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pIFC Spacecom DTVE MEA17.indd 1 26/10/2017 09:35 Digital TV Europe Middle East & Africa 2017 > Contents November 2017
Winds of change Middle East & Africa
Middle East and Africa are seen as emerging markets for pay 2017 The TV. Video consumption across both regions remains largely dominated by free TV and there is plenty of room for growth. However, new OTT TV services are beginning to make an impact, and the Issue no 335 way pay TV operators are marketing their services is changing in response. In Africa, multiple entrants offering lower-cost options have challenged Published By: MultiChoice’s dominance of pay TV. These include recent entrant Kwesé TV KNect365 TMT from Econet Media. In this issue of Digital TV Europe’s Middle East & Africa, Maple House we interview Econet Media CEO Joseph Hundal about the company’s plans. 149 Tottenham Court Road Africa has also seen the launch of multiple streaming services, the latest of which is Trace London W1T 7AD Play. We interview Trace co-founder and CEO Olivier Laouchez about this and his plans for the Tel: +44 (0) 20 7017 5000 launch of further channels, including a dedicated service for the Democratic Republic of Congo. Fax: +44 (0) 20 7017 4953 The Middle East has seen multiple SVOD players pitch their offerings to a young and in- Website: www.digitaltveurope.com creasingly tech-savvy audience. We assess the strategies of Starz Play, Iflix, Netflix, Icflix and others and look at the ways in which pay TV operators OSN and beIN Media – itself further challenged by the regional boycott of Qatar – are responding. Editor Stuart Thomson Finally, original content is increasingly seen as a differentiator in the Middle East. We report Tel: +44 (0) 20 7017 5314 on how the region’s content creators are now looking to a wider international market. Email: [email protected]
Stuart Thomson, Editor Contributing Editor Andy McDonald [email protected] Tel: +44 (0) 20 7017 5293 Email: [email protected]
Contributor Contents Rebecca Hawkes
Africa: the big picture 2 Commercial Director Patricia Arescy Africa’s subscription TV market continues to grow, with competition between regional, local Tel: +44 (0) 20 7017 5320 and emerging digital players. We look at the numbers and likely future developments. Email: [email protected]
Kwesé right now 6 Art Director Matthew Humberstone Andy McDonald talks to Econet Media CEO Joseph Hundah ab0ut his plans for Kwesé TV. Marketing Manager Marita Eleftheriadou Trace on track 10 Printing Wyndeham Grange, West Sussex Stuart Thomson talks to Trace CEO Olivier Laouchez about Trace Play and new channel plans.
The Middle East: the big picture 12 To subscribe to this magazine or our A young tech-savvy population and growing broadband penetration is having an impact on pay TV and OTT TV in the region. We look at the numbers and the evolution of the industry. daily email newsletter please visit digitaltveurope.net/registerhere Lines in the sand 18 Rebecca Hawkes assesses the changing face of pay TV broadcasting and the impact on the market of new OTT TV services.
© 2017 Informa UK Ltd ME creators look to wider market 24 All rights reserved Reproduction without permission is prohibited Middle East content creators are looking beyond the region. Stuart Thomson reports.
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p01 Ed Note MEA17v3am.indd 1 27/10/2017 17:22 Middle East & Africa 2017 > Africa and its growth prospects Digital TV Europe November 2017 Africa: the big picture
Long-delayed Algeria Angola Botswana
implementation12000000 of 350000 80000
70000 digital switchover10000000 is 300000 60000 now underway in a 250000 8000000 50000 number of African 200000 6000000 40000 countries, while 150000 30000 4000000 pay TV competition 100000 20000 2000000 is heating up. 50000 10000 10,929,712 2,500 2,113,527 78,000 314,000 11,250 73,688 80,000 41,275 0 0 0
Cabo Verde Egypt Ethiopia Ghana
20000 15000000 120000 500000
100000 12000000 400000 15000 80000 9000000 300000
10000 60000
6000000 200000 40000 5000 3000000 100000 20000 45,000* 13,269,000* 52,300 4,918,918 22,064 102,625 13,558 18,720 156,602 406,354 237,237 0 0 0 0
Kenya Libya Malawi Mauritania
400000 250000 80000 15000
350000 70000 200000 12000 300000 60000
250000 50000 150000 9000
200000 40000
100000 6000 150000 30000
100000 20000 50000 3000 50000 10000 63,731 1,310 6,050 12,262 105,558 382,582 91,500 184,491 2,000 250,000 0 0 0 0
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p02-03 Africa charts MEA17v2st.indd 2 27/10/2017 17:17 Digital TV Europe Technology focus > Africa and its growth prospects November 2017
Mauritius Morocco Mozambique Namibia
200000 8000000 150000 100000
7000000 120000 80000 150000 6000000
5000000 90000 60000
100000 4000000
60000 40000 3000000
50000 2000000 30000 20000 1000000 146,000 41,750 35,500 12,815 140,823 187,966 6,796,950 69,600 1,567,808 84,750 85,250 74,208 0 0 0 0
Nigeria Rwanda Senegal Seychelles
6000000 40000 300000 25000
35000 5000000 250000 20000 30000 4000000 200000 25000 15000
3000000 20000 150000
10000 15000 2000000 100000 10000 5000 1000000 50000 5000 12,948 38,215 21,221 20,700 365 1,178,125 5,987,500 1,591,968 254,750 18,000 96,042 0 0 0 0
South Africa Sudan Tanzania Tunisia
8000000 80000 1000000 2500000
7000000 70000 800000 2000000 6000000 60000
5000000 50000 600000 1500000
4000000 40000
400000 1000000 3000000 30000
2000000 20000 200000 500000 1000000 10000 3,000 79,000 2,143,145 1,149,065 7,651,468 35,750 1,815,506 181,079 0 0 0 247,261 948,970 92,362 0
Uganda Zambia Zimbabwe
250000 150000 500000
200000 120000 400000 Key
150000 90000 300000
Cable DTH DTT IPTV Broad- 100000 60000 200000 band
50000 30000 100000 Notes: * Q2 gures 86,500 462,720 139,735 36,795 0 235,302 121,408 0 0 Source: Ovum/WBIS
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p02-03 Africa charts MEA17v2st.indd 3 27/10/2017 17:18 Middle East & Africa 2017 > Africa and its growth prospects Digital TV Europe November 2017
Africa: the big picture Accurate data about TV numbers in Africa remains challenging, but the region’s subscription TV market continues to grow, with more competition between regional, local and emerging digital players.
