The OTT media market in the Middle East and North Africa: emerging players and operator strategies

Transcription

1 Research Report The OTT media market in the Middle East and North Africa: emerging players and operator strategies August 2013 Karim Yaici

2 2 Contents Slide no. 5. About this report 6. Executive summary 7. Operators must position themselves to capture the growing OTT media opportunity as smartphone and broadband adoption grow in MENA 8. The absence of international players, and changing consumption trends, are favouring the emergence of local OTT media players in MENA 9. Recommendations 10. Recommendations for mobile operators considering the launch of an OTT music offering 11. Recommendations for fixed operators considering the launch of an OTT video offering 12. Recommendations for OTT content and media players 13. OTT media market overview and value chain 14. The focus of the OTT video market has shifted from the PC to the TV in developed markets, and this trend has only started to emerge in MENA 15. Strategic approaches to OTT: operators should use their core capabilities to determine how to position themselves in the OTT media market 16. MENA operators have limited OTT offerings, but regional start-ups offer alternative media consumption experiences online and via mobile devices 17. OTT video could substitute for pay-tv services, which have been dominated by satellite broadcasters and, to lesser extent, IPTV providers 18. In MENA s mobile music market, partnerships with OTT players can strengthen operator positioning and offer alternatives to illegal downloads 19. Market context: so far, local players have been more successful in capturing the OTT opportunity than international OTT players Slide no. 20. Market context: the challenge of piracy is significant in MENA, which hampers monetisation of OTT content 21. OTT video services and strategies in MENA 22. Mobile is a key driver for OTT video demand: our mobile Internet survey found that more than 60% of respondents watched video on their handset 23. Smartphones clearly drive video usage and OTT take-up: smartphone users are far likelier than feature phone users to watch mobile video daily 24. Operators can be enablers/distributors in the OTT video market, but must prepare their infrastructure for the increased demands of these services 25. On the service supply side, the OTT video market is burgeoning in MENA, but partnerships with operators or vendors are still rare 26. Emerging regional video OTT players are providing ad-supported content, but players will need to adopt new monetisation models to sustain growth 27. Broadcasting and pay-tv companies in MENA are investing in the OTT space, taking advantage of the absence of international OTT players 28. Fixed operators in MENA have launched multi-screen video services to complement their broadband or IPTV service offerings 29. OTT video case studies: Etisalat (UAE) and STC (Saudi Arabia) 30. OTT video case studies: icflix (UAE) 31. OTT music services and strategies in MENA 32. Mobile is also a key driver of demand for OTT music: more than 40% of mobile Internet users in our survey use music on their phones

3 3 Contents Slide no. 33. Despite the clear demand for mobile music in MENA, market players are still working out how to monetise content in the face of widespread piracy 34. MENA has only a few examples of operator-run music portals and they offer limited choice 35. Local OTT players are revitalising their music offerings by switching from download to streaming services 36. OTT music case studies: Anghami (Lebanon) 37. OTT music case studies: Yala Music (various countries) 38. About the author and Analysys Mason 39. About the author 40. About Analysys Mason 41. Research from Analysys Mason 42. Consulting from Analysys Mason

4 4 List of figures Figure 1: Major companies discussed in this report Figure 2: Smartphones share of mobile handset connections, Middle East and North Africa, Figure 3: Fixed broadband connections, and DSL and fibre s share of connections, Middle East and North Africa, Figure 4: Changing focus of the OTT video market Figure 5: Operators core capabilities and their benefits to OTT players Figure 6: Principal paths for video consumption in the Middle East and North Africa Figure 7: Channels to access full music tracks for consumers in the Middle East and North Africa Figure 8: Respondents who use video on their phones, Egypt, Saudi Arabia and the UAE Figure 9: Mobile video usage by content type, Egypt, Saudi Arabia and the UAE Figure 10: Reported use of video on mobile phones within the past 3 months, by handset type, Egypt, Saudi Arabia and the UAE Figure 11: Smartphones share of mobile handset connections, Middle East and North Africa, Figure 12: Fixed broadband connections, and DSL and fibre s share of connections, Middle East and North Africa, Figure 13: Examples of OTT video streaming services, Middle East and North Africa Figure 14: Examples of OTT video services supported by media companies, Middle East and North Africa Figure 15: Operators multi-screen and OTT video offering in the Middle East and North Africa Figure 16: Respondents who use music on their phones, Egypt, Saudi Arabia and the UAE Figure 17: Reported use of music on mobile phones within the past 3 months, by handset type, Egypt, Saudi Arabia and the UAE Figure 18: Examples of operators music streaming or download portals, Middle East and North Africa Figure 19: Examples of OTT music players, Middle East and North Africa

