFormats®, MIP®China, MIPCOM®, MIPJunior® and MIP®Cancun are registered trademarks of Reed MIDEM - All rights reserved

portefeuille_mip_210x297pXX MIPCOM DTVE Oct18.indd mm DTVE.indd 1 1 21/09/2018 10:4516:09 21663 OTTtv WS Advert.qxp_Layout 1 03/10/2018 17:14 Page 1

SAVE 20% WITH THE 14th Annual CODE DIGITAL20

Co-Located with Content Delivery 27-28 November World NovemberInmarsat, 27-28, London, 2018 UK Inmarsat, London HAS THE MARKET GONE OTT? ARE YOU AND YOUR TEAM CAPABLE OF INNOVATING FAST ENOUGH TO FACE THE DISRUPTORS HEAD ON?

2018 SPEAKERS INCLUDE:

Dauvignas Heather Killen Kelly McAree Will Ennett Liberis CEO Head of Head of Pay TV Head of TV Horse & Proposition TalkTalk Digital Country TV Now TV Viaplay

Noriko Matsuoka Lead Strategist – Emmi Emerging Vianionpaa Henrik Eklund Nick Walters Experiences – Director of CEO CEO Product Pay TV Newstag Hopster Technology C More Strategy & Architecture, BBC WHAT ARE THE MAJOR INDUSTRY ISSUES BEING ADDRESSED?

Market trends: A question of Personalisation: Choosing the Partnerships: Organisational Is the consumer sport: What can When do the right business How do you preparedness: too spoilt for we take away efforts to models: Are you juggle your How adaptable choice? from the personalise currently missing independent is your team to disruptors? outweigh the a trick? ventures with change? return? your joint?

https://tmt.knect365.com/otttv-world-summit/ #OTTTV

an Informa business

pXX OTTtv WS MEA18.indd 1 24/10/2018 11:21