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beIN dispute hits MENA pay TV subs

Pay TV revenues for 20 MENA countries fell by 11% between 2016 and 2018 to just under $3 billion. Given the hangover from the beIN ban and falling ARPUs, revenues in 2024 ($3.28 billion) will still be lower than in 2016 ($3.36 billion).

Pay TV revenues by country in 2024 ($m)

Turkey, 910 Others, 718

Egypt, 161

UAE, 398 Israel, 675

S Arabia, 417

Source: Digital TV Research

Five countries will contribute 78% of the region’s pay TV revenues in 2024. Turkey and Israel together will supply nearly half the pay TV revenues in 2024.

Concentrating just on the 13 -speaking countries, pay TV revenues fell by 16% from $1,254 million in 2016 to $1,059 million in 2018. The total will recover to reach $1,432 million by 2024. Pay TV subscriptions fell by 9.5% between 2016 and 2018 to 3.40 million, but will progress to 5.23 million by 2024.

Simon Murray, Principal Analyst at Digital TV Research, said: “Pay TV in the MENA region has been hit by a Saudi-led ban on the sale of -backed beIN decoders and subscriptions since mid-2017.”

He continued: “The ban has been compounded by BeoutQ, an illegal platform that retransmits some of beIN’s content especially its exclusive sports rights. The region is no stranger to piracy, but the sophistication of the BeoutQ operation is beyond anything seen before. beIN is fiercely protesting BeoutQ, with the support of major content owners, especially sports federations. We believe that the situation will be resolved in 2019; given the international pressure to drop the ban and to close BeoutQ.” beIN lost 464,000 subscribers – or 47% of its subs base - in the two years to end- 2018 to take its total down to 525,000. The 2016 total is unlikely to be bettered until 2021. beIN is forecast have 1.40 million subscribers by 2024.

Pay TV turmoil is not confined to the Arab world. OTT platforms provide considerable competition to the traditional pay TV sector in the region’s largest markets: Israel and Turkey.

Israel will lose 10% of its pay TV subs between 2014 to 2024. Israeli pay TV revenues will fall from more than $1 billion in 2015 to $675 million in 2024 – down by a third.

The Turkish pay TV market has been shaken up by greater competition. Turkish pay TV revenues will reach $910 million in 2024; lower than the 2016 total. However, the number of pay TV subscribers will grow from 7.15 million in 2018 to 9.01 million in 2024. Turk Telekom will become the region’s largest operator by subscriber numbers in 2020.

Middle East & North Africa Pay TV Forecasts

Published in January 2019, this 200-page PDF and excel report is our ninth edition. The report comes in three parts:

• Outlook: Forecasts for 20 countries in a 47-page PowerPoint document full of charts, graphs and bullet points; • Excel workbook covering each year from 2010 to 2024 for 20 countries by household penetration, by pay TV subscribers, by pay TV revenues and by major operator. As well as summary tables by country and by platform; • Insight: Detailed country-by-country analysis in a 73-page PDF document.

For more information, please click here or contact [email protected]

Forecasts for the following 20 countries and 50 platforms:

Country No of ops Platform forecasts Algeria 3 beIN; OSN; Algerie Telecom Armenia 0 Azerbaijan 0 Bahrain 3 beIN; OSN; Batelco 3 beIN; OSN; Telecom Egypt Georgia 2 Magtisat; Sliknet Israel 3 ; ; Bezeq Jordan 3 beIN; OSN; Orange Kazakhstan 2 Alma; KT Kuwait 2 beIN; OSN Lebanon 2 beIN; OSN Morocco 3 beIN; OSN; Maroc Telecom Oman 3 beIN; OSN; Omantel Qatar 3 beIN; OSN; Ooredoo 4 beIN; OSN; Invision; Mobily Syria 1 beIN Tunisia 2 beIN; OSN Turkey 5 Turksat; Turkcell; TTNet; ; D-Smart UAE 4 beIN; OSN; Du; eLife Uzbekistan 2 Uztelecom; Uzdigital

SAMPLE: Saudi Arabia pay TV insight

• Saudi Arabia achieved 100% digital TV penetration in 2015. About 87% of the 6.07 million TV households receive satellite signals, with the vast majority taking -to-air channels. Despite IPTV growth, the pay TV penetration rate will only be 19.4% in 2024, up by 5 percentage points on 2018.

