IBC
TV is widely recognised as a high growth prospect in MENA but monetisation of pay TV and free to air commercial channels remains a major issue. http://www.ibcce.org/page.cfm/action=library/libID=14/libEntryID=385/listID=2
Remedial recommendations include improved cooperation between media regulators and telco operators, increased and better quality local content and a reliable pan-Arabic measurement system. Wider implementation of digital terrestrial TV (DTT) was also argued for during IBC2015 session ‘MENA Broadcasting & Digital Media: The road ahead,’ as was greater competition for premium rights in order to create a more functioning market.
“The TV industry is in a bit of chaos,” said Dr Riyadh Najm, the former head of Saudi Arabia’s state media authority. “Cooperation between telecom regulators and media regulators is poor. We do not have a transparent or reliable audience measure for viewers and listeners in the region. In addition, public broadcasters do not have attractive programming.”
MENA is one of the world's fastest growing regions in terms of the number of TV households, expected to grow at CAGR of 3% between 2011-2017, reaching over 53 million households by 2017, according to Deloitte.
However the ad market there has stalled. “The global TV ad market is growing in almost all regions except for Western Europe and MENA,” reported Santino Saguto, Partner - Consulting and TMT Industry Leader for the Middle East at Deloitte. There was actually a decline in media spend in MENA from USD $2587 million in 2010 to $2323 million in 2014.
“The average ad spend per person is $20 which is significantly lower than other countries,” explained Saguto. “This is related to the lack of regulation, to limited local content and to an oligopoly of advertising agencies in some countries which control the market. For all these reasons we can say that there is plenty which can be done in terms of increasing the overall size of the industry in the region.”
TV ad spend as a proportion of total media spend in MENA is among the highest globally, contributing 53% in 2014 (in Western Europe by contrast the figure is 29.1% where digital is higher). In MENA, digital represents only 10% of ad revenue.
Pay TV has long been a hot topic of debate, noted Saguto. “Why is pay TV value so much lower than the rest of world? Premium sport is the main driver for pay TV growth, however the cost for sports rights compared to their consumer affordability in the region - where only an estimated 10 million households can actually afford premium pay TV - makes it hard to find a business model to make pay TV work commercially.”
Al Jazeera's BeIN Sport (bankrolled by the Qatari government) is the MENA leader in sport pay TV, able to acquire high value premium rights but still failing to attract the level of monetisation in return. “It is much lower than international standards,” said Saguto. “Additional competition from traditional TV or from industry consolidation going after premium sports rights could help the growth of the industry.”
Dr Najm added that many consumers in the region are being “prevented from viewing sports they are interested in” because the rights are behind a pay wall. He argued that DTT should be encouraged to flourish.
Many Middle Eastern nations are still transmitting analogue TV, while those few which have adopted DTT (Saudi Arabia, Algeria, Tunisia, Bahrain, Kuwait) are transmitting channels and programming “which nobody is watching,” said Najm.
He called for more DTT channels to be carried, “and with programming that doesn’t replace satellite but which gives our nations the chance to obtain broadcast rights on a country-by-country basis. He said, “I'm not saying DTT can replace satellite, which has a 95% penetration in MENA, but DTT can capture a good part of the growing TV audience. DTT is vital as the best way to address the public, and to preserve national identity and heritage.”
DTT is crucial for the Gulf states, Dr Najm said. “I really believe there is room for DTT despite the huge number of satellite channels on air. Broadcasters are not making use of the spectrum that is allocated to them, while regulation of DTH transmissions is extremely difficult for individual countries.”
Dr Najm is also a former president of the Arab States Broadcasting Union, but said ASBU could not act as the region’s content regulator. He explained that five countries do exercise some control over broadcast media (Morocco, Saudi Arabia, Tunisia, Jordan and the UAE) but that more regulation is needed.
“In most countries, different government bodies regulate the media. The prevalence of DTH also makes it tricky to regulate, since audiences for services will often be in a different country to the broadcast company's HQ.
“We have about 1,300 TV channels on satellite, 12% of those are public TV, and too many of them are controlled by or heavily influenced by special interest groups. This has led to chaos in the region as far as broadcast regulation is concerned.”
DTT is crucial for the Gulf states, Dr Najm said. “I really believe there is room for DTT despite the huge number of satellite channels on air. Broadcasters are not making use of the spectrum that is allocated to them, while regulation of DTH transmissions is extremely difficult for individual countries.”
Dr Najm is also a former president of the Arab States Broadcasting Union, but said ASBU could not act as the region’s content regulator. He explained that five countries do exercise some control over broadcast media (Morocco, Saudi Arabia, Tunisia, Jordan and the UAE) but that more regulation is needed.
“In most countries, different government bodies regulate the media. The prevalence of DTH also makes it tricky to regulate, since audiences for services will often be in a different country to the broadcast company's HQ.
“We have about 1,300 TV channels on satellite, 12% of those are public TV, and too many of them are controlled by or heavily influenced by special interest groups. This has led to chaos in the region as far as broadcast regulation is concerned.”
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