accurate data Smaller players include Zuku, a signficant overall pay TV market was worth €6.6 billion Gathering about TV pay TV force in the regional East African at the end of last year and is set to grow to penetration in Africa is highly challenging. market, Starsat, My TV and Azam TV. about €9 billion by the end of 2021. While satellite operators make a significant Angola’s Zap TV also has a significant base S0uth Africa aside, TV household investment in counting heads, it is more in its domestic market. Recent entrant Econet penetration remains low in many markets difficult to make an accurate assessment Media, which operates a pay TV service under across the continent, often hovering in the about digital-terrestrial numbers – and also the Kwesé brand in several African countries, low-to-mid teens. Digital switchover is in the still huge number of analogue TV homes. is profiled elsewhere in this publication. general progressing slowly, hampered by lack Comparing penetration figures for different There are significant concentrations of pay of funds, lack of affordability, and regulatory TV platforms is therefore extremely difficult. TV homes in Nigeria and South Africa – sub- issues. The figures presented on the preceding pages Saharan Africa’s biggest economies – with Football rights remain a key driver of are based on available information and do not these two markets representing about half of pay TV, with platforms focusing on a male necessearily reflect the reality of the balance all pay TV homes. These two countries also audience primarily. However, the popularity of between satellite and digital-terrestrial, account for over half of all TV households Nollywood content and telenovelas indicates for example, in all cases. Pay TV numbers in sub-Saharan Africa, according to Ovum, a recent movement towards creating more are possibly easier to gauge, but gathering which estimates that there are 13.6 million appeal for a female audience. accurate statistics is nevertheless challenging. TV homes in South Africa – an exceptionally According to analyst group Ovum, about high penetration of 81%. Pay TV services are one third of all households in sub-Saharan taken by almost half of these. Nigeria, on the Digital platforms Africa – just over 60 million – could be other hand, has an estimated 17.5 million TV counted as TV homes at the end of 2016, homes, according to Ovum, with about 5.5 Digital platforms meanwhile remain in their with pay TV homes representing about 40% million pay TV subscribers at the end of 2016. infancy, but SVOD services such as Netflix, of that total. The vast majority of these pay Despite the presence of satellite as a key along with local players, do exist and are TV homes took services from trans-national distribution mechanism in many markets, competing for eyeballs. operators rather than local players, according Ovum expects that digital-terrestrial TV will The high penetration of mobile phones to Ovum. MultiChoice is the leading operator be the dominant platform going forwards, across the continent continues to present – accounting for about half of the pay TV with digital switchover completed by the end an attractive target to content providers. total, followed by StarTimes, which has a base of 2020. The analyst group estimates that According to Digital TV Research, mobile about two thirds the size of MultiChoice’s. DTT and analogue terrestrial broadcasting distribution will be the overriding factor in the accounted for 37% of TV homes each at the take up of OTT services. With the number of end of last year, with pay and free satellite fixed broadband homes only expected to reach Pay TV subscribers together accounting for 24%. 13 million by 2022, the estimated 486 million According to Ovum, digital-terrestrial is smartphones users in the region will be the While Ovum estimates that there were about already the leading pay TV platform in terms key demographic for operators, according to 24.6 million pay TV subscribers at the end of of numbers even if the lion’s share of revenue the research outfit. SVOD is already the main last year, rival analyst outfit Dataxis estimates still goes to satellite platforms. Dataxis, another revenue driver for OTT TV and video revenues there were 23.7 million at the end of the research outfit, on the other hand estimates in sub-Saharan Africa, according to Digital TV second quarter of this year. that DTH currently accounts for 70.8% of pay Research. While revenues were just US$22 The other major player, with a focus on TV homes, with DTT accounting for 24.2%. million, they are set for exponential growth Francophone Africa, is Canal+, which has StarTimes has benefited significantly from by 2022, when they are predicted to reach grown its base on the continent in leaps and the boom in DTT, while its satellite sister US$475 million, according to the outfit. In bounds over the last couple of years, with company continues to lag MultiChoice’s DStv, total, there will be an estimated 10.12 million growing in Africa regularly highlighted by the according to Ovum, which estimates that the SVOD customers, up from 525,000 at end- company in its quarterly results presentations, overall pay TV market is worth about US$5 2016, and South Africa will contribute 2.7 compensating for ongoing subscriber losses billion (€4.25 billion). Another analyst group, million of these, followed by Nigeria with 2.64 in metropolitan France. IDATE, on the other hand estimated that the million, says Digital TV Research.
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p04 Africa Analysis MEA17v4st.indd 4 27/10/2017 17:20 p05 CSGI DTVE MEA17.indd 1 25/10/2017 14:19 Middle East & Africa 2107 > Kwesé Digital TV Europe November 2017
Kwesé right now
Econet Media’s president and CEO, Joseph Hundah, discusses this year’s launch of Kwesé TV and talks about the company’s ambitious multi-platform expansion plans. Andy McDonald reports.
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p06-08 Kwese MEA17v3st.indd 6 27/10/2017 17:35 Digital TV Europe Middle East & Africa 2017 > Kwesé November 2017
Launched by Econet Media, a subsidiary Hundah says that while the 2017 launch may of global telecoms provider Econet Wireless, not have been deliberate, it was nevertheless Kwesé TV targets both the growing African pay good timing, as a number of sports and content TV market and Africa’s huge youth audience. rights fell into their renewal phase in 2016 However Kwesé’s route to market has not been and 2017. This allowed Kwesé to snap up free- entirely smooth, and its first launches came to-air rights to high-profile sports like English more than a year Econet Wireless owner, Stive Premiere League football, NBA basketball and Masiyiwa, announced plans for a sub-Saharan NFL American football and launch the fully free- TV service that would offer a range of sports to-air sports channel, Kwesé Free Sports. This and entertainment, including to mobile users. started broadcasting last year and preceded all of Kwesé’s pay TV rollouts. As a result, sport has become key to establishing the Kwesé brand. Building credibility Kwesé Free Sports now broadcasts in some 10 countries across Africa and it has Econet Media president and CEO Joseph affiliations in another 20, meaning it provides Hundah explains that the journey the company programming blocks to partner channels. went on for the launch of Kwesé TV started “Our intention was to become the biggest free- “almost three years ago” and admits that 2017 to-air channel in Africa, and we’ve achieved it,” has been “a difficult year for many reasons”. says Hundah, claiming that the channel rules While the timing of Kwesé’s rollout “couldn’t the African free-to-air space in terms of both have been better”, it was not necessarily viewership and geographical reach. deliberate, says Hundah. “As you know it really Hundah explains that the channel has takes a long time to get the right people in place, served a tactical purpose by introducing the the right amount of content, [and] building up Kwesé brand to a much wider audience than some credibility in the market,” he says. the pay TV subscriber base it is now targeting. Kwesé TV initially launched at the start of this “The brand is out there and people understand year in a handful of smaller African markets and associate Kwesé with quality,” he says. such as Rwanda, Lesotho, Zambia, and Ghana. “As we are launching our pay TV business, However, its full launch plans had to be revised we are finding that the penetration of the after the company entered into a strategic market is much easier, because the brand is transaction that “didn’t work out”. Though already well known in the market. I think from Hundah won’t go into details, he says that this that perspective we have achieved what we episode caused delays that put its subsequent wanted to achieve with our Kwesé Free Sports launches back by about six months. platform.” Fast-forward to the latter part of September Outside of sports, Kwesé TV’s content and Kwesé started to go live in more markets, line-up has focused on a relatively slim including some of its biggest territories. offering of channels, compared to the Services in Kenya, Zimbabwe, Nigeria, hundreds of networks offered by many its Botswana and Uganda are all now live and by pay TV counterparts in western Europe or the end of November Hundah estimates that North America. Hundah says that by the Kwesé TV will be available in about 15 markets end of November, Kwesé will offer roughly across the continent. 75 channels, of which around 30% will be At the time of this interview, the only exclusive. With the launch of two new family- has seen the holdouts were Tanzania and Ethiopia. Tanzania oriented channels it will also have over 10 This year introduction of a is the only market Econet Media is yet to secure branded channels covering movies, kids major new player to the African pay TV space. a licence – though Hundah is confident it has content, lifestyle programming and more. Kwesé TV started to roll out its direct-to-home met all the necessary criteria – while Ethiopia, “As you know, in pay TV, the more exclusive (DTH) satellite offering in January, taking on he says, is “quite a difficult market to enter in channels you have, the more traction you are incumbent MultiChoice with a flexible TV general”. likely to have in terms of acquiring subscribers,” package aimed at middle and upper middle “For us, it has really been almost a whole year says Hundah. “We’re happy with the balance class customers. we’ve spent refining and testing our business, of our bouquet. It’s not large – deliberately so. Kwesé lets viewers opt for three-day, seven- based on the markets in which we were in,” We’re quite comfortable with our 75 [channels], day or monthly pay TV packages and its DTH says Hundah. “But I believe that we’ve now and we believe that we are better off with service complements both free-to-air sports, entered into the markets that we will see real more quality than having quantity. That’s and over-the-top and mobile offerings, the growth. This is the high-population markets what we planned for, from a channels-spread latter of which is still being developed. with good penetration of TV households.” perspective.”