Main assumptions behind the forecasts • FTA satellite is the most common platform. • Pay satellite TV has been hit by the ban on beIN (Saudi Arabia was its largest market) and the illegal nature of BeoutQ. • IPTV will continue to grow. • Analog switch-off took place in 2015. Source: Digital TV Research

• Pay TV revenues will reach $417 million in 2024, up by $110 million on 2018. Satellite TV ($222 million in 2024) will supply most of the pay TV revenues, although its share of the total will fall as IPTV ($195 million) makes its mark.

• The ongoing dispute between Saudi Arabia and Qatar has hit beIN’s subscriber numbers across the region. Most governments have followed the Saudi ban on beIN – although not all of them have enforced the ban that effectively. The ban started in mid-2017. However, we believe that it will be resolved in 2019; given the pressure on Saudi Arabia to drop the ban and to close pirate platform BeoutQ from many organizations, especially sports federations and other content owners.

• beIN is owned by . Part of the disagreement involves the Saudi government not liking comments made on Al Jazeera about its regime. The same is true of the Egyptian government. Egypt and Saudi Arabia were key markets for beIN. Even when the ban on beIN is lifted and BeoutQ closed down, beIN is unlikely to regain its former subs numbers in Saudi Arabia and Egypt.

• beIN lost 276,000 subscribers in the two years to end-2018 to take its total to 114,000. Despite the likely lifting of the ban and the expected closure of BeoutQ, the 2016 total is unlikely to be recovered during our forecast period as the government will continue to discourage beIN subscriptions. We forecast that beIN will have 349,000 subs by 2024.

beIN monthly subscription fees ($) Package Channels Price Access 47 10 Top Sports Access + 14 channels 25 Top Entertainment Access + 26 channels 25 Complete 67 channels 30 Elite Complete + World Cup and Euros + on- 45 demand access Source: beIN

• Sports is a major attraction for beIN. As well as World Cup and Euros soccer, beIN holds the rights to European Champions League, , Bundesliga, , La Ligue and English football. Furthermore, it screens NBA, ATP tennis and three Opens, F1 and Tour de France action. beIN has 13 dedicated sports channels. beIN is broadening its appeal into the Entertainment sphere. beIN acquired the studio in March 2016.

OSN monthly subscription fees Package Channels Price El Farq 69 SAR149 Platinum 93 SAR538 Source: OSN

• OSN had 293,000 residential satellite TV subscribers in Saudi Arabia by end- 2018, with only 18,000 more expected to be added by 2024.

• Satellite TV platform Arab Radio and Television (ART) is Saudi backed. Reports suggested that ART had as many as 1 million satellite TV subscribers across the Arabic-speaking countries, although the total fell after ART joined forces with former rival OSN.

• In March 2014, Saudi-based Arabsat ordered four more satellites; two to replace existing satellites and two to increase capacity. The satellites will launch in 2016 and 2017.

Saudi Arabia: Fixed broadband subscribers (million) 2010 2011 2012 2013 2014 2015 2016 2017 3Q18 DSL 1.49 1.56 1.87 1.85 1.38 1.57 1.62 1.40 0.95 Fiber 0.43 0.45 0.58 0.70 0.79 Wimax 0.20 0.30 0.55 0.80 1.22 1.54 1.09 0.40 0.33 Other 0.05 0.04 0.08 0.26 - - - - - Total 1.74 1.95 2.54 2.92 3.03 3.56 3.29 2.50 2.07 Mobile broadband 2.70 11.34 12.29 14.27 29.1 31.5 23.9 29.7 29.9 Source: CITC

• Fixed broadband penetration reached 2.07 million subs, including WiMAX, by September 2018. DSL subs numbers are falling, but the other category (which includes FTTH) is climbing.

• Saudi Telecoms Company is the largest telco (wireless and wireline) in the Arabic world. As well as offering up to a 300Mbps broadband connection, STC launched its Invision TV service (including Sports and various OSN packages. However, the beIN channels were dropped) offered as part of a triple-play package) in August 2010. We estimate that Invision had 305,000 subs by end-2018, with 409,000 forecast by 2024.