5 5 About this report This report analyses the key trends in, and drivers and inhibitors of, the over-the-top (OTT) media market in the Middle East and North Africa (MENA), focusing on two segments. Video services: These include video content distributed over the operator s infrastructure with an unmanaged infrastructure (unlike IPTV). Content can be consumed on mobile devices, desktop computers or TVs. Music services: These include digital music streaming and download services. Most of the music consumed in the region is pirated, but new companies have recently emerged to provide legal music streaming and download services. The report also provides recommendations for fixed and mobile operators, and content players in the region. Figure 1 gives an overview of some of the companies discussed. This report is based on several sources: Analysys Mason s internal research interviews of stakeholders in the MENA market our survey of 2000 feature phone and smartphone users conducted between November 2012 and January 2013 in Egypt, Saudi Arabia and UAE. 1 Figure 1: Major companies discussed in this report [Source: Analysys Mason, 2013] Market Bahrain Egypt International Jordan Pan-Middle East Saudi Arabia UAE Major companies discussed Video Active Digital Development, LINKdotNET, TE Data Google (YouTube), Netflix, Dailymotion d1g, iaraby, Istikana, TootCorp Aljazeera Satellite Network, icflix, MBC, Sky News Arabia STC Abu Dhabi Media, EITC (du), Etisalat, OSN Note: Case studies are provided for players highlighted in bold. Music Batelco Apple, Blogmusik (Deezer) Umniah Anghami, Hewlett-Packard (HP), Music Master, Ooredoo, UrFilez, Wataniya Telecom, Yala Music 1 For further details, see Mobile Internet Survey in the Middle East and Africa 2013: OTT services and mobile money usage. Available at

6 15 Strategic approaches to OTT: operators should use their core capabilities to determine how to position themselves in the OTT media market Fixed and mobile operators have several assets that they could use in a partnership with an OTT media player. Operators could decide to limit access to OTT media completely, but we believe that they should instead adopt a more-constructive approach through partnerships with OTT players. Operators could play a significant role in this emerging content market by offering a new distribution channel and facilities for monetisation, such as integrated billing. They could also profit from OTT video by monetising the additional bandwidth that consumers use, but should offer additional data capacity at a reasonable cost and avoid the temptation to impose excessive charges. At the same time, OTT players would be able to provide fresh content to mobile subscribers, and create opportunities to improve the value of operators data offerings through media bundling. Figure 5: Operators core capabilities and their benefits to OTT players [Source: Analysys Mason, 2013] Operator capability Benefits to OTT players Provide connectivity Provides a distribution channel for their services. Marketing and reach Uses traditional sales and marketing channels to promote media content for example, by launching SMS campaigns, placing advertisements in their application stores and positioning content at the top of their portals. Billing relationship with customers Facilitates payments for premium content via means such as integrated billing, in a region where a high proportion of the population is unbanked. Ability to control quality of experience Operators have the ability to offer an enhanced user experience and enable end-to-end control of content management, delivery and quality of service.

7 38 Executive summary Recommendations OTT media market overview and value chain OTT video services and strategies in MENA OTT music services and strategies in MENA About the author and Analysys Mason

8 39 About the author Karim Yaici (Analyst) works on Analysys Mason s The Middle East and Africa regional research programme. His primary areas of specialisation include mobile operators VAS strategies in developing markets, and the adoption of IP Multimedia Subsystem (IMS) services and mobile devices. Prior to joining Analysys Mason, Karim was an associate analyst at Informa Telecoms & Media, where he authored reports on mobile accessories and mobile applications. Prior to that, he worked as a research engineer in the Centre for Communication Systems Research (CCSR) and Vodafone. Karim holds an MSc in Information Systems Management from the University of Southampton and a PhD in human computer interaction from the University of Surrey.

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