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p06-08 Kwese MEA17v3st.indd 7 27/10/2017 17:35 Middle East & Africa 2107 > Kwesé Digital TV Europe November 2017
Kwesé TV’s content line-up includes Turner Kwesé TV launched its DTH pay TV offering channels like CNN International, Cartoon in a number of African markets in January. Network and Toonami; Scripps Networks Interactive networks like Travel Channel and the local entertainment plans. “Sometimes you Fine Living; Trace-branded channels like Trace have to start something and learn your lesson Africa and Trace Gospel; two Zee Entertainment before you perfect it. We certainly are taking it Enterprises channels adapted for the African easy initially, because we want to get it perfected market, Zee Bollymovies and Zee Bollynova; with the local productions unit and how they and a version of the AMC Channel. It offers a operate. Then from there we will proceed to host of news channels including BBC World rapidly expand.” News, Sky News, Africanews, France 24, Al us to compete with them. However, what we Jazeera and Bloomberg. On the kids front it has decided to do was to partner with them.” Boomerang, CBeebies and Jim Jam. It is also the Multi-platform focus Hundah believes “there’s a good future for exclusive African home to Revolt TV – the US this part of the business”. Expanding with the multi-platform TV network owned by US rapper, Kwesé is a pay TV operator that is taking various help of ISP partners will help Kwesé Play to gain producer and businessman Sean ‘Diddy’ Combs. routes to market. Kwesé Play is its over-the-top traction, especially with the price of connectivity Vice Media announced in January that its streaming service primarily aimed at a high- in Africa “dropping quite significantly on an Viceland channel would launch exclusively in end demographic – owing to the fact it relies on annual basis” as LTE and cable rollouts continue. Africa with Kwesé TV and at MIPCOM this year users having uncapped broadband connections. Kwesé also has a mobile plan in the offing. the two companies expanded their partnership Currently available in South Africa, Hundah This will be based around a mobile-specific app, by launching Kwesé Vice. This joint venture will says the service should be available in some 10 targeted at the youth market. Econet already focus on developing, producing and distributing markets by the end of the year and that the next has a wide footprint across the continent and local content and original video programming – phase of its growth will involve partnering with Hundah says that Kwesé has signed deals with both for Kwesé Vice’s channels and third party the major African internet service providers. other major mobile operators working in Africa platforms. The venture is due to launch in 2018 Hundah says that allowing them to offer Kwesé – including Vodacom, Vodafone, MTN and Tigo and will involve the establishment of a new Play to their broadband subscribers will help – to supply them with content. bureau and production studio in Johannesburg, create “stickiness and traction”. “We are still refining the mobile strategy, but South Africa. Kwesé Play is available with the backing of we intend to launch the mobile product, probably From its own branded channel stable, some high profile partners. The Kwesé Play by the middle of November if everything goes Kwesé’s line-up includes Kwesé Info, Kwesé box is provided and powered by Roku, as part well,” says Hundah. “In essence the idea is to Prime, Kwesé Stories, Kwesé Know, Kwesé of a ‘Roku Powered’ deal between Econet give this content to our mobile network operator Kids, three Kwesé Movies channels, and two Media and the streaming platform provider. partners for them to exploit, because obviously Kwesé sports channels on top of its free sports “The reason why we partnered with Roku was they’re looking at ways to increase data usage offering. For these, it has active plans to make its because they have most of the online streaming and we are looking for ways to target a market own original productions. “I’m fully of the belief services already integrated into their box,” says that we think might never own a satellite TV that without local content, competition is going Hundah, claiming this made it “so much easier subscription.” to be difficult,” says Hundah. “We’ve already to launch”. According to UN data, Africa has the youngest commissioned about eight shows that will go While Roku supports more than 2,500 population in the world, with the median age into our owned content portfolio, and we’ve tried streaming services, Hundah explains that for just 19.7 years old. Hundah says that Kwesé’s to cover all genres.” Kwesé Play it decided to launch with a curated aim is to reach this mobile-centric audience “We’ve done two dramas, we’ve got some line-up of roughly 100 channels – with the with short-form, mobile-optimised content – lifestyle shows, some entrepreneurship shows. notable inclusion of Netflix as an ‘anchor tenant’ including sports highlights. He says Kwesé is Our next step is probably to do something with on the platform. “It has taken us two years, but “working aggressively towards” realising these shiny-floor [studio entertainment] formats. But eventually we’ve signed a distribution deal with plans. local content is absolutely key in Africa and our Netflix for the African continent,” says Hundah. Hundah concedes that competing against strategy has to include how we develop that part “We’re still very much in our infancy, but the MultiChoice, which has had more than a 20- of our business quite quickly.” plan is obviously to add more services on the pay year head start in the African market, will be For the free-to-air Kwesé Free Sports channel, side of the platform.” tough. But he believes Kwesé has built a strong Hundah says that the plan is to completely The Kwesé Play line-up includes services like product and has made strong progress in a short customise by country so that it has local content TED, Red Bull TV and YouTube and was based space of time. By targeting an affluent audience in markets such as Kenya, Botswana and around the idea that Kwesé should not launch of young Africans aged 15-39, Kwesé is carving Zambia. On the general entertainment front its own VOD offering for the platform. “I think out a compelling proposition. it will take a different approach, focusing on if Netflix do what they do in terms of creating “We are cognisant of the fact that the creating local shows for larger markets first. local content, they will win the space along with population is a young population,” says “Our intent is not to go local in every single Amazon and there could be one or two more,” Hundah. “We’re trying to build a product for the market – it’s just not viable,” says Hundah of says Hundah. “It didn’t make strategic sense for future.”
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p06-08 Kwese MEA17v3st.indd 8 27/10/2017 17:35 Q&A: Steeve Huin, Irdeto
Steeve Huin, vice-president of strategic partnerships, Irdeto, talks about the rise of OTT, new methods of pay TV content delivery and the challenges and opportunities for pay TV operators.
How signi cant overall is the evolution of OTT TV technology for This has led to increasing collaboration or strategic coexistence, mainstream pay TV operators and do you expect them to adopt OTT rather than competition, between traditional pay TV operators and OTT as their principal way to reach subscribers? players. Many operators today are looking for ways to collaborate with The growth in demand for OTT services shows no signs of abating, such services as Net ix, or even non-traditional TV platforms. with predictions suggesting that global OTT revenues will reach US$65 billion by 2021. This is largely being driven by the increasing uptake and What do operators need to think about in building a hybrid platform global expansion of services like Net ix, which launched in the Middle that combines mainstream pay TV services with OTT o erings and East and Africa last year. However, mainstream pay TV operators are also delivery of services to multiple screens? getting involved in OTT as they see consumer attitudes changing. The common approach to achieve this collaboration is for operators to As demand continues to grow in the Middle East and Africa, there are o er a hybrid set-top box (STB) with linear TV and OTT services – be it three trends which are set to continue: consumers want OTT services their own or from partners. This way the operator controls the HDMI 1 on devices of their choosing, they continually expect more value for and gets consumers to pay attention to their content instead of the OTT their money, and, they want customised experiences. While traditional apps on the smart TV. methods of pay TV delivery will maintain their importance in the region An option for operators that want to launch a hybrid set top box for many years to come, operators know that these trends cannot be quickly, with low development and operational costs, is Android TV. By ignored. leveraging the built-in features of Android TV, operators can add their broadcast service in six to nine months, or shorter if they leverage a pre- What are the principal challenges faced by operators in securely integrated solution from a security partner. Android TV also brings an delivering content to managed and unmanaged devices without exciting app ecosystem that consumers have come to expect. duplicating costs and e ort? Operators now face the challenge of the higher security demands of What are some of the newer methods of delivery of pay TV content new technologies like 4K UHD, combined with the undeniable consumer aside from set-top boxes? shift towards viewing on unmanaged, connected devices. MovieLabs’ The Global Pay TV Revenue Forecasts report from Digital TV Research Enhanced Content Protection (ECP) requirements around premium estimates that pay TV revenues sub-Saharan Africa will surge by 57% content are upping the ante for delivery to unmanaged devices. Many of between 2016 and 2022. these requirements we’ve come to expect in managed devices, but they Despite this continuing high demand, pay TV operators must still have also raised the bar for OTT services to unmanaged devices, meaning look to capitalise on new methods of secure delivery of their broadcast they must have similar security levels to the STB. De ning a solid hybrid content, to serve consumer convenience and make the sign-on process strategy that meets both security requirements and business needs is easier and cheaper. Irdeto’s partnership with home and professional therefore critical to ensuring cost and e ort is not duplicated. appliance manufacturer, Vestel o ers pre-integrated pay TV security capabilities within a TV. This means that consumers can now have the What are the challenges in opening up traditional pay TV platforms best of both worlds – instant access to their favourite pay TV service, through partnerships with OTT TV providers such as Net ix and what on the big screen without extra equipment. For operators this has the technology requirements are associated with this? potential to make subscriber acquisition easier, by providing consumers A recent report from IDATE predicted that the number of pay TV with frictionless instant-access pay TV services on a new TV that they subscribers will almost double in the next ve years in the Middle East purchase. and Africa. This, combined with the growth in OTT, signals a clear demand In addition, Irdeto recently announced a partnership to o er a for quality content through both broadcast and OTT. Therefore, the CI plus 2.0 USB CAM – another cost-e ective way for operators to main challenge for operators is to navigate this converging ecosystem provide consumers access to pay TV without a set-top box. This will and ensure that consumers can receive premium content securely, and enable operators all around the world to leverage a trusted and proven with the best possible user experience, however it is delivered. standard-based technology that was until now mostly limited to Europe.
p09 Irdeto Q&A DTVE MEA17.indd 1 27/10/2017 10:11 Middle East & Africa 2107 > Trace Digital TV Europe November 2017
Trace on track
With the recent launch of streaming service Trace Play and the forthcoming launch of an MVNO and new channels, urban music and culture specialist Trace is in the midst of a period of frenetic activity. Co-founder, chairman and CEO Olivier Laouchez took time out at MIPCOM to talk to Stuart Thomson about his plans.