• The Basic package provides 90 FTA channels to triple-play subs. Jawwy TV provides linear channels and 7,000 on-demand titles. STC has carried Starz Play since September 2016. Other SVOD platforms include Widekhaliji (local programs) and BluTV (Turkish series).

• Etihad Etisalat, parent of mobile operator Mobily, owns 66% of the Saudi National Fiber Network, which comprises 24,000km. Mobily’s fiber optic network offers various TV packs (including OSN) and up to 450Mbps broadband speeds as part of triple-play bundles. We estimate that the company had 150,000 IPTV subs by end-2018, which will climb to 251,000 by 2024. Mobily carries Starz Play (SAR35/month).

• Etihad Atheeb, trading as Go and 15% owned by Bahrain’s Batelco, has 200,000 broadband subscribers (a mixture of WiMAX (up to 3Mbps) and FTTH (up to 200Mbps)) in 12 cities. The company is yet to launch an IPTV service. Batelco states that the company lost 13% of its subscribers in 2015, having lost 28% in 2014.

• In May 2017, Zain signed a pan-regional distribution deal with Iflix. Zain also provides access to Shahid Plus (SAR20/month). Zain had 8.0 million subscribers in Saudi Arabia by September 2018.

• Launched in June 2006, the five-channel DTT package reaches 90% of the population, although take-up has been limited. Up to 30 channels (including commercial ones) are eventually planned. Thomson Broadcast won the contract to update the network to DVB-T2 in 2014. Analog terrestrial switch-off took place in 2015.

• The Al Saud family has an iron grip on the country. However, the Kingdom has been subject to attacks from militant Islamic fundamentalists, who oppose Saudi Arabia’s close ties to the US.

• GDP per capita was $23,187 in 2018, according to the International Monetary Fund. GDP growth will be at the regional average in the next five years. Unemployment rates are fairly high.

• A strict adherent of Islam, Saudi Arabia is the largest Gulf State. Around 8.0 million of the 33.20 million population are expatriates. has a population of 6.86 million, followed by Jeddah (4.33 million), Mecca (1.86 million), Ad- Dammam (1.13 million) and Medina (1.35 million).

Saudi Arabia pay TV forecasts

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Total households (000) TV households (000) Digital cable subs (000) Analog cable subs (000) Pay IPTV subscribers (000) Pay digital Satellite TV subs (000) Free-to-air Satellite TV HH (000) Analog terrestrial households (000) Primary FTA DTT households (000) Primary Pay DTT households (000)

Digital homes (000) Analog homes (000) Pay TV subscribers (000) Total DTT homes (000)

Digital cable subs/TV HH Analog cable subs/TV HH Pay IPTV subs/TV HH Pay Satellite TV/TV HH Free-to-air Satellite TV/TV HH Analog terrestrial/TVHH Primary FTA DTT/TV HH Primary pay DTT/TV HH

TVHH/Total HH Digital/TV HH Analog/TV HH Pay TV Subs/TV HH Total DTT/TVHH

Stand-alone digital cable subs (000) Dual-play digital cable subs (000) Triple-play digital cable subs (000)

Stand-alone pay IPTV subs (000) Dual-play pay IPTV subs (000) Triple-play pay IPTV subs (000)

Saudi Arabia pay TV forecasts

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Revenues (US$ million) Stand-alone digital cable revs Dual-play digital cable TV revs Triple-play digital cable TV revenues Digital cable TV subs revenues Digital cable TV on-demand revs Digital cable TV revenues Analog cable TV subs revs Cable TV revenues Stand-alone IPTV revenues Dual-play IPTV revenues Triple-play IPTV revenues IPTV subscription revenues IPTV on-demand revenues IPTV revenues Satellite TV subscription revenues Satellite TV on-demand revenues Satellite TV revenues DTT subscription revs DTT on-demand revenues DTT revenues Subscription revenues On-demand revenues Total revenues

Average Revenue Per User (ARPU - US$) Stand-alone digital cable subs Dual-play digital cable TV subs Triple-play digital cable TV subs Average digital cable (subs & VOD) Analog cable TV subs Stand-alone IPTV subs Dual-play IPTV subs Triple-play IPTV subs Average IPTV (subs and VOD) Pay Satellite TV (subs) Pay Satellite TV (subs and PPV) Pay DTT (subs) Pay DTT (subs and PPV) Average monthly ARPU

