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Growth in Pay TV and OTT Video Services Paving Way for Hybrid … · 2017-04-05 · Entry of new OTT platforms like Netflix and Amazon Prime Instant Video will garner stiff competition

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Page 1: Growth in Pay TV and OTT Video Services Paving Way for Hybrid … · 2017-04-05 · Entry of new OTT platforms like Netflix and Amazon Prime Instant Video will garner stiff competition

1

Growth in Pay TV and OTT Video Services

Paving Way for Hybrid TV Viewing

Produced by Conference Knowledge Partner

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2

Table of Contents

CONTENTS PAGE CONTENTS PAGE

KEY FINDINGS

TV MARKET ECOSYSTEM

PAY TV MARKET OVERVIEW

OTT VIDEO SERVICES

3

4

5

20

34 TECHNOLOGY TRENDS IN

BROADCAST INDUSTRY

REGIONAL TRENDS FOR

TECHNOLOGY INVESTMENTS

THE LAST WORD

53

58

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3

Key Findings

The mobile revolution in MENA is among the fastest in the world. Penetration of smartphones has crossed 75% in

markets like UAE and KSA. Yet, overall broadband infrastructure and digital readiness is disparate across the region, with

only 50% of population in Egypt, Lebanon, Algeria having mobile connections against 100% penetration in KSA and UAE.

Hence uptake of OTT and IPTV services is restricted to clusters within the region.

Demand for live sports coverage is one of the driving forces for growth of OTT, IPTV and Pay TV services. The regional

addiction to national and international football is popularizing subscriptions; OTT consumption is quick, convenient and

enables on-the-go live streaming.

The Pay TV market in MENA is expected to have a linear growth till 2020 despite a significant churn from two of the

leading incumbents in the region- Al Majd and OSN. Since its foray into general entertainment, beIN MENA is positioned

strategically for a substantial rise in market share. Further, there will be disruptions in the market with the launch of a new

service in the region.

Entry of new OTT platforms like Netflix and Amazon Prime Instant Video will garner stiff competition among local

participants like STARZ Play, OSN GO, beIN Sports Connect, Shahid, Telly, Istikana, Icflix in an emerging market

landscape. A rich content repository, competitive pricing strategy, compelling user interface will determine the key market

stakeholders.

The MENA Internet Protocol TV(IPTV) market is growing in United Arab Emirates (UAE), Kingdom of Saudi Arabia (KSA),

Qatar, Oman and Kuwait, in terms of installations as it is bundled with high speed fiber broadband connectivity. However,

the active usage fluctuates across the region. IPTV market has gained traction in UAE and Qatar and is expected to grow

at a faster rate in Oman, KSA and Kuwait later over the forecast period.

Source: Frost & Sullivan

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4

TV Market Ecosystem

Source:Frost & Sullivan

DTH Pay TV Broadcasters Satellite Operators Pure OTT IPTV

MBC SHAHID

OSN GO

ICFLIX

ISTIKANA

BEIN SPORTS CONNECT

TELLY

STARZ PLAY

Broadcasters and local pay television participants leverage their footprint in the market to introduce OTT services to their existing

customer base. They have a competitive advantage over new participants due to availability of rich content and infrastructure at their

disposal. With regional expertise over the market, serving predominantly Arabic content, they position themselves strategically against

global participants with such titles. Since OTT services are the future of TV, it is increasingly vital for the industry to deliver on-demand

video alongside linear services.

OSN

beIN SPORTS

ABU DHABI MEDIA MY-HD

AL MAJD NETWORK

MBC

ROTANA

NILE TV

DUBAI TELEVISION

ART

AL JAZEERA

ARABSAT

NILESAT

ES‟HAILSAT

EUTELSAT

DU

ETISALAT

OOREDOO MOBILY

STC

SELEVISION

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5 5

Pay TV Market Overview

Hamad Malik, Head of Marketing at beIN Media: “Pricing is the major lever to attract

subscribers; bundling and co-marketing will help improve awareness. The biggest

challenge in the Pay TV market is piracy - spill over of online piracy along with IPTV

decoders and illegal set top boxes. Penetration of Pay TV is still in its nascent stage; it has

a lot of scope but needs to be priced properly. The strategy for Pay TV operators to move

forward is to focus not only on the number of channels and content people are familiar

with, but also content people want to watch, which is not available on free-to-air channels.”

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6

Key Trends

1 Since the Pay TV penetration is low in MENA, Pay TV operators are leaving no stone

unturned to improve both subscriber and revenue market share by offering quality content

on various platforms. But monetizing content is still a major challenge.

2

In order to monetize content some of the international channels, for instance from Fox

International (National Geographic), Discovery moved from FTA to Pay TV category in

2016. Encrypting some of the FTA channels and gradually moving them to the paid

category is a strategy actively deployed by key industry participants.

3

Satellite Pay TV operators have opted for all modes to reach the end consumers. From dealers to

online usage for subscription and from cash to card for payment; all the methods are pursued to

avoid any hassles in opting for Pay TV services. Some cards of Pay TV operators are receiver

agnostic and the subscribers have the option of changing and/or using multiple Pay TV services.

4 Genres such as children's content as well as expat content categories are still underserved in

FTA. Pay TV service providers attempt to bridge the gap by offering exclusive content for these

categories- such as OSN (for South Asians) and My-HD (with content for Filipinos)

Source: Frost & Sullivan

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7

Major Market Participants

Source: Logos from Company Websites and Frost & Sullivan

TOTAL Pay TV MARKET: MAJOR MARKET PARTICIPANTS, MENA, 2016

The major satellite Pay TV operators have been listed below.

Though the penetration of Pay TV is still low in MENA, all of

these Pay TV operators are trying to gain market share in

more than one country through their content, marketing and

pricing strategies.

Though fiber broadband is just 9% of the total fixed broadband

subscribers in MENA, IPTV is being bundled with high speed

fiber based fixed broadband services as a value add by all

telecom operators deploying fiber in the region.

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8

Satellite Pay TV Operators: Major Initiatives

SATELLITE Pay TV (DTH) MARKET: MAJOR INITIATIVES, MENA, 2016

HD Content Improve

Features in STBs

Regional Pricing

Partnership with Foreign Language Content

Providers

Partnership with

International Content

providers

Rights for International and Regional Sports and Movie Titles

Encourage Local

Production to Improve

Arabic Library

Establishment on all Video

Viewing Platforms

(OTT/IPTV)

The major initiative that the satellite Pay TV operators in MENA are taking revolve

around establishing themselves across all genres, countries and ethnic groups.

• The initiatives in the adjacent exhibit are regarded as the most

important to reach the underserved market and also improve the

subscriber numbers.