-urban music and entertainment commercially in November, with a focus on “broader choice than you can find on any one Afro provider Trace is in the midst of a Africa, France, the UK and the US as its core operator”, where typically Trace will distribute period of heightened activity. The urban culture- target markets. Currently the service has “a few three or four channels as opposed to the themed content provider recently launched thousand” subscribers, each paying 2.99, or complete line-up available on the player. streaming service Trace Play – its biggest digital the dollar, sterling or local currency equivalent. “In many countries we think we will have move to date – and is also forging ahead with In Africa in particular, Trace has focused a dual audience – of people just interested in the launch of new regional channels and a on bundling Trace Play with mobile services, urban music alongside the different diaspora mobile virtual network operator. especially deals that include a zero rating audiences who can find content on Trace Play Trace Play is now available on multiple for data used to view the service. Laouchez that the they can’t find anywhere else,” he says. platforms across some 200 territories, using a says that Trace is likely to close “six or seven” While the distribution mechanisms for platform built by Trace’s technology partner for significant distribution deals before the end Trace content are many and various, Laouchez the project, Simplestream. “This has been the of the year, including a deal already concluded is adamant that the key to success for Trace most complicated project we have ever done, with Orange. The service is also available on Play will be a clear focus on its core proposition I must confess. The technological dimension streaming devices including Roku, Apple TV – urban culture and music. “We put all our has been complex,” says Olivier Laouchez, and Amazon Fire TV as part of the Amazon content budget into reinforcing our music co-founder, chairman and CEO of Trace, Prime line-up. offering. We also do live concerts. We are speaking to Digital TV Europe on the Trace Laouchez says that Trace Play use has been producing some musical content. We don’t buy yacht at MIPCOM. “We learned a lot during concentrated on music and, primarily, on any content from American studios, because the journey. It was more complicated than linear consumption. He says that “90% of we don’t think we can make the difference we expected, especially because of multiple usage is somehow music-related” and that there,” he says. Recent scripted shows on the territories, language rights, platforms, type of linear TV accounts for 65-70% of usage, with platform include Nigerian productions Wives content and so on.” radio accounting for 20% and on-demand on Strike and Crazy, Lovely, Cool. Trace has also Laouchez says that Modern Times Group- consumption the balance. put money into UK-produced comedy show owned Trace will begin to market the service He says that Trace Play will give users a Brothers with no Game.
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p10-11 Trace MEA17v4st.indd 10 27/10/2017 17:24 Digital TV Europe Middle East & Africa 2017 > Trace November 2017
Live content will remain central to the “We are seeing the emergence of new talent proposition, however. Laouchez points to the New channels from the Indian Ocean…and there is not one fact that Trace is not only a broadcaster but an professional channel that covers all this music organiser of more than 200 major live events Regionalisation of content meanwhile remains and culture,” says Laouchez. this year alone. The company has a partnership a top priority for the company. Trace recently Regionalisation of its offering has long with the Afropunk series of events and is launched Trace Prime, its new channel for the been key to Trace’s strategy where “it makes also organising a Trace Roots event in South US. Laouchez is hopeful of striking a carriage economic and also cultural sense”, he says. Africa on November 4, while in Côte d’Ivoire deal for the service, which will also be available “You attract more advertising and investment it has teamed up with mobile operator MTN on OTT TV, soon. because you are more relevant for the region.” to sponsor a live festival in December. He Laouchez says that the company is looking Trace’s biggest current localisation project says that Trace is creating a dedicated section to create more programming blocks featuring is, however, a new channel that spotlights the of Trace Play for live events in order to stream underground artists in order to differentiate it culture and music of Africa’s biggest country, coverage of them. from more mainstream music offerings. In the Democratic Republic of Congo (DRC). Finally, says Laouchez, Trace is working on France, Trace plans to launch a Trace Hip-Hop Trace Kitoko, which is set to launch at the end a plan – still at an early stage – to potentially block on its flagship Trace Urban channel that of this year or the beginning of 2018, will be launch a Portuguese version of Trace Play, with will air for up to six hours during the night “so versioned in the Ngala language that is spoken expansion into the Brazilian market in mind. we can connect with this more edgy and picky both in the DRC and neighbouring Congo- Trace Play is not the only new major initiative audience”. Brazzaville. The primary target market for the from the company this year. Trace also has Trace also plans to launch a new channel channel is the 90 million-strong population of plans to launch its own MVNO in South Africa targeting the Indian Ocean. Within the Trace the DRC, together with the five-to-six million of as well as plans for the launch of new regional portfolio, the region’s musical currents have Congo-Brazzaville and a global diaspora of up channels. hitherto been served by its Trace Tropical to 10 million – over 100 million in total. Plans for the MVNO are already at an offering, which is primarily targeted at the “The DRC is the biggest French-speaking advanced stage. Trace Mobile will launch in Caribbean market, despite the fact that the two country in the world,” says Laouchez. “Because November on the Cell C network, building regions have distinctive musical cultures. of the civil war most international journalists on an existing branded mobile resale The new channel, Trace Vanilla, will launch don’t go there [but] the reality – and I was in offering. MVNO-enabler MVN-X is providing at the end of this year or the beginning of next, Kinshasa a few weeks ago and saw this – is technology. Trace Play will be an integral part says Laouchez. that this is a country where everybody is not of the MVNO offering. While the online just passionate but crazy about music. The big service will be available to all Cell C customers, artists there are superstars.” Laouchez says that “there will be a benefit” for However, Trace Kitoko is likely to have a customers that access it through Trace Mobile. broader appeal, given the popularity of artists of Laouchez says that Trace is hopeful of being Congolese origin in France. “Half of the biggest able to launch Trace Mobile in other parts of hip-hop artists in France are from the DRC.” Africa in the near future, with a target of “five Trace already took a step to enhance its or six” markets to see launches next year. He presence in the DRC in August, striking a deal adds, however, that the MVNO concept is with mobile player Africell to carry Trace Play still relatively new for Africa’s major mobile and for Trace to acquire radio station AfriRadio. operators, so it will take time for them to “see Laouchez says that Trace Kitoko will be how it works”. For Laouchez, a Trace-branded distributed in the DRC via partners but will telecom service is just one part of his overall be available globally via Trace Play. He says mobile strategy. Bringing content and exclusive one of Trace’s missions is to bring different experiences drawing on Trace’s media musical cultures together via its channels and and event activities is what will ultimately digital platform. Localised channels typically differentiate the MVNO offering, he says. comprise 70-80% local content supplemented Trace is also making moves to extract greater by material from other parts of the globe. value from its content IP and reach in the Laouchez is also mulling the launch of a new African market, launching a new distribution international channel “taking the best from arm – Trace Content Distribution – headed each region” in which it operates. He hopes by former France Télévisions and Lagardère this global hits offering will be ready in time for Studios executive Betty Sulty-Johnson. “It is Trace’s 15th birthday next year. expensive to produce content so you need “We want Trace to be a bridge between all multiple distribution partners,” says Laouchez. countries with a strong urban identify and populations of African descent because this is Trace Play streams Trace’s portfolio of linear what unites all the countries where we are have channels and on-demand content. a strong presence,” he says.
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p10-11 Trace MEA17v4st.indd 11 27/10/2017 17:24 Middle East & Africa 2017 > The Middle East and its growth prospects Digital TV Europe November 2017 Middle East: the big picture
Satellite remains the primary TV Bahrain
distribution technology in the Middle East,250000 with free-to-air viewing still predominant, but growing broadband penetration is 200000 providing an opportunity for new OTT 150000 TV players as well as existing pay TV 100000 providers. 50000 5,000 68,625 4,375 243,399 0
Iran Iraq
8000000 5000000
7000000 4000000 6000000
5000000 3000000
4000000
2000000 3000000
2000000 1000000 1000000 4,555,240 170,175 740,000 260,000 6,715,023 0 0
Jordan Kuwait
1200000 200000
1000000 150000 800000
600000 100000
400000 50000 200000 173,000 160,348 1,054,468 1550 358,479 0 0
Visit us at www.digitaltveurope.com 12
p12-13 ME charts MEA17v2st.indd 12 27/10/2017 17:15 Digital TV Europe Middle East & Africa 2017 > The Middle East and its growth prospects November 2017
Lebanon Oman
350000 1500000
300000 1200000 250000
900000 200000
150000 600000
100000
300000 50000 59,375 3,500 343,449 6,000 1,386,500* 3,250 288,550 0 0
Qatar Saudi Arabia
350000 4000000
300000 3500000
250000 3000000
2500000 200000 2000000 150000 1500000 100000 1000000
50000 500000 49,875 67,625 332,438 1,209,000 260,000 99,625 3,542,500 0 0
Syria UAE
800000 1500000
700000
1200000 600000
500000 900000 400000
300000 600000
200000 300000 100000 758,338 275,000 113,000 475,875 1,330,500 0 0
Yemen
2000000
1500000 Key
1000000
Cable DTH DTT IPTV Broadband 500000 Notes: * Q2 gures 1,620,200 174,000 0 Source: Ovum/WBIS
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p12-13 ME charts MEA17v2st.indd 13 27/10/2017 17:15 p14 TiVo DTVE MEA17.indd 1 25/10/2017 14:22 Q&A: Charles Dawes, TiVo
Charles Dawes, senior director, international marketing at TiVo, talks about the emerging need for sophisticated content discovery in the African market.
