In Broadcast - CABSAT 2018 - 3

www.inbroadcast.com | CABSAT InShow Guide | 14 - 16 January 2018

What's the State of Play in MENA?
The Middle East and North Africa broadcast
market is one that is in transition,
says IABM Lead Research Analyst
Lorenzo Zanni...

CABSAT marks 24 years

ABM, the international trade
association for suppliers of
broadcast and media technology,
has recently published a business
intelligence update on the Middle East
and North Africa (MENA) region to
keep our members up to speed with
what's going on in this diverse market,
so they can get the most out of the
CABSAT show. Here's a taster of its
findings; IABM members can read the
full report on the IABM website.
A diverse market in transition
MENA is a diverse region made up of
countries at varying levels of economic
development. While GCC states boast
living standards comparable with
those of North America and Europe,
other countries in this region are less
developed. This diversity translates
into different levels of broadcast and
media development. While the Middle
East is already home to some UHD
offerings, North African broadcasters
remain focused on long-standing
technology transitions such as the
upgrade to digital broadcasting.
Piracy - doing the right thing
Despite these differences, piracy
remains a common issue for both the
Middle East and North Africa, with the
cost estimated to be about US$750m
by IDC. According to a recent survey
carried out by Irdeto, more than half
of the residents in MENA admitted
to watching pirated content, with
millennials being more inclined to do
so - under-24-year-olds represent
about 50% of the population in this
region. It is therefore no surprise that
media companies have been adopting
initiatives and technologies to counter
piracy and better monetise their
investment in content.
OSN has launched a Do the Right
Thing campaign against piracy and
has been one of the advocates of the

Updated: IABM business intelligence

Anti-Piracy Coalition, a task force of
broadcasters, content owners and
satellite operators. beIN has adopted
various
anti-piracy
technologies
including a live watermarking service
which protects its OTT content by
shutting down subscriber accounts
that are stealing and retransmitting
the feeds.
Declining oil revenues
Although the high piracy rates in
the region have prompted local media
companies to boost their investment
in anti-piracy technologies, general
media technology spending in the
Middle East and North Africa has been
negatively affected by the decline
in oil prices, another common issue
in this territory - 80% of its GDP is
generated by oil-exporting countries.
In this region, and in particular the
Middle East, most media companies
are either state-owned or backed
by private companies reliant on oil
revenues. The fall in oil prices has
caused a decline in their revenues
and a consequent cut in broadcast
and media technology spending;
notably, Al Jazeera, a state-funded
broadcaster, has cut about 500 jobs
(10% of its workforce) worldwide in
2016.
Despite the recent cuts in world oil
production, analysts have forecast
that oil prices will remain around the
US$50 to US$60 mark, way below the
levels observed before their collapse
in 2015. Therefore, while most
governments strive to diversify their

budgets away from oil revenues, local
media companies should continue to
drive efficiencies in their operations
in the foreseeable future to remain
competitive.
Political tensions have contributed
to worsen this picture. Aside from the
ongoing political upheaval in some
North African countries, the recent
Qatar-Gulf crisis has had an impact on
some major broadcasters that operate
in the Middle East - BeIN sports
channels were blocked in the UAE for
six weeks in June before authorities
reinstated them.
Transition to digital and HD
As mentioned earlier, a large share
of technology spending in the region is
still driven by the transition to digital
and HD, particularly in less developed
North African countries. Only Saudi
Arabia, the UAE and Morocco have
completed their transitions to digital
broadcasting with the rest of the
region still investing in technologies
to enable the upgrade to digital
operations.
Increased HD channel growth
has been driven by the expansion
of satellite, which is the dominant
transmission technology in the region.
Recent research shows that both
the number of HD channels and HD
equipment penetration have grown
significantly in recent years, with
GCC countries showing greater than
average HD adoption due to their
higher level of disposable incomes.
However, HD remains a differentiator

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Publisher
Phillip Izzard
phillip@inbroadcast.com

Editor
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steven@inbroadcast.com

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Business Development
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relied on by Pay-TV operators to
attract new subscribers.
The adoption of UHD in the
Middle East and Africa region has
been limited to some rare cases
so far. These include major Pay-TV
broadcasters in the Middle East and
North Africa looking to have a further
competitive edge over their rivals.
OSN and BeIN have been particularly
active in this area with a number of
initiatives launched between 2016
and 2017. For example, BeIN has
covered some sports events in 4K -
sports content is highly popular in this
region.
Pay-TV and OTT rise
Free-to-air
linear
television
remains largely dominant in the
region - making advertising the most
widespread business model - although
Pay-TV penetration has been slowly
rising in recent years, particularly in
the GCC states where it now reaches
about 60% of the population. OTT has
been growing significantly in recent
years although its penetration is still
at low levels due to constraints such
as poor broadband and payment
infrastructure.
As mentioned earlier, piracy
also remains a major challenge for
both Pay-TV and OTT operators in
the region, which should continue
with their efforts to tackle it. In
this challenge, lies an opportunity,
particularly for OTT players, to convert
the younger, mobile-first audiences to
legal streaming.
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