Saudi Arabia pay TV forecasts

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Pay TV subscribers by operator (000) beIN (satellite) OSN (satellite) Invision (IPTV) Mobily (IPTV) Others

Share of pay TV subs by operator % beIN (satellite) OSN (satellite) Invision (IPTV) Mobily (IPTV) Others

Subscription & VOD revenues (US$ million) beIN (satellite) OSN (satellite) Invision (IPTV) Mobily (IPTV) Others

Share of pay TV revenues by operator % beIN (satellite) OSN (satellite) Invision (IPTV) Mobily (IPTV) Others

Average Revenue Per User (ARPU - US$) beIN (satellite) OSN (satellite) Invision (IPTV) Mobily (IPTV)

Source: digital TV research

Saudi Arabia pay TV outlook

Homes by platform (000) 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2017 2018 2019 2020 2024 A terres 0 0 0 0 0 Pay DTT 0 0 0 0 0 Free DTT 458 352 278 214 41 Free satellite 4,606 4,854 4,942 5,041 5,446 Pay Satellite 493 407 445 485 660 IPTV 386 455 513 561 660 A Cable 0 0 0 0 0 D cable 0 0 0 0 0

Revenues by platform ($m) 450 400 350 300 250 200 150 100 50 0 2017 2018 2019 2020 2024 Pay DTT 0 0 0 0 0 Pay Satellite 228 181 169 175 222 IPTV 104 126 145 161 195 A Cable 0 0 0 0 0 D cable 0 0 0 0 0

Saudi Arabia pay TV outlook

Pay TV subs by operator (000) 1,400

1,200

1,000

800

600

400

200

0 2017 2018 2019 2020 2024 Others 0 0 0 0 0 Mobily 124 150 174 196 251 Invision 263 305 338 365 409 OSN 291 293 296 299 311 beIN 202 114 149 186 349

Pay TV revenues by operator ($m) 450 400 350 300 250 200 150 100 50 0 2017 2018 2019 2020 2024 Others 0 0 0 0 0 Mobily 33 41 49 56 74 Invision 71 85 96 105 121 OSN 152 140 134 130 126 beIN 75 41 35 45 96

Digital TV Research publication schedule 2019 Middle East & North Africa Pay TV Forecasts January £1000/€1200/$1300 Sub-Saharan Africa Pay TV Forecasts January £1000/€1200/$1300 Sub-Saharan Africa OTT TV & Video Forecasts January £1000/€1200/$1300

2018 European TV Databook November £750/€900/$975 SVOD Databook November £650/€780/$845 TV Forecasts October £1500/€1800/$1950 Western Europe TV Outlook October £1200/€1440/$1560 TV Databook October £1000/€1200/$1300 SVOD Outlook by Country October £1000/€1200/$1300 Eastern Europe OTT TV & Video Forecasts September £1000/€1200/$1300 Western Europe OTT TV & Video Forecasts September £1000/€1200/$1300 Global OTT TV & Video Forecasts September £1800/€2160/$2340 Global SVOD Forecasts September £1500/€1800/$1950 Latin America OTT TV & Video Forecasts August £1000/€1200/$1300 North America OTT TV & Video Forecasts August £500/€600/$650 Middle East & North Africa OTT TV & Video July £1000/€1200/$1300 Forecasts Asia Pacific OTT TV & Video Forecasts July £1000/€1200/$1300 Pay TV Subscriber Prospects May £800/€960/$1040 Pay TV Revenue Prospects May £800/€960/$1040 vMVPD and D2C TV Forecasts May £900/€1,080/$1170 Forecasts May £700/€840/$910 Global Pay TV Subscriber Forecasts April £1500/€1800/$1950 Global Pay TV Revenue Forecasts April £1500/€1800/$1950 Global Pay TV Operator Forecasts April £1500/€1800/$1950 Latin America Pay TV Forecasts March £1200/€1440/$1560 North America Pay TV Forecasts March £500/€600/$650 Eastern Europe Pay TV Forecasts March £1200/€1440/$1560 Western Europe Pay TV Forecasts March £1200/€1440/$1560 Asia Pacific Pay TV Forecasts April £1200/€1440/$1560

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