TiVo is a well-known brand around the world but hasn’t operated in What solutions does TiVo provide that you think would be particularly Africa until now. Tell us more about your plans. relevant for the African market? Yes, TiVo is an extremely well-known brand in the media and TiVo has been active in the market with its discovery products for entertainment space having launched the rst commercially viable many years and this is an area where it can bring a robust o ering to its Digital Video Recorder (DVR) in 1999. The word ‘TiVo’ became customers to help them grow their pay TV businesses across multiple synonymous with recording TV. Since then, the company has continued levels of consumer. to innovate and stay at the forefront of helping consumers discover and From basic DTT (digital terrestrial television) services, to DTH (direct consume their favourite entertainment content. In fact, just this month, to home) services with Push VOD (video on demand), to fully hybrid it launched its new TiVo VOX product range in North America that solutions with integrated OTT (over-the-top) services like Net ix, TiVo combines its latest TiVo Experience 4 user interface with its class-leading has the right level of product to help operators grow their presence in conversational voice-led discovery services. their market. TiVo has a wealth of experience when it comes to deploying TiVo has, in fact, been operating in the Africa market for many years both single market and complex multi-country products that meet the under the Cubiware brand. However, in 2016, the company consolidated needs of operators in the region. all of its brands into the new TiVo to give a clear, consistent message to its customers, as it helps them to deploy the ultimate entertainment To what extent do you think content discovery in general will undergo experience; something that it will be bringing to the African market in a major shift over the next couple of years and what technological due course. innovations will have the greatest impact? Content discovery continues to evolve as we see more and more Many of the emerging digital services in the African market are entertainment choices for the consumer. Around the world access looking at the mobile video opportunity. To what extent does content to content from OTT providers like Net ix has meant that consumers navigation and discovery on mobile devices di er from TV? can face overwhelming choice. Recent TiVo surveys have revealed You’re right, the market dynamics across Africa means many of the how over one third of consumers have stopped watching shows they emerging services are aimed at the mobile sector. In the content love because it became too di cult to nd them (1), as well as how discovery space, the foremost di erence is the screen real estate that is consumers still spend an average of 19 minutes a day looking for available on a mobile device; this means you have to be smarter with content (1), with over 50% of them sometimes getting frustrated with how you display content to the customer. With smaller screens, knowing their experience (2). your customer becomes more important, along with having the ability Technological innovations including the next generation of to implement newer technologies such as content predictions and recommendation and accurate predictions that TiVo is already recommendations. Additionally, voice-based input can help overcome delivering, along with new input methods like Conversational Voice will some of the form factor limitations that exist. mean an improved experience that will lead to more satis ed consumers TiVo’s product set is already mobile ready and can be deployed either enjoying the content they love. as a stand-alone service or in conjunction with a more traditional, set-top box based deployment to deliver a more advanced set of (1) 2016 TiVo Consumer Survey: http://bit.ly/2ySir2C integrated services. (2) Q2-2017 TiVo Quarterly Survey: http://bit.ly/2xp6Bd0
p15 TiVo Q&A MEA17.indd 1 26/10/2017 16:28 Middle East & Africa 2017 > The Middle East and its growth prospects Digital TV Europe November 2017
MENA: the big picture Free-to-air TV has long dominated distribution in the Middle East, and pay TV services have struggled to gain traction outside a few affluent pockets. But analysts predict that a young tech-savvy population and growing broadband penetration will give a fillip to SVOD services, albeit from a small base.
dominance of free-to-air satellite number of Middle East telcos have launched double from the 5.4 million it estimates for The as the primary video distribution IPTV services, notably in the Gulf. However, the end of last year to about 10.4 million by technology has been a constant theme in IPTV penetration overall remains low – held 2022. It also expects Netflix to be the market coverage of the industry of the Middle East and back by the perception that it is costly, by a leader with 3.9 million subscribers by 2022. North Africa for years. However, broadband lack of fixed broadband infrastructure and Pay TV penetration, by comparison, is penetration – and, more specifically, mobile by a general unwillingness to pay for content expected by Ovum to rise only by about 11% broadband – is growing fast in many of the in a region where a large number of free-to- over the next five years, more or less in line countries across the Middle East. As a result, air channels are available and piracy is rife. with the growth in TV households generally. online and mobile video consumption is also Kuwait-based Zain, which does not offer fixed Digital TV Research, meanwhile, predicts a increasing, which has helped fuel the launch services in its home market, has meanwhile more bullish 17.27 million SVOD customers of multiple OTT TV services over the past teamed up with Malaysia-based SVOD service across the MENA region by 2022, up from an couple of years. Iflix to tap into potential demand for OTT TV estimated 3.74 million at the end of last year. However, a note of caution is necessary. offerings. Iflix’s new regional service features Digital TV Research also expects Netflix to be There is in fact still a long way to go before Arabic and English-language TV shows the biggest single player, with 3.26 million the region becomes a broadband powerhouse. and movies, and the company has made paying subscribers by 2022. The research A recent report by Ovum highlighted the fact a commitment to produce its own Arabic outfit predicts that Icflix will have two million that, while investment in broadband in the content. subscribers and Starz play a further 1.6 UAE and Qatar put both countries in its global Iflix’s entry into the region followed that of million. top 10 in terms of their level of development, Middle East SVOD pioneer Starz Play Arabia, overall the Middle East excluding North Africa which forged partnerships with Qatar’s only ranked fifth out of eight world regions Ooredoo and other distributors, and of course SVOD base measured in the analyst group’s Broadband Netflix, which has so far had a limited impact Development Index. in the region in the view of most analysts. Both Ovum and Digital TV Research include Nevertheless, says Ovum, the Middle East as The general preference for free content Turkey in their overall figures for the Middle a whole has a young-skewing and increasingly notwithstanding, broadcasters in the region East, which skews the results considerably, tech-savvy population that is enthusiastic have begun to invest in premium digital however. IHS Markit, by contrast, estimates about consuming content on mobile devices. services. The region’s prime free-to-air pan- that SVOD services will only reach 1.3 million The analyst group cites Google’s revelation Arab broadcaster, MBC, has invested in digital subscribers for the MENA region by the end that Saudi Arabia has the highest use of service Shahid, including a premium option of 2017, with Netflix and Amazon together YouTube per person in the world. featuring shows without commercial breaks accounting for just one fifth of the total, but Ovum estimates that mobile broadband and some premiered content. Leading pay predicts that the overall SVOD base will grow will account for 90% of mobile subscriptions TV provider OSN has meanwhile launched to 4.2 million by 2021. in the region, excluding North Africa, by OSN Play and Go, a multiscreen OTT TV For IHS, low income levels in much of the 2022, while fixed broadband penetration will service that is also available to non-OSN region outside the Gulf, together with low grow relatively slowly, penetrating just over subscribers. In August it also launched Wavo, bank-card penetration, are likely to hinder half of homes in the Middle East in the same a new streaming service with a mix of live the development of SVOD beyond a relatively time frame. and catch-up TV, movies series and a western small elite, even if its predicted compound and Arabic content targeted at young, mobile- annual growth rate of 35% for such services centric consumers. seems impressive. IHS expects that OTT TV service providers While numerous digital services are international players with strong localisation therefore now available, forecasts about the strategies such as Starz Play Arabia, Iflix and These trends account for the rapid growth in growth of OTT TV services vary widely. Viu, and homegrown offerings such as Icflix, interest in the region from OTT TV service Ovum predicts that SVOD subscriptions in Seevii, Wavo and Shahid Plus will contribute providers, including Iflix, Starz and Netflix. A the Middle East, excluding North Africa, will significantly to growth.
