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The streaming war is inevitable! Like all other parts of the world, in MENA the number of SVOD OTT players is growing. Regional OTTs have managed creating a big success story so far in leading the battle of subscriber share over their international counterparts, and enjoyed a phenomenal increase in their number of subs, accelerated as of 2020 by the pandemic: We have seen subscribers more than doubling for Starzplay and Shahid VIP , 2020 was also marked by the strategic decision of the regional pay TV OSN to launch their SVOD service with OSN streaming app. SVOD MENA subscribers across 13 Arabic countries (covering GCC, Levant and North Africa) grew by 77% YoY and revenue by 55% YoY in 2020 to reach $350M, with Saudi Arabia and UAE capturing nearly 60% of total subscriptions. This could be only the beginning as the Arab market potential is huge and is expected to grow at CAGR of 12% by 2026, reaching 15 million subscribers up from 8.61M forecasted in 2021. Current Strategy The growth strategy deployed by regional SVOD players in the last 2 years has been revolving commonly around an aggressive subscribers’ acquisition strategy across 3 main pillars: 1- Customer price affordability vs leading international players; 2- Telco partnerships across different market of the region with hard bundling; and 3- an Increased investment in premium local and global content, and an early humble original production. Competition will further intensify as more regional and international OTT video platforms are expected to enter the market with more variety of choice to customers, but also more market fragmentation, making a streaming war inevitable in the region. Situation in the MENA Region
Emerging Challenge This aggressive market penetration strategy is coming with an increasing threat. Indeed, High acquisition cost and low customer lifetime value in a landscape dominated by little content differentiation and brand loyalty will further dilute the market. That said, looking for different business models and new strategic levers has become the primary challenge to be able to monetize content and develop a long- term path for healthy growth. SVOD companies in the region should make the above challenges their first consideration while developing a long-term strategy for healthy growth What is clear is that direct relationship with customers is a global opportunity and streaming is slowly dominating video viewing across the region; However, is the mere fact of going directly to consumers and launching its own branded OTT platform with an acquired general content enough for competing in the fragmented market?
Figure 2: Forecast 15M SVOD Subs by 2026 in the Arab World
Figure 3: Regional Players leading in SVOD Market Share
*MENA region covered: 13 Arabic countries in Levant, GCC and North Africa
2020 Growth R evenues: 55% YoY Subscrption: 77% YoY
OTT Video Success Path in MENA: How can SVOD be more relevant and create long-term value
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