Untapped demand for local, Arabic content will spur rapid regional media growth over the next five years, according to a new study unveiled at the Abu Dhabi Media Summit.
The joint study, undertaken by management consultancy Strategy& and Media Zone Authority Abu Dhabi, twofour54, also found that accelerated adoption of mobile technology, evolutions in paid and digital media, and a new wave of unique youth-produced content will be key factors in driving media growth in the region.
Noura Al Kaabi, CEO of Media Zone Authority Abu Dhabi, twofour54, said: “The Middle East and North Africa (MENA) media industry is undergoing a fascinating transformation. Cultural shifts among the region’s young people have spawned a tremendous creative energy, changing the way media is both consumed and created.”
“The MENA media market’s evolution is encouraging regional players to revisit their business models and explore investments in high-quality local content. With MENA one of the strongest opportunities for media industry growth, these findings should encourage global players to re-evaluate their presence in our region,” she added.
The study looks in-depth at three key media sectors in the region: gaming, audio-visual content, and e-commerce.
The audio-visual content market in MENA is seeing many trends that could significantly change the industry. The most notable of these is the transition to paid media. Pay TV is forecast to grow at 10.3 per cent per year, compared to ad-based TV’s 7.8 per cent. Satellite TV continues to dominate the sector, accounting for more than 95 per cent of TV distribution.
The study predicts significant growth in digital delivery of audio-visual content, driven by the emergence of youth-produced content and proliferation of new distribution platforms such as IPTV and over-the-top (OTT) sites. For example, EyshElly, a programme created by UTURN Entertainment, set up in 2010 by three Saudi university students, received approximately 2.2 million subscribers and 245 million views on YouTube.
E-commerce will be a critical source of digital growth. The MENA e-commerce market was worth $2.3 billion in 2014 and is expected to grow 13 per cent annually to 2019. Saudi Arabia and the UAE are the dominant markets, and will continue to make up almost 40 per cent of the total market to 2020.
Drivers of growth in e-commerce are similar to those in other digital segments: faster connectivity, improved supply landscape and the ubiquity of smartphones. Mobile capabilities are increasingly important – mobile commerce is expected to reach 20 per cent of e-commerce revenue in 2015, up from 7 per cent in 2011.
Increasing numbers of young people are contributing to e-commerce revenues. Forty per cent of internet users aged between 15 and 35 made an online purchase in 2012, compared with 22 per cent of users aged between 49 and 65.
“Although media cities like twofour54 do offer access to advantageous financing, the MENA region still lacks the structured access to financing that developed markets can boast. The availability of more funding is critical to enable the industry to meet the skyrocketing demand for local content,” concluded Al Kaabi.
This story also appears on IBC’s Content Everywhere.