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p17 Magine_Wisi DTVE MEA17.indd 1 25/10/2017 14:24 Middle East & Africa 2107 > Focus on MENA Digital TV Europe November 2017
Rebecca Hawkes assesses the changing face of pay TV broadcasting in the MENA region at a time of transition as new OTT TV services enter the fray and political crises disrupt the market. Lines in the sand
operators in the Arabic- 2017, Asian subscription video-on-demand Pay-TV speaking world have service Iflix, backed by western pay-TV giants Gaining ground long aimed to transcend both the dominance Liberty Global and Sky, entered the fray – in of free-to-air TV and the blight of content partnership with Bahrain-based telco Zain. Lionsgate-backed Starz Play Arabia, which piracy. Now, being liberally added to the By the end of this year, research analysts at launched its Hollywood-rich SVOD service in competitive mix is a dose of digital disruption. IHS Markit forecast that MENA’s OTT video April 2015, announced in July it had attracted New sources of online entertainment players will have a combined total of 1.33 million 700,000 paying subscribers – in large part are being lapped up by the growing digital- subscriptions, with the sector accounting for through localising its offering and teaming savvy, youthful population of an increasingly US$80 million ( 68 million) in revenues. up with local telecommunications companies internet-connected Middle East and North Yet, by the end of 2021, these figures will for mobile and IPTV distribution and direct Africa. In the space of just a few years, the have escalated to 4.2 million subscribers and billing. In addition, it has priced its services region’s video-on-demand market has gone standalone revenues of US$360 million. according to the market, at US$7.99 in the from sparse to distinctly crowded. Indeed, the compound annual growth rate Gulf, and US$4.99 in Maghreb countries The first regional over-the-top video players for MENA’s OTT sector will be 35% between such as Morocco. such as Icflix, Istikana and Starz Play Arabia 2016 and 2021, says IHS. The CAGR for the Starz Play’s CEO, Maaz Sheikh says the were joined, in 2016, by US giants Netflix regional pay TV sector during the same period MENA-wide platform is now aiming to and Amazon Prime Video. Then, in April is forecast to be just 6%. finish the year with over a million paying
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p18-22 ME Feature MEA17v4st.indd 18 27/10/2017 17:25 Digital TV Europe Middle East & Africa 2017 > Focus on MENA November 2017
subscribers. “We are holding the leadership in Algeria where the launch of Starz Play with great stories to tell from all over the position in the market now and are on course bundled with Ooredoo Algeria has proved world, including the Middle East”. for this but it’s still a challenging, competitive “very successful”. The platform is now Adding locally produced content to market,” he says. “We have areas that are offering 2,500 hours of Hollywood content in predominantly western fare is a desire shared performing better than expected at this point French, with prime content such as the latest by Starz Play Arabia, which hopes to enter [of service development] such as the number of paid subscriptions, consumption and user engagement. However churn is higher than “We are holding the leadership position in predicted, which is challenging.” Half of Starz Play’s UAE subscriber base the market now and are on course...but it’s also subscribes to Netflix, says Sheikh. “In still a challenging, competitive market.” the UAE Netflix’s premium western content is relevant to the large western expatriate population. However, when you go into North Maaz Sheikh, Starz Play Africa, Netflix’s proposition is not so relevant to the local population,” he says. In North Walking Dead shows airing on the same day the local production market in 2018 with a Africa Netflix is also priced more expensively as the US with French subtitles for Maghreb strong Arabic drama series – both to attract than its competition, with its region-wide viewers. subscribers and bring down the operator’s tiered price tag of between US$7.99 and Diversifying its content further, Starz Play churn rate. US$11.99. has also recently tied-up with YuppFlix to One regional SVOD operator with a Constantinos Papavassilopoulos, senior provide subscribers with 1,500 hours of South head start on local co-productions is Icflix, analyst at IHS Markit, agrees that while the Asian movies. Subtitled in Arabic, the films whose Moroccan film Burn Out, directed US streaming giant remains a threat to the are proving popular with both the large Indian by Noureddine Lakhmari, celebrated its regional players, Netflix is not the leading diaspora and Arab audiences. “Our Bollywood theatrical release on October 11 2017. SVOD service across the whole of MENA. consumption is, as expected, highest in the CEO Carlos Tibi says that Arabic content Netflix itself does not publish regional Gulf but it is also performing well in North has been the “key differentiator” for Icflix, subscription figures. Africa,” says Sheikh. over the past 18 months: “We [also] co- “The price is high for most of the population Netflix, meanwhile, recently unveiled what produced our first Tunisian feature Chbabek living outside the Gulf, and the service is not is expected to be the start of its original Arabic El-Jenna (Borders of Heaven) and launched our yet localised, which is also hampering its content push. In October, it announced first animated TV series Dunia, introducing growth,” explains Papavassilopoulos. “It also development of a stand-up comedy special the first Arabian teen female superhero.” doesn’t have many direct billing agreements with Lebanese comedian and actor Adel In addition, Icflix has produced the original with local mobile telecommunications Karam. Produced by Creative Arab Talent and Arabic social comedy WOH! in Tunisia. operators, like its competitors, and credit card filmed in Beirut’s Casino du Liban, the show Since the Dubai-based MENA-wide SVOD penetration is low in MENA.” will stream to Netflix subscribers worldwide service launched in 2013, it has registered 1.5 Indeed, rival platforms Icflix, Starz Play in 2018. million users, says Tibi, to a service priced – and MBC’s paid streaming service Shahid Given its stated aim ‘to become a leading Plus have been very effective in this area, producer of quality localised content from all securing more than 40 deals between them over the world’, similar announcements from with regional telcos. Netflix currently has Netflix are expected to follow. Netflix’s director an arrangement with Batelco in Bahrain, of technology and corporate communications and Amazon is yet to announce any local EMEA, Yann Lafargue, says that “one of our partnerships. desires in the region is to find a great scripted series for the Middle East and this remains the case”. Shining Stars “With a US$6 billion budget for content production alone this year and US$7 billion Starz Play is hoping to maximise its early- for next year we are actively seeking to expand mover advantage, particularly in North Africa. our Netflix audience base both in MENA and For example, a recently announced strategic around the world through varied content partnership with Orange Egypt will see Starz offerings,” he says. Play now bundled with the mobile operator’s Lafargue adds that in order to do so the 4G service, in what remains a lucrative market company would look to “experienced creators for content providers. CEO Sheikh also points to a growing Content like Moroccan film Burn Out has subscriber base in Jordan, Morocco, and given Icflix a head-start in local production.