• HD content is one of the major activities that broadcasters are

concentrating on and satellite Pay TV operators have been leveraging

this trend by including ten to fifteen HD channels per quarter in the last

one year.

• Also, partnerships with major content networks will be important to

sustain their portfolios. For instance, beIN in order to expand its

entertainment portfolio acquired Miramax, and signed up with Fox International for exclusive Hollywood content.

• OSN has applied for a loan in order to improve the content and

technology aspects.

• Similarly, in order to attract the Filipino and Asian consumers; satellite

Pay TV operators like My-HD and OSN have developed packages.

Source: Frost & Sullivan

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9

Satellite Pay TV Index : GCC leads; Egypt offers opportunity

Source: Frost & Sullivan

SATELLITE Pay TV (DTH) MARKET: Pay TV INDEX, MENA, 2016

0

1

2

3

4

5

6

0 5000 10000 15000 20000 25000

Egypt

Kingdom of

Saudi Arabia

(KSA)

United Arab

Emirates

(UAE) Qatar

Kuwait

Mauritania

Morocco

Algeria Libya Tunisia

Sudan

South

Sudan

Djibouti

Eretria Ethiopia

Jordan Lebanon

Iraq

Bahrain

Oman

Yemen

Israel

Syria

West

Bank and

Gaza

Pay TV services can gain traction in these countries due to the

higher propensity to pay, presence of proper regulations and

expat population

With the highest number of TV

households in the region, Egypt

offers a great opportunity for Pay

TV operators.

Note : Pay TV index was calculated considering the

Gross Domestic Product(GDP) per capita adjusted for

purchasing power parity (PPP), political situation,

regulatory situation, TV digitization and expat

population.

Pay TV Index

Number of TV Households (in Thousands)

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10

Competitive Analysis—Market Share

Source: Frost & Sullivan

THE PAY TV SERVICES MARKET IS RESTRAINED IN GROWTH FOR MAJORITY OF THE VENDORS AS

THEY TRY TO FIND A BALANCE WITH THEIR PRICING AND CONTENT PACKAGE

• The MENA satellite Pay TV market has two key players with a few shake-ups

expected this year owing to the change in strategies by the leading operators.

• My-HD which had low price packages that targeted the expats has introduced

Arabic and special package for North Africa at lower prices and it expected to

have greater than 5% growth rate till 2020.

• Frost & Sullivan expects single digit growth for number of subscribers for the

market till 2020. However in September 2016 GOBX, a new receiver (currently

with FTA offerings) with MBC Pro Sports channels was launched in KSA. A high

penetration of this service on a Pay TV platform could drive Pay TV adoption up

in the region.

• Al-Majd has a strong foothold in Kingdom of Saudi Arabia (KSA) with around 85%

subscribers from the country, there are efforts to improve the market share in

Islamic countries through the Halal content. While the company is an established

incumbent, it faces pressure from other competitors. With no HD content at the

moment and inadequate number of channels, the company stands to lose market

share. It will mostly increase its penetration as a value added package to other

service providers than a standalone service.

• OSN continues to be a leader in revenue, but faces pricing pressure. With new

leadership, the company is driving initiatives in new types of packages at

attractive prices to sustain its base. However without a compelling offer of

content variety, OSN will continue to face the heat in the region.

Satellite Pay TV (DTH) Market: Active

Subscription Market Share, MENA, 2016

Al Majd 11%

beIN Media 55%

OSN 24%

Others 10%

Note: Subscriptions are not mutually exclusive

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11

Fiber-to-the-Home/Building (FTTH/B) Landscape

Source: FTTH Council and Frost & Sullivan

IN COUNTRIES LIKE MOROCCO AND TUNISIA, THOUGH THERE ARE SIGNIFICANT DEVELOPMENTS

IN TERMS OF BROADBAND SERVICE ROLL-OUT, COMMERCIALIZATION IS A MAJOR CHALLENGE.

UAE : 1.52 million FTTH/B

subs

Saudi Arabia : >

684K FTTH/B

subs

Qatar :279K

FTTH/B subs

Significant and dynamic markets (UAE, KSA,

Qatar, Oman, Kuwait)

High potential market (Iraq, Iran)

Markets with significant announcements and/or progresses

(Lebanon, Tunisia, Bahrain, Morocco)

Steady markets with few evolution nor significant announcements

(Jordan, Egypt, Palestine, Algeria)

Opportunity for IPTV

IPTV Pay TV Market: Fiber-to-the-Home/Building (FTTH/B) Landscape, MENA, 2016

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12

Fiber-to-the-Home/Building (FTTH/B) Landscape (continued)

Source: FTTH Council and Frost & Sullivan

IPTV Pay TV MARKET: MAJOR FIBER DEPLOYMENT ACTIVITIES, MENA, 2016

COUNTRY PROGRAM

UAE

Etisalat and du are involved in FTTH/FTTB deployment. Etisalat dominates the FTTH/B market with 87% market

share. The two companies have covered the entire country, with 88.8% adoption rate (number of subscribers in the

households covered), both companies have achieved growth in penetration. Majority of the subscribers have basic

IPTV plans.

KSA STC and Mobily are the only companies offering FTTH/B services. STC is the leader with market share of 68%

followed by Mobily that owns 25% of the market.

QATAR Due to Qatar National Broadband Network (QNBN) stimulation FTTH represents 95% of the total FBB connections.

Ooredoo is also pushing its end users to switch to FTTH.

OMAN Oman Broadband Company (OBC) is deploying a large neutral network, opened to all telcos.

KUWAIT The Ministry of Communication (MoC) is in the process to extend Fiber coverage in more than 67K homes by 2018

(phase 2 of the Program) and more of 100K homes in Phase 3.

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13

Countries with IPTV Offerings

Source: Arab Advisor Group and Frost & Sullivan

IN 2015, THERE WERE AROUND 14 TELECOM OPERATORS PROVIDING

IPTV SERVICE IN 9 COUNTRIES.

IPTV Pay TV MARKET: SERVICE PROVIDERS, MENA, 2016

UAE : Etisalat and Du

Saudi Arabia :

STC and

Mobily

Qatar :Ooredoo

Bahrain :

Batelco, Atyaf

and Nuetal

Egypt : LinkOne and

TelTech Consortia Jordan : Orange Lebanon : Solidere Morocco : Maroc

Telecom

Oman : Omantel

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14

Major Providers and their Subscriber Base

THE INCUMBENTS WHO ARE INVOLVED IN DEPLOYING FIBER ACROSS THEIR COUNTRIES OFFER

IPTV SERVICES AND OTT VIDEO AS A PART OF THEIR TRIPLE PLAY PACKAGE.

IPTV Pay TV MARKET: SUBSCRIBERS OF MAJOR TELECOM OPERATORS , MENA, 2016

Source: FTTH Council and Frost & Sullivan

About 0.5 Million

subscribers for IPTV and

0.2 Million subscribers for

OTT

About 0.1 Million

subscribers for IPTV

Telecom operator agnostic

service with the Batelco

HD box

About 0.05 Million

subscribers for IPTV

About 0.2 Million

subscribers for IPTV and

OTT

About 0.26 Million

subscribers for IPTV and

OTT

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15 9AC1-70

Drivers and Restraints

SATELLITE Pay TV (DTH) MARKET: DRIVERS AND RESTRAINTS, THE MENA, 2016

Impact: H High M Medium L Low

Mar

ket

Dri

vers

M

arke

t R

estr

ain

ts

Focus on Community TV Viewing

Interest in Varied Content (Hollywood and Arabic)

Piracy

Predominance of free-to-air (FTA) Channels

H

H

H

M

H

L

H

H

H

H

M

M

Expat Population H H M

Non – uniform Payment Mechanism H M L

Note: Drivers & Restraints are ranked in order of impact. Source: Frost & Sullivan

1-2 Years 3-4 Years 5 Years

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16

Languages Across Packages

LANGUAGES ACROSS PACKAGES DEPEND UPON THE TYPE OF TARGET AUDIENCE; BUT FOR A LONG TERM

SUSTENANCE, IT IS NECESSARY TO HAVE QUALITY CHANNELS ON MULTIPLE LANGUAGES.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

OSN beIN Al Majd My-HD

Arabic Engliish French Hindi Malayalam Pinoy Urdu Bangla Kannada Tamil Telugu Others

Others for OSN include Tamil, Telugu, Marathi, French, Canadian,

Chinese, Turkish, Bengali and Kannada. Others for beIN include

German, Italian and Spanish. Some channels are in multiple languages

that have been accounted for the split.

English channels dominate due to

focus on Elite audience from Expat

population

Focus on attracting local Arabic

audience who have subscribed for

the sports services already

Focus on attracting local Arabic audience

with Halal entertainment

Packages for all type of language and Ethnic

groups and hence there are channel offerings

across all prominent languages

SATELLITE Pay TV (DTH) MARKET: LANGUAGE ACROSS PACKAGES, THE MENA, 2016

Source: Frost & Sullivan

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17

Genres Across Packages

GENRES COVERED BY PAY TV PROVIDERS CLEARLY STATES THAT THESE PROVIDERS WANT

TO ATTRACT THE FAMILY AUDIENCE WHO ARE INTERESTED IN VIEWING VARIED CONTENT

IN MULTIPLE LANGUAGES.

SATELLITE Pay TV (DTH) MARKET: GENRES ACROSS PACKAGES, THE MENA, 2016

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

OSN beIN Al Majd My-HD

Documentary and News/ Factual GEC Kids Religion Lifestyle/Music Movies Sports Others

Others for OSN include Radio and On-Demand Channels. Others for Al Majd include promotional channels.

GEC for Focus on

family audience

Shifting from entire sports

brand to GEC brand

Lack of sports and movies

genres since the focus is on

halal entertainment

GEC content available across

many languages to attract the

family audience

Source: Frost & Sullivan

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18

Future Trends

Source: Frost & Sullivan

1 For a MENA-wide market presence, content, packaging and pricing for various

target markets in terms of countries and ethnic groups will be essential to gain

market share.

2 Pay TV providers will need to constantly update their content portfolio and retain

the content partnerships to avoid churn in the highly competitive market.

3 Pay TV operators should market the new packages and pricing periodically and

also establish a good relationship with dealers and distributors to tap the first

time Pay TV adopters.

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19 19

OTT Video Services

Jeroen Schlosser, Equinix Managing Director, MENA: “The OTT/On demand

revolution has been the catalyst for a huge transformation in how content & digital media

companies will architect their IT infrastructure both in the MENA region and across their

relevant global footprint. With content being delivered to multiple users on multiple devices

across a wide geographical area it cannot be handled from one central point.

Interconnection POPs located at the edge of the network in carrier-neutral data centers

are key to ensure low latency and consistent end-user experience”

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20

Current and Future Scenarios for OTT Video Services

Source: Frost & Sullivan

Future Outlook (2021)

Market

Status

Hybrid video viewing with TV as the main screen (for pay TV)

and serving as the primary screen for OTT will become the

norm. So a co-existence will occur with linear and OTT viewing

as high speed internet proliferation kicks into the region.

OTT video services are gaining steam in a few broadband-

enabled markets. However, it is still nascent due to a

multitude of infrastructural and economic limitations.

Competition

New entrants like Amazon Prime Instant Video, Ooredoo TV

and Netflix will foster competitive spirit among local

participants. They will adopt an aggressive content strategy

to tackle incumbents.

There will be strategic partnerships and collaborative services of

in the long-run. International production houses will seize this

opportunity to work with local OTT platforms to distribute

content.

Business

Models

Majority of the OTT video services are currently on an

AVOD model due to slow uptake of subscriptions. Freemium

models are evolving to offer a mix of free and premium

content.

A segmented market with varied patronage levels requires

localization of packages to cater to each sub-region. GCC leads

in the number of subscribers, but North Africa requires smaller,

economic packages to gain popularity.

Challenges

Poor broadband coverage, smartphone penetration, digital

payments, technological know-how is hindering growth and

uptake of services.

With National Broadband Plans(Egypt, Jordan, Qatar) and other

digital transformation initiatives in the pipeline, OTT services to

gain momentum and subscriptions by 2021.

Value

Proposition

The consumption of videos over YouTube is a sign for OTT

services to grow tenfold. The market is growing faster than

any developed market in the world.

OTT video services will become an affordable option with

cheaper broadband and smartphone availability. Cord-nevers

will adopt these services due to sheer convenience.

Technology

OTT platforms currently offer HD, UHD and 4K viewing on

2G, 3G and 4G speeds. Adaptive bit rate streaming is

available on most platforms.

Personalization and customer recommendation will drive

consumption with a targeted audience reach and more targeted

playlists for the user.

Current Outlook (2016)

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21

OTT Platforms

Source: Frost & Sullivan, Company Logos

Besides local participants, there are global participants who have a strong footprint in the region. Netflix leads the pack with the

launch of services in early 2016. Amazon Prime Instant Video is poised to disrupt the market and intensify the competition with

attractive packages and compelling local content which Netflix does not offer.

THERE ARE OVER 15 LOCAL OTT PLATFORMS OPERATING IN MENA, BESIDES INTERNATIONAL

PARTICIPANTS WHO HAVE A PRESENCE HERE.

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22

Will Cord Shaving be a Reality?

Source: Frost & Sullivan

TOTAL OTT VIDEO MARKET: DRIVERS FOR CORD SHAVING, MENA, 2016

• Although the infrastructure and purchasing power in the GCC region are driving factors for OTT videos, the prevalence of FTA

channels and the pricing of OTT services pose a threat to the growth of this industry.

• Cord cutting may be a plausible concept in 2025 with cheaper services and a stronger millennial demography.

• Although North Africa has a young demography favoring the uptake of OTT services, the underdeveloped infrastructure and low

purchasing capacity hinders the growth of the industry.

• Cord cutting could be a reality only if government initiatives for connectivity take off and the economies improve to a standard where

these facilities are no more a luxury.

Improved

Purchasing

Power

Developed

Network

Infrastructure

Growth of

Millennials to

Adults

Affordable

Broadband

Rates

Increased

Demand for

Premium

Content Low cost offers

for niche

audience

ALTHOUGH A GROWING NUMBER OF CORD-NEVERS ARE ADOPTING OTT SERVICES, A CORD-CUTTING SCENARIO IS NOT

EXPECTED IN THE NEAR FUTURE. WITH SUBSCRIPTIONS MIGRATING AWAY FROM LINEAR TELEVISION, OTT CONSUMPTION WILL ENABLE CORD-SHAVING IN NEAR TERM.

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23

Regional Video Viewing Trends

North Africa KSA

Kuwait

UAE

Qatar

Source: Emarketer, Statista, Frost & Sullivan

North

Africa

KSA

Kuwait

Qatar

UAE

Egypt has the

highest number of

online video

viewers in North

Africa

Lebanon and

Morocco have upto

55% online video

viewers

They watch more

Arabic content that

international

Some viewers have

up to 3 subscriptions

at a time

190 Million

YouTube views

a day

Ranked #1 globally

for per capita

YouTube views

2 hours of content

uploaded every

minute

World‟s highest per

capita rate of video

consumption on

smartphones

2.4 million

internet users

89% penetration

75% of online videos

are consumed from

smartphones 85% of videos are

watched on YouTube,

15% on Vimeo

#1 for online

video viewing in

the region

40% of OTT users

access sports

content online

57% of Qataris watched

films online in 2016,

against 44% in 2014

53% of internet

users watch

music videos

online

Spend an average of 4.7

hours weekly on

smartphones watching

online videos

71% of internet

users watch

movies online

48%

watch TV

shows

Sports and

Hollywood releases

are the most

watched videos

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24

Glocal Business Models

Source: Frost & Sullivan

AVOD

• Content rights holder and OTT

platform pre-decide the ratio of

revenue sharing.

• Ads can include pre-roll, post-roll ad

streams embedded with the video;

standard banner ads; or rich media.

• Some content owners charge a

minimum guarantee in views as an

advance or surety apart from

revenue sharing arrangements.

• Consumers watch the content free

of cost. They do however encounter

ads between their videos.

SVOD

• SVOD commands a subscription

price for a period of time. This can

range from a week to a month to a

year.

• SVOD packages are prices

between $5-$15 and under $5

deals for North Africa.

• Newer and content (less than 3

years old) typically are priced at a

premium.

• SVOD will become a common

business model across most OTT

participants, however retention of

subscribers will be a challenge.

• Subscription prices vary based on

duration, content, languages

offered, etc.

TVOD

• Transactional VOD when the

consumer pays for the content

to view the content once, or

repeatedly within a stipulated period.

• Transactional VOD could see growth

in revenue if well marketed, and if

priced reasonably for the MENA

market.

• However the availability of highly

„subsidized‟ or free content

repositories through AVOD and

SVOD is challenging for pricing in

TVOD models.

• TVOD content includes premium

titles, latest releases which can be

„rented‟ for a stipulated period at a

minimum price of $2.

THERE IS NEED FOR MICRO SEGMENTATION AND LOCALISATION OF BUSINESS MODELS TO TARGET PRICING

MODELS TO A DIVERSE, FRAGMENTED MARKET WITH A WIDE PURCHASING POWER PARITY, LOW CREDIT CARD

PENETRATION AND BANKING FACILITIES.

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25

Drivers and Restraints – Middle East

Source: Frost & Sullivan

Mobile

device

penetration

High speed

internet

connectivity

High

purchasing

power

among

consumers

Dearth of

western

content

on linear

television

High appetite

for Live Sports

Coverage

Predominance

of FTA

Piracy in online and

television markets

Low adoption of

mobile payments

High price of

data packages

High cost of

original

content

production

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26

Drivers and Restraints – North Africa

Source: Frost & Sullivan

Significant

youth

demography

Growing

government

initiatives

Prevalence of

vernacular

content online

Increased

spending

among

consumers

Development

in telecom

services

Low bandwidth

infrastructure

Poor digital

readiness

Predominance

of FTA and piracy

Political

uncertainty

Poor

regulatory

framework

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27

Government Initiatives to Boost Connectivity Based on the financial capability, social stability, and technological know-how, there are national plans made for

establishing robust broadband connectivity in order to compete more effectively with the rest of the world.

Source:eMisr, QNBN, MICT, Frost & Sullivan.

QATAR EGYPT JORDAN

• ictQATAR plans $550 million to be

invested to accelerate nationwide

high-speed open and accessible

broadband FTTH (fiber to the home

network).

• Qatar National Broadband Network

launched a high capacity

communication satellite with denser

submarine cables in 2013 to boost

bandwidth coverage and speed and

offer free internet in public spaces.

• Qatar Digital Agenda‟s 5-year plan

aims to achieve 95% high-speed

broadband access to homes and

businesses across industries.

The National Broadband Plan is a two-

stage plan envisaged to create a robust

broadband ecosystem of the twenty-first

century.

• Investment worth $350 million will be

required for a successful broadband

expansion. This is projected to

contribute more than $4 billion to the

GDP merely by developing ICT and its

spillover effects on employment.

• The mission for 2021 is to have more

than 90% of the population covered by

4G/LTE, 100% Egyptian communities

connected to 25 Mbps, and every third-

level Sheyakha and village body to have

at least one public access point with 25

Mbps.

• The Government of Jordan has

established a national broadband

network (NBN) for the proliferation

of broadband access in Jordan.

• The Telecommunication Regulatory

Commission (TRC) allocated 4G

spectrum to Zain, Orange Jordan, and

Unmiah and is looking for more providers

for Fixed Broadband Wireless Access

(FBWA).

• The plan would set up a network in the

southern part of Jordan for $31 million by

the end of 2017, connecting 800 public

entities of 3 cities.

• The expansion in the rest of the country

was planned to take off in 2016 with

funding from the Saudi Fund for

Development. This will provide high-

speed internet for public facilities,

schools, hospitals, and government

establishments.

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28

Consumption Preference by Devices OTT video is consumed most from tablets as opposed to the general belief of mobile phones leading the consumption

traffic.

Source:GSMA, Mideastmedia, Frost & Sullivan

DEVICE DISTRIBUTION BASED ON TRAFFIC, MENA, 2016

46% 42%

7% 5% 0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Tablets Smartphones Smart TVs Others

• There is a 60% increase in mobile phone

activity due to consumption of online videos.

• Mobile phone is the focus of content creation

and delivery for better compatibility and

interface.

• There is a shortage of short-form content

tailored for this platform, although large TV

networks are investing in this digital space.

• High bandwidth regions such as GCC record

the highest traffic on OTT platforms.

• User interface and end-user experience are key

for seamless viewing across devices.

• The mobile revolution is a major driver for the

growth of online videos.

• 80% of the online content is consumed from

mobile devices.

• KSA has the highest per capita mobile video

consumer globally.

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29

Sports Dominance MENA as a region is passionate about football and other sports in a way that it is likened to a religious following. This

profound frenzy has played a persistent role in shaping the society over centuries.

Source: Bein Media Group, ESPN, Frost & Sullivan

TOP 3 SPORTS WATCHED, MENA, 2016

55%

16% 13%

56%

21% 20%

63%

22%

10%

0%

10%

20%

30%

40%

50%

60%

70%

Football Swimming Motorsports

GCC Levant North Africa

Major clubs in Europe are owned

by Qatar or the UAE residents.

Growing professionalism of football

and emerging interest in healthy

lifestyles are driving forces behind

this craze.

There is a 40% surge in online

video traffic during tournaments

and leagues, especially on beIN

Sports Connect. Subscriptions also

rise during this season, as people

are willing to pay any price to

watch the sports events live.

Upcoming

Events

2019 World

Athletics

Championships

2022 FIFA World

Cup

2023 World

Aquatics

Championships

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30

KSA Saudi Arabia has the most number of YouTube users per capita in the world. The potential for this to grow exponentially

is why OTT platforms test their products in such markets.

Source:GSMA, Mideastmedia, Frost & Sullivan

• 49% of the time spent on watching videos is

via smartphones.

• YouTube globally is predominantly consumed

by men, but in the KSA it is women who

contribute more to the traffic.

• This trend indicates a more holistic transition

of the nation, inclusive of

women and embracing technology for daily

activities.

• As education is easily accessible on videos

online, empowerment through youth

education and interconnectivity is further

amplifying the modernization in the region.

• Mobile broadband subscribers outnumber

fixed-line connections, indicating a social

transition from a family viewing to a more

personal, individual screening.

• More than 100% mobile internet penetration

will continue to grow as people have more

than one subscription at a given point of time.

32 MILLION

Population

20.8 MILLION

(64.7%)

Active Internet

Users

11 MILLION

Active social

media accounts

WOMEN

Majority Online

Video Viewers

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31

UAE The UAE has a robust OTT ecosystem owing to high speed internet, overall affluence, high adoption of smartphones,

and a fluid population with a large expatriate community.

Source: GSMA, Internetworldstats, Go Gulf, Frost & Sullivan

31.9 million

Population 20.3 million

Active Internet Users

11 million

Active social

media accounts Women

Majority Online

Video Viewers

9.6 MILLION

Population

7.2 MILLION

(76%)

Mobile Internet

Users

45%

POPULATION

Watch online

videos on

mobiles

8.8 MILLION

Active Internet

Users

Daily Use of

Mobile Internet

Daily Use of

Social Media

Daily Use of

PC/Tablet

Internet

3 hours 45

minutes

3 hours

35

minutes

5 hours 6

minutes

44% Use

internet on

LAPTOPS

and

Desktops

50% Use

internet on

MOBILE

PHONES

6% Use

internet on

TABLETS

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32

Trends to watch in 2017 OTT video services are poised to be the next-game changer in the industry due to its dynamic user experience and alternative to pay

television services. Market to evolve based on the broadband expansion and government initiatives in the region.

01

02

04

03

06

05

Source: Frost & Sullivan

OTT video subscriptions touted to grow at 38%

CAGR, encompassing about 8% of the television

market in MENA. At an optimistic rate it could

grow at 47% CAGR covering 25% of the

television market. Jordan, Egypt, KSA, UAE are the fastest growing markets

within MENA (uploads growing at 200%). Broadband

proliferation and adoption of technology will ensure uptake

of services.

Amalgamations between telecom operators,

broadcasters and local media houses to provide

stiff competition to global incumbents like Amazon

Prime Instant Video, Netflix.

Live sports to drive consumption in the region, with its

seamless streaming and catch-up options vital for the

predominant sport fraternity. Amazon Prime Instant Video

is exploring this category to capitalize on the passionate

sport culture. Development and popularization of mobile

payments ( payment gateways, online credit card

transaction, bank transfers and e-wallets)

fundamental for the ecosystem to gain acceptance

and adoption. Countries with poor pay television penetration looking to

adopt OTT services and skip linear subscriptions as a

more economic, comprehensive, convenient

entertainment avenue.

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33 33

Technology Trends in MENA Broadcast Industry

Jan Lange, Regional Sales Director, AVID: “IP workflows give media companies better

agility and flexibility and lower cost, paving way for better tech like UHD/4K. MENA region

is following markets like Europe with little delay, full adoption of HD with most customers,

4K and IP are just starting especially production companies are doing 4k for Hollywood

and others. It‟s slowly coming, this shift in the next 3 years. Production industry moving

towards cloud based collaboration model; the creative people in the field have access to

full production workflows in their iPads, mobile devices and laptops. “

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34

Key Technology Trends in MENA

Source: Frost & Sullivan

Watermarking and

CAS, DRM

Content Protection

H.265

Video Compression

Standards

4K TV

and UHD

Video Quality

Cloud Computing

Storage

IP workflows

OTHER KEY TRENDS TO TRACK INCLUDE SYSTEM INTEGRATORS, PAY PER VIEW (LIVE

STREAMING), VIDEO ON DEMAND, MIDDLEWARE SOLUTIONS, BANDWIDTH FOR QOS AND QOE,

SOCIAL MEDIA INTEGRATION, TRANSCODING SOLUTIONS.

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35

Future Trends

Source: Frost & Sullivan

ARTIFICIAL INTELLIGENCE

SOFTWARE

DEFINED

NETWORKS

VIRTUAL

REALITY

&

AUGMENTED

REALITY

3D/360 VIDEO 5G

BIG DATA AND

ANALYTICS

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36

The Piracy Menace Piracy costs the industry about US$500 million (Dh1.8 billion) each year and with online streaming this is on the rise. A

stringent regulatory system coupled with proactive punitive measures will help curb this rampant issue.

Source: Irdeto, Harmonic, Frost & Sullivan

• Pirate satellite channels, which air

premium content without the rights

or license from the content owner,

broadcaster.

• While rights to premium content are

a heavy investment to broadcasters,

this is completely negated when they

are released on television before the

first pay window. This diminishes

their opportunity to recover their

investment or make revenue from it.

• These illegal versions manage to

earn advertising revenue as well, by

sheer lack of knowledge or

awareness from the advertisers

about their illegal content offering.

PIRACY IN SATELLITE TELEVISION

• Owing to the large expatriate

population from the Indian

subcontinent there is an influx of

local set top boxes which provide

hundreds of free channels, or are

paid in the local region where it

was purchased.

• There are satellite engineers who

install these devices illegally in

the region for a nominal fee and

hence this customer base is

satisfied with their vernacular

content leaving no room to

subscribe to a pay television

operator in the region.

• As the content is illegally

acquired and broadcasted

on television, there is a

parallel streaming that

occurs in the OTT space.

• Some of the content

owners are unaware of

their content being

available online and that

digital rights need to be

acquired for the same.

• Live sports is a major

traffic generator in the

region and there are live

streaming options

available mirroring linear

television.

ILLEGAL SET TOP BOXES

ONLINE STREAMING PLATFORMS

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37

Efforts to Curb Piracy

Source : arabianbusiness.com and Frost & Sullivan

OSN HAS BEEN CAMPAIGNING AGAINST PIRACY WITH THEIR ‘DO THE RIGHT THING’ CAMPAIGN

TO PROTECT THE IP RIGHTS AND HAVE ALSO STARTED TO IMPLEMENT PROCEDURES

TO MONITOR AND REMOVE ALL FORMS OF PIRACY.

SATELLITE PAY TV (DTH) MARKET: EFFORTS OF OSN TO COMBAT PIRACY, MENA, 2016

Conducted more than 316 raids of illegal Pay TV dealers with the support of government authorities in UAE, Saudi Arabia, Bahrain, Kuwait, Qatar Oman, Egypt and Jordan.

Over 86,487 illegal videos were removed from YouTube/Dailymotion, and over 2,272 advertisements of pirated boxes were removed from online markets.

Works with authorities in all GCC countries to crackdown on satellite and IPTV piracy.

Obtained first time a court in the region has issued a conviction on TV piracy involving the unlicensed and unauthorized distribution of IPTV services in the UAE

29 FTA (Free to Air) channel copyright infringements were detected and reported back to the satellite operators and distributors.

Illegal decoders have been confiscated and shops shut down in anti-piracy raids jointly staged by the Sharjah Economic Development Department (SEDD) and OSN.

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38

Anti Piracy Coalition and Arabian Anti-Piracy Alliance

Source: AAA,Frost & Sullivan

ANTI-PIRACY COALITION

• Convened to develop strategies to minimize infringements and pirate channel perpetrators, content

owners, distributors, satellite owners and service providers joined hands to raise awareness about

the implications of piracy in the region.

• Noorsat, Gulfsat,Viewsat, STN, JMC, Etisalat, Du, Nilesat, Arabsat, Eutelsat, Rotana, Art, OSN,

MediaGates, Motion Picture Association,and MBC are some of the members of this coalition.

ARABIAN ANTI-PIRACY ALLIANCE

• Established almost 20 years ago, they are the market leaders in combating piracy in GCC, not only to

identify outlaws but also investigate the modus operandi and preventive measures for protecting

rights of their clients.

• They protect the interests of copyright and trademark owners, manage infringement cases, campaign

for effective enforcements, conduct training seminars and crackdown counterfeit content in the

broadcast industry.

Chrys Poulain, Sales Director at NexGuard, Kudelski Group: "While Egypt, Iran, Jordan and Lebanon have a longstanding

tradition of producing high quality content, the pay TV industry is growing throughout the rest of MENA – with the Gulf States leading

the charge. Yet, to counter the ongoing piracy challenge, the region needs more initiatives to change mentalities: on the first week of

January 2017, the Anti-Piracy Coalition in the UAE has found a like-minded peer in the Saudi Arabia General Entertainment

Authority, showing that the fight against piracy is coming to the fore in mature countries. By combining these organizations with

innovative and affordable services that leverage social media channels like YouTube, Facebook and Twitter, the Middle Eastern TV &

Media industry can ensure that it provides a perfect environment to support the creativity of the content industry, while enabling

consumers to access content in a legal and user-friendly way.”

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39

Content Protection Technologies - Watermarking and Encryption

Source: Verimatrix, NewGuard, Frost & Sullivan

CSA3

WATERMARKING

• Common Scrambling Algorithm is an encryption for DVB compression standards to

encrypt digital content up to 4K/UHD resolution. This will become the need of the hour

as 4K content is on the rise, with piracy evolving simultaneously and posing a threat

to the industry.

• Irdeto and Harmonic have launched the first integrated solutions for protecting

premium content as the earlier CSA1 and CSA2 versions are insufficient and not

future-proof for protecting newer video formats.

• Watermarking technology embeds a digital watermark in audio or

video content at the time of production or broadcast so that it can be monitored and

identified when an illegal distribution occurs.

• They evaluate the true reach of media assets, verify contractual compliance and

identify misappropriation of assets.

• Upon detection of a watermark, the authenticity is checked and any infringement is

reported to the content owner for further actions.

• Forensic watermarking is deployed in set top boxes, and integrates with various

content delivery networks like satellite, cable, IPTV, OTT.

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40

Video Compression and Transmission

Source: DVB Broadcasting, Frost & Sullivan

HEVC MPEG-H (H.265)

• HEVC is an extension of standards like H.264/AVC, improving pattern comparison, difference-coding areas, filtering, computation.

• 50% higher efficiency compared to MPEG4/H.264/AVC standard.

• Can transmit UHD videos from 4K up to 8K

• Video material of the same quality will at 25% lesser bit rate.

• It can support data compression ratio of up to 1000:1

• Besides higher resolution video, it also improves parallel processing methods.

• HEVC along with DVB-S2X satellite modulation technology will achieve greater compression and transmission efficiencies.

DVB-S2X

• An open standard capable of delivering the same performance as other expensive technologies in the market.

• Extends the functionality and efficiency of DVB-S2 to DTH, DSNG, VSAT applications and related services.

• 51% higher efficiency than DVB-S2

• Boosts satellite throughput up to 20% in DTH.

• Benefits include channel bonding of up to 3 channel, advanced filtering of carrier spacing, wideband technology, finer granularity of modulation due to higher number of new MODCODs.

• Improves service robustness and flexibility in DTH networks.

• Silicon chip compliant of DVB-S2X is key for market success of Ultra High Definition TVs.

• The cost of replacing equipment is offset by the significant increase in throughput.

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41

Adoption and Evolution of Video Codecs

Source: Frost & Sullivan

• MENA broadcasters, telecom operators, content distributors are trying to adopt advanced codecs and transmission

solutions. However, the investment required and the uncertain monetization schemes are hindering faster uptake.

• Some of the solutions providers in the region include Rohde Schwarz, Arris, Yahsat, Newtec, Ericsson, etc.

• Early adopters are upgrading their systems to maximize bandwidth utility and cost-effective solutions to service

partners and end consumers.

EVOLUTION OF VIDEO STANDARDS AND CODECS

DVB-S

1994

DVB-DSNG

1999

DVB-S2

2005

DVB-S2X

2014

H.261

1992

H.263

1998

H.264

2005

H.265

2014

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42

4K and UHD Although global TV sales are declining, the sale of 4K TVs has tripled in unit sales since 2015 driving the television

business

Source: Gfk, Du, Etisalat, Sony, Huawei, Frost & Sullivan

4K technology and Ultra High Definition TV are touted to be the future of the Television Industry

• 3840x2160 pixels - approximately four times higher definition than full HD (UHD = 4x HD).

• Superior image quality without distortion or loss of quality on big screens.

• Vivid colors, sharper image, more details (color, contrast, clarity).

• Ultra HD screen sales show that by 2020, 70% of TV sales in the MENA region will be UltraHD.

TV SALES IN MENA, 2020 TV RESOLUTION CHART

UHD 70%

HD 20%

SD 10%

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43

Adoption of 4K Technology in MENA

• MENA has been slower to adopt 4K technology compared to the global consumption. However, sales grew from

200,000 units to nearly a million between 2014 and 2015, and it is expected to cross three million in 2017.

• UAE leads in sales and adoption of 4K TVs, owing to a large expatriate population with high purchasing power.

• The initial sluggish growth was due to concerns in pricing and absence od high quality video. This scenario has

changed considerably with local and global content producers‟ backend solutions evolving to cater to this rising

demand.

Source: Frost & Sullivan

4K TV SALES 4K TV SALES, UAE

31.1

51.9

73

0.8 1.9 3

0

20

40

60

80

2015 2016 2017

Mil

lio

n U

nit

s Global

MENA

106,000

138,000

172,000

0

50,000

100,000

150,000

200,000

2015 2016 2017

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44

What needs to be upgraded next?

Source: Frost & Sullivan

IP, UHD post production conversion and Workflow

HDMI Interconnection standards

DVB-S2X Broadcast transmission standards

HEVC Compression Codecs

4K and UHD Studio Production

For a truly UHD viewing experience, an overhaul of legacy systems and infrastructure is required to enjoy the intended quality and definition of the video.

For a truly UHD viewing experience, an overhaul of legacy systems and

infrastructure is required to enjoy the intended quality and definition of the video.

From production to final delivery, new technology across the value chain must be

adopted to ensure high quality video broadcast.

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45

Local Providers Telecom operators and content producers are under growing pressure to introduce new 4K content to deal with the

untapped opportunity of TV sales and 4K OTT services from OTT providers like Netflix, Amazon, icFlix and Starz

Source: Frost & Sullivan

1

2

3

ETISALAT

BEIN MEDIA

DU

• Launched 4K UHD IPTV with Huawei in UAE in 2015

• 4K Linear Channel and VOD can be viewed through a compatible UHD set-top-box

• UEFA Euro 2016 final matches broadcasted in 4K in MENA

• Integrated Technicolor‟s 4K media server set-top-box with beIN 4K UHD receiver on a dedicated channel called beIN 4K.

• Partnership with content providers and sports entities to amp up 4K content library.

• Launched 4K broadcast service in 2016.

• Tie-ups with studios to upgrade content to 4K.

• Will offer TV series and movies in 4K initially.

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46

Challenges for 4K adoption

PRICE OF 4K TV SETS

One of the major challenges for 4K TV to become mainstream is the cost factor. It is a huge investment to the consumer, since it involves other solutions and subscriptions to be upgraded to enjoy the total 4K experience. However, this will gradually become more economic as demand rises.

LACK OF 4K CONTENT

The broadcast industry is playing catch up, not only produce new content in UHD to cater to the rising demand, but also convert older titles into a 4K resolution. This is an expensive proposition for content owners and requires strategic planning to compete with global incumbents who have already adopted this technology.

HDR Although 4K is touted as the future of TV, High Dynamic Range is one of the most important developments of UHD TV to the erstwhile Standard Dynamic Range, which will further boost the adoption of 4K TVs. HDR is a new video signal format which can deliver wider range of brightness and color. OTT services like Netflix and Amazon provide HDR programming, the onus is on the producers now to deliver content to truly make 4K experience mainstream.

Coding and Delivery Requirements As the resolution improves, there is rising concern about the data consumed and storage required for broadcasting such high quality videos. Video compression solutions will become vital for reducing video sizes into efficient delivery formats which can be transmitted at the lowest possible data connectivity.

Source: Frost & Sullivan

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47

Analogue Switch-off (ASO)

Source: Frost & Sullivan

• Analogue to digital migration of television

broadcasting has been endorsed for a long

time due to its compelling benefits.

• Although most countries in the MENA region

have kicked off this monumental undertaking,

the progress varies in each country based on

governmental support, agreements with

broadcasters and content owners, viewers

adaptability, etc.

• Although the Geneva Agreement has

mandated countries to digitize broadcasting by

2020 in the region , a total switch over will only

take place if analogue services are no longer

protected thereby incentivizing the transition.

• Countries with a high reliance on terrestrial

broadcasting have started trial phases in low

population areas before implementing it on a

large scale.

• However, at the end of the transition period

there will not be a complete shutdown of

analogue services but merely restricted to

areas within the country.

BENEFITS OF DIGITAL TV BROADCASTING

SPECTRUM EFFICIENCY

FUTURE PROOFING TERRESTRIAL BROADCASTING

ECONOMIC FEASIBILITY

HIGHER VIDEO QUALITY

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48

How many Countries have Actually Migrated to Digital

Broadcasting?

Source: ITU, Digitag, Frost & Sullivan

STATUS OF ANALOGUE SWITCH OFF IN SELECT COUNTRIES, MENA, 2016

Country Start Year Projected

Completion Status

Saudi Arabia 2006 2013 Complete

United Arab

Emirates

2014 Aug 2014 Complete

Bahrain 2015 June 2015 Ongoing

Qatar 2011 2013 Complete

Oman - June 2015 Ongoing

Jordan - 2015 Ongoing

Syria - 2020 Not started

Lebanon - 2015 Not started

Algeria 2010 2015 Ongoing

Libya - 2015 Not started

Morocco 2007 June 2015 Complete

Tunisia 2010 2015 Ongoing

Israel 2009 2011 Complete

Egypt 2015 2020 Ongoing

0

1

2

3

4

5

6

7

Complete Ongoing Not started Unknown

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49

Benefits of Cloud Deployment in Broadcasting Frost & Sullivan expects that gradually over the next ten years, broadcasters and Pay TV networks will start creating

unified workflows for all-media distribution and leverage cloud-based platforms.

Enables rapid roll out of multiscreen broadcasting with high-quality video processing solutions, cloud-based streaming and storage capabilities in a unified process with

higher efficiency and low latency. IP-based workflows further enhance this with higher output and leaner processes.

Cloud services allow seamless scaling of resources based on the requirements and repository of video assets. It deploys IP-workflows and integrated solutions depending on whether it is a live event or a high-quality streaming and utilizes advanced VoD and OTT delivery packages ensuring no interruptions or failures in video processing and delivery.

Economize workflows with virtual resources enabling a low OPEX business. These services mitigate expenses of maintaining large data centers in multiple geographies and allow a virtual operations on the cloud. However, the cost of migration of workflow from hardware to cloud solutions will be a significant investment.

Enhances video assets by monetizing consumption with value-added features like targeting advertising, personalization and

recommendations, offline viewing, and content protection and integration with social media for higher reach and collaboration.

Source: Frost & Sullivan

Multilayer security systems to protect data with dedicated deployment for each client, thereby ensuring no leakage or compromise on content security and privacy. Access to the cloud is restricted by stringent authorization and identification of personnel to avoid security threats or infringements leading to data loss.

Hybrid cloud deployment enables strategic mix of private and public cloud services for various processes in video editing and delivery, which ensures maximum utilization of resources at the most optimum costs. This is bringing local and international content providers closer and enabling partnerships on a global level.

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50

Challenges to Cloud

Source: Frost & Sullivan

• One of the major concerns of national broadcaster and service providers is the loss of control over their data storage by migrating to cloud services.

• The physical absence of data in their facility poses a threat to their invaluable assets and potentially relinquishes their control over it.

• This apprehension is gradually changing since data centers are offering platforms for interaction and complete control over local and international content owners and distributors.

• The rise in regional data centers is also creating some level of confidence and higher adoption of cloud services.

Loss of

Control

Cyber

security • Although cloud services are

subject to complex security layers, imminent concerns over transparency and espionage from service providers hinder overhauling of the ecosystem.

• Lack of trust and fear affects skeptic clients to adopt cloud services which is not governed by robust regulatory and judiciary guidelines yet.

Limited

connectivity

• Since the region is non-uniform in broadband services, only a few economies can envision a migration to cloud services. Limited connectivity or slow bandwidth speeds deter cloud deployment.

• Low digital awareness further threaten the adoption of cloud services in technologically weaker economies.

Capital

Intensive

• The cost of migration of workflow from a hardware to cloud solutions is an expensive proposition that many broadcasters cannot afford.

• Adequate training for employees and skilled technicians are required for this transformation, which also makes this an investment-heavy migration.

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51

Players with MENA operations Local broadcasters and producers like MBC, Dubai Media, Istikana, icFlix, Stargate Studios have adopted cloud services to

streamline their workflows to boost efficiency and optimize time, costs and effort for global content delivery

Source: Frost & Sullivan

IMAGINE COMMUNICATIONS

• Offers IP-enabled integrated playout platform to manage all video operations virtually over cloud.

• Both private and public clouds, or hybrid deployment for higher reach, scalability to penetrate global markets seamlessly and maximize investments.

• Provides technologies to maximize content delivery for linear television and OTT streaming with multiple distribution capabilities and end-to-end solutions entirely using cloud.

• Besides content distribution and playout services, they provide solutions for encoding, transcoding, asset management, dynamic ad insertion and packaging formats.

• Solutions for next generation requirements in broadcasting are already in place with their comprehensive technologies over cloud.

ELEMENTAL

• Offers broadcasters a unique platform for multiscreen video delivery both time-shifted and live streaming.

• Live streaming of sports and other events are processed efficiently over cloud.

• It provides solutions for content processing, storage and delivery.

• Enables pay TV operators, OTT platforms to integrate with cloud for easy deployment and seamless scaling of operations based on current requirements.

• Allows for faster expansion into newer markets by virtual presence of videos.

• Their platform as a service (PaaS) is built on AWS cloud.

HARMONIC

• End-to-end video cloud service engineered exclusively for media and broadcast industry to augment video production and delivery.

• Offers a software as a service (SaaS) to transform legacy video production and distribution to a cloud-native ecosystem for multiscreen broadcasting. Their software allows ingest, playout, graphics, transcoding, encryption and delivery on a single user interface.

• Linear and OTT delivery is enabled with higher efficiency and optimizes delivery periods. Live and on-demand streaming solutions are available for multiple platforms.

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Regional Trends for Technology Investments

Fabio Murra, SVP Product & Marketing at V-Nova Ltd: “The main challenge in the MENA region is

the discrepancy between consumer appetite for content and bandwidth available. On the one hand, the

Arab world ranks among the world‟s most avid mobile video consumers. On the other, the bulk of the

region still relies on broadband speeds under 10Mbps, proving incredibly challenging for IP-based

services like IPTV and OTT. To reconcile these two extremes, operators in the region need solutions

that drastically reduce the bandwidth requirements for services in order to be able to launch Ultra HD

initiatives for live sports and Virtual Reality, two areas that require high quality and low latency to deliver

the immersive experiences that consumers want.”

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53

Technology Adoption Index There is an inherent lead by the GCC countries owing to high investment, access to technology and adoption. But Levant

nations score fairly well in this index with high growth rates and influx of funds for upgrading technology

Source: Frost & Sullivan

BROADCAST INDUSTRY:