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p18-22 ME Feature MEA17v4st.indd 19 27/10/2017 17:25 Middle East & Africa 2107 > Focus on MENA Digital TV Europe November 2017
like Starz Play – at US$7.99 in the Gulf and brands, the competition Iflix says it most fears relevant exclusive content across multiple US$4.99 in the Maghreb. in the region is piracy. Content theft is rife in platforms,” explains CEO Martin Stewart. Tibi adds: “We have taken on board the MENA and although the quality and viewer “Our strategy has been to recalibrate key parts many lessons learnt during the last four years experience is poor, pirates continue to attract of our business to ensure we align with the of operation and have renewed our focus on viewers. “We need to design something that digital era, to ensure we achieve our short and original Arabic content as opposed to the over cannot be replicated. [To be successful] the long-term goals.” priced Hollywood films and series. With this experience must continue to be better and Doing this has meant becoming more strategy, we expect the company to move to more engaging than that offered by pirates,” “customer-centric” Stewart concedes. And profitability within 18 months to two years.” says Sobhan. by improving content delivery options and On top of that, Iflix is placing teams on enlarging its subscriber base, OSN is also the ground to absorb cultural preferences creating more value for the pay-TV platform’s Asian influence and acquire local and regional content that is stakeholders – a key factor in maintaining relevant to each part of the wider region. exclusivity deals with content studios. The most recent SVOD entrant in the “We are a global player with local roots,” “One of the greatest challenges to the MENA market, Iflix, is also looking to local says Sobhan. “We can also apply our success of MENA’s pay TV sector remains and regional content to fuel its success as it experience in Asia, knowing what content penetration, as broadcasters continue to seek expands, from its home base in South East works, for example in the Philippines and to improve both their subscriber and revenue Asia, into emerging markets around the Pakistan, and can apply that to the diaspora market share,” says Stewart. “At OSN we globe. living in MENA.” address this by offering quality content, across Arriving in MENA this year, Iflix is now various platforms, which caters to the diverse available in Kuwait, Saudi, Bahrain, Jordan, demographics in our region.” Iraq, Lebanon, Sudan and Egypt. In the Enduring providers Other than Warner Bros, which is shifting territories where its telco partner Zain its content to rival MENA pay TV platform operates, Iflix is bundled for free with the Although the region’s OTT sector is moving beIN Media, OSN has retained regional mobile service. It is also seeking further telco at pace, it would be wrong to suggest that content deals with the leading Hollywood partnerships in markets such as Egypt where MENA’s established pay TV players are being studios, including Disney, Paramount, HBO, Zain does not operate. pushed out of the picture. Universal and 21st Century Fox. Coupled with Iflix is also offered to consumers direct Indeed, premium pay TV operator OSN, these western jewels, it has been amassing online or as an app, at a monthly price of which was born of the Orbit/Showtime Arabia a treasure trove of Arabic, Pinoy and South US$4 in the Middle East or US$3 in North merger in 2009, has been very active this year. Asian content. Africa. Through aggressive pricing, packaging, and a With attractive content and new flexible “There is no lock-in period as we didn’t revamped and renamed OTT service, it has ways of consuming it, IHS senior analyst want people to be afraid to try Iflix,” says Nader Sobhan, head of Iflix MENA. “Pay TV is still expensive for the mass market. The “There is tremendous opportunity for digital complexity of receiving content also alienates a large number of people from trying it. We content while demand for linear TV is want to democratise content.” growing as customers become more specific The company, which was founded in 2015 by Malaysia’s Catcha Group and Evolution Media about their preferences.” Capital, focuses on markets where, typically, Martin Stewart, OSN pay TV penetration is low, data costs are high, there is little or no credit card penetration, and now, says IHS’s Papavassilopoulos, “stopped Papavassilopoulos believes there are now the need for ultra-compression and watching the bleed of subscribers” witnessed in recent “huge opportunities in North Africa and the content offline is key. This makes MENA well years. Levant for OSN to grow their market share by suited to the service, which has already cut Long considered too expensive for much offering these slimmer subscription packages its teeth in Asia’s developing markets, says of the region’s population, OSN this year with lower pricing”. Sobhan. introduced flexible pricing, with a basic pack Stewart agrees these markets provide “I respect the industry we are in, which of 32 channels starting at US$20 in the Gulf increased opportunities for pay TV operators, provides an amazing choice for the consumer and even less in North Africa. This has also particularly as mobile penetration remains but we’re not just targeting the elite, we are enabled it to better compete with SVOD about 50% in North Africa and the Levant, working in a mobile-first environment. This is services offering slimmer packages of more compared to the 100% 4G penetration rate in not what anyone else [in MENA] has focused affordable content. Saudi Arabia and the UAE. on,” says Sobhan. “Our model works…we OSN’s “transformational strategy… reflects While refusing to disclose subscriber have a data driven approach to content.” the ground realities of a growing population numbers, Stewart confirms both OSN’s Rather than focusing on rival SVOD of young, tech-savvy consumers, seeking linear and digital platforms have recorded
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p18-22 ME Feature MEA17v4st.indd 20 27/10/2017 17:25 Digital TV Europe Middle East & Africa 2017 > Focus on MENA November 2017
“consistent growth” this year. Currently its squeezed as a result of tumbling oil prices and “My estimate is that 2017 is a lost year, with a major markets are Kuwait and Saudi Arabia fiscal consolidation. Then, in June 2017, Saudi drop of 25% of subscribers because of political (home to OSN’s two shareholders KIPCO Arabia, Bahrain, UAE and Egypt severed tensions in the region. We had estimated that and Mawarid Holding), along with the UAE, all diplomatic and economic ties with Arab there would be 5.6 million pay TV subscribers where it is based. neighbour Qatar. in MENA at the end of the year, but this figure The implementation of the new pricing and As a result, the four countries involved have is now revised to 4.2 million,” says the analyst. packaging model has “significantly scaled up banned the reception of Qatar’s Al Jazeera If regional political tensions continue, beIN our subscriber base” and the August launch of Media network and sister pay TV platform Media could experience a 40% drop in its the operator’s revamped OTT service WAVO beIN Media. subscription base, believes Papavassilopoulos. has been “another big win for us this year”, While beIN Media has since been “There has already been a significant says Stewart. reinstated in the UAE, new subscriptions to commercial and financial impact on beIN the pay TV platform remain forbidden and and we could see a lasting affect on its image, existing ones non-renewable in the huge TV particularly among Saudis and Egyptians,” he Political repercussions markets of Saudi Arabia and Egypt, as well as adds. in the smaller Gulf state of Bahrain. OSN may inadvertently benefit from the More broadly, for MENA’s TV sector as a As a result, IHS’s Papavassilopoulos migration of ex-beIN subscribers. However, whole, 2017 has not been as buoyant a year forecasts that “this is the first year since 2010” content pirates also look to gain from Qatar’s as anticipated. where there will be a drop in subscribers to economic isolation. Regional advertising revenues were pay TV services in MENA. Sports fans in countries affected by the
Producing the goods: content creation in MENA
The Arabic production sector has, like many regional industries, faced Commentators await to see the results of regional tie-ups, but none doubt diverse and often severe challenges lately. Syria’s production output has the US streaming giant will produce local content before long. been crippled by war, while currency devaluation had a knock on-effect on OSN, meanwhile, remains committed to the local production industry. operations in Egypt. Production in the Gulf is, however, on the increase, with It has “both strategically and financially invested in the creation and state-of-the-art facilities and talent already present in the UAE. Saudi Arabia facilitation of exclusive quality Arabic content for its customers across the too plans to build a media city by 2023 and traditional media hub Lebanon region,” says CEO Martin Stewart. has once again played host to key free-to-air TV productions in 2017. This year OSN has developed an all-new localised Arabic show called Across the board, more investment is expected in Arabic content from a WWE Wal3ooha for OSN Sports, and is now airing the locally produced less traditional source, thanks to the entrance of SVOD players with deep Qalb Al Adala (Justice), the UAE’s first ever legal drama (below). “We also pockets, such as Netflix, Amazon, and Iflix. exclusively premiered the first Saudi weekly series,Bashar , which features “The local content industry has been developing at a rapid pace over the Saudi actors,” adds Stewart. past three to four years, especially in the Gulf. The free-to-air TV market is Ultimately, investment from the region’s entertainment platforms gives, so strong in MENA that the whole industry has been conditioned by it and “the [local] content makers a platform and opportunity to express their art the type of content it requires. But this will change,” says Maaz Sheikh, and creativity and allow them to grow and exist in the market,” says Iflix CEO, Starz Play Arabia. CEO Carlos Tibi. Another believer in change, Nader Sobhan, CEO of Iflix, says: “The creativity that was there in the Arabic production market has been stifled by the Ramadan model. Arabic production is locked into making drama and comedy series often for that particular period – though the fall in ad revenues has slimmed down some of the big Ramadan productions.” He says Iflix is now looking at producing content in the ‘off-Ramadan’ season, as well as playing with different episode lengths, and with mini- series, and different genres – a break from what has been the regional norm. The SVOD platform, for example, has already acquired horror series Al Rahbus – not a common genre in the history of Arabic productions. Ultimately, Sobhan says: “Local producers are actively embracing us. Producers are always happy when there’s another buyer in the market.” Starz Play has aspirations to enter local content production market too “but the project has to be right; it has to different in the market and to wow our audience,” says CEO Sheikh. Netflix is yet to reveal its full hand, however, it has staged events in the UAE “and got Arabic content providers excited,” says Sheikh.
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p18-22 ME Feature MEA17v4st.indd 21 27/10/2017 17:25 Middle East & Africa 2107 > Focus on MENA Digital TV Europe November 2017
Flying free-to-air: broadcasters look to diversify in tough market
It has not been a smooth year for MENA’s free TV sector, with the erosion in advertising budgets to digital competition proving troublesome for the region’s free-to-air players. “We entered 2017 cautiously optimistic but the year has proved more challenging than we were expecting, in terms of both revenues and content consumption,” says MBC’s official spokesman and group director commercial, PR and CSR, Mazen Hayek. “Home-grown turbulence linked to oil prices, government spending and consumer spending” have all made for a bumpy ride in 2017, he adds. While the company “remains cash-flow positive and the most lucrative, profit-making media group in the Arab world,” Hayek says MBC is now vigorously exploring other commercial avenues to absorb the fall in advertising. Just over a decade ago, advertising provided 90-95% of MBC’s revenues. Now Hayek claims 80% of the broadcaster’s revenues come from advertising and 20% from other sources – including branded content, and increasingly deals with telcos to distribute MBC’s HD channels on various paid mobile, satellite and IPTV platforms. Following the February launch of a dedicated channel for Ooredoo TV the criminal reality of villains who portray themselves as heroes,” he says. subscribers in Qatar, MBC announced a similar distribution partnership As well as generating strong content and a healthier ratio between ad with Etisalat. MBC’s portfolio of 17 HD channels is now available exclusively and non-ad revenues, keeping on top of technology and of the competition in the UAE to subscribers of Etisalat’s E-Vision IPTV platform, and a new posed by the global digital players is now key to MBC’s future success, says joint channel is under development. This is in addition to E-Vision carrying Hayek: “We are not thinking as a TV company anymore… The game is MBC’s subscription video-on-demand (SVOD) service Shahid Plus. practically set vis-á-vis traditional TV players, but now digital competition Shahid Plus has grown “big time” and is now “400 times bigger year-on- is key – Netflix, Facebook, Google, social media. Whoever captures eyeballs year”, says Hayek. MBC is working to improve the interface of this revenue- and ad revenues is a threat. And Facebook and Google capture half of the generating over-the-top product, which is also available to subscribers digital ad market in MENA.” around the world. There is a balance to be struck, nevertheless. “You want to play the In another effort to offset the drop in ad revenues, MBC has also cut business of the future [but ultimately] it is content that matters. As long as production costs, for both its flagship shows and drama series, this year. you have people who want to watch, to consume, then you are relevant,” However, the broadcaster continues to invest in major productions, with he says. another season of Arab Idol aired in 2017. Among its other popular localised MBC is hoping for improvement in the region’s advertising market in formats, production is underway on season 4 ofThe Voice and the second 2018. For example, its renewed partnership with Arabsat, which delivers seasons of Project Runway and Top Chef. MBC’s Pro Sports and HD channels via satellite exclusively from 26° East, Its key Ramadan drama this year, Black Crows, about women in the now allows for more targeted content and advertising divided between terrorist organisation Daesh, was shot in Lebanon and made by MBC’s the Gulf, the Levant and North Africa. This makes the channels a more production company O3. MBC claims it was the most-watched drama in the attractive commercial proposition than when they were carried on just one region during Ramadan and had global recognition. “Next year we will try beam covering the whole of the Arab world. to join forces with top networks around the world to produce compelling Another technological boost will come with the arrival of 5G, which will content to follow this,” says Hayek. boost digital content delivery and help expand bandwidth capacity in the It is an initiative Hayek says is close to his heart. “It is time to be proactive, region. Yet, through lessons learned in 2017, MBC will budget cautiously for for media networks to produce content to show ‘enough is enough’. It is the coming year. “I wouldn’t say 2018 is going to be a period of growth but time to use the power of entertainment to change perceptions and to show hopefully of stability,” says Hayek.
beIN Media ban are now reliant on pirates to In spite of difficulties posed by the year’s for digital content while demand for linear access hugely popular premium content such events – both political and commercial – OSN TV is growing as customers become more as English Premier League football, for which CEO Stewart believes the future of pay TV in specific about their preferences.” beIN holds the exclusive regional rights. MENA remains bright. Ultimately, all those providing Without a resolution to the political turmoil “Although the mobile revolution in MENA entertainment in MENA would agree with in sight, IHS estimates there will be a 16% may be among the fastest in the world, Stewart’s analysis: “The old formula of ‘one drop in the region’s overall pay TV revenues overall broadband infrastructure and digital size fits all’ is not relevant anymore; operators in 2017 from the US$2.5 billion it had forecast readiness is disparate across the region,” says have to provide content that is sought-after to a total of US$2.1 billion. Stewart. “There is tremendous opportunity and relevant to the audience.”
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p18-22 ME Feature MEA17v4st.indd 22 27/10/2017 17:25 þ5ĆĔ͗ ˞˜Η͗GĆĔ COVERING ALL AFRICA
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p23 Arabsat DTVE MEA17.indd 1 25/10/2017 14:18 Middle East & Africa 2017 > Content production in the Middle East Digital TV Europe November 2017
In search of global appeal Middle East content creators at the recent MIPCOM in Cannes argued that producers need to think more internationally and highlighted Netflix’s Narcos as an example of what can be done. Stuart Thomson reports.
of original content Fadi Ismael: producers need to think about Creators in the Middle shows with international appeal. East need to think more internationally, according to a panel of Arabic producers and in the regional market. She highlighted broadcasters at MIPCOM. Netflix’s Narcos Entertainment Experience, a new multi- was cited as an example of a show that was platform user-generated content project, as an culturally specific, but was filmed partly in example. “This will launch in Saudi Arabia, English and had broad international appeal. Egypt and the Emirates.” About 100 channels broadcast Arabic She said there is also a lack of kids content drama, Turkish series localised in Arabic, in the region. She highlighted Red Band formats and entertainment programmers Society, a teen drama about a kid in a coma, across the MENA region. However, Talal which she has bought the rights for. Adnan Awamleh, CEO of Jordan’s Arab Other Arab Format Labs projects include: Telemedia Group, said that, in reality, few one taking Spanish prison drama Locked Up channels in the region could support and fund (Vis a Vis) to create a series based on real big dramas. “We have to start thinking globally comedy show Selfie, hard-hitting Daesh stories from Guantanamo Bay; docu-series and more internationally. The market is really drama Black Crows and Lebanese drama Al I am a Muslim, about the views of artists, based on five to eight channels. Previously the Hayba as recent scripted shows that had made scientists and other creative people about costs [of producing drama] were lower. Now, an impact in the region. Ismail said that “the Islam; Safari: the Empty Quarter, a search for with the political instability in the region, ascendancy of pan-Arab drama” was shown ‘the Altantis of the Sands’ in Saudi Arabia’s broadcasters can’t figure out what should be by the exceptionally high ratings for shows Empty quarter; Let’s build!, a format promoting produced, and TV productions need forward like Black Crows and Al Hayba. social responsibility and engagement where planning. What we propose is to bridge the He said that advertising remains key to 50 volunteers make over the facilities of world of finance and production, creating financing content and the region is too small schools and clinics in rural areas across the some funding mechanisms and choosing to grow its high-quality output. The answer, region; Parenthood, a new Saudi-Gulf comedy stories that can fly outside the Middle East for he said, is to think about the international drama following the lives of a multi-ethnic more international audiences,” he said. appeal of shows. “We don’t need anything family; and The Cage, a football talent format Talal said that Arab Telemedia is trying [extra] to create content that can travel,” he from Saudi Arabia. to create hybrid language productions in said, in terms of the quality of stories and the Amalia Martinez de Vlasco, SVP, Arabic and English if the story can support types of drama series being created. entertainment brands, southern and eastern it. He highlighted Narcos as a template. “Our Joseph Husseini, head of channels, MTV Europe, Africa and the Middle East, Viacom mission is to find relevant stories. To do this Lebanon, highlighted Al Hayba as a show International Media Networks, highlighted you need higher standards and more detailed that could have international appeal. “Narcos Comedy Central, launched in the Middle development of the storylines and more has succeeded worldwide. It is a story based East a year ago in partnership with OSN. international talent. You also need different in Colombia. Al Hayba is like Narcos but with She said the channel had produced Comedy distribution and marketing mechanisms.” a Lebanese subject,” he said, adding that the Central Presents, a standup series launched in Talal said that there is a need for better show had huge ratings even in traditionally February this year. Comedy Central is working partnerships between broadcasters and non primtetime slots. Husseini said that with comedians to help them perfect their acts producers to create a streamlining of Lebanon is “a little bit different from the through workshops in Amman, Beirut and production. “We are not moving as fast as Middle East” in that dramas could premiere Cairo. “In the coming seasons we will tape we should be,” he said. “We can see shows all year round, not just during Ramadan. approximately 70 comedians, including some coming out of the States and Europe more Khulud Abu Homos, CEO, Arab Format women,” she said. Other local versions of TV strongly than ever. We need to do things in a Labs, said that innovation in formats could formats include Ridiculousness and a popular better way.” stimulate content creation. The Saudi Arabia- web series, Bad Snappers. Fadi Ismail, MBC group director of drama based company’s analysis of the market Martinez de Vlasco said she also wants to and general manager, 03 Productions, cited matches up international formats with gaps give local talent international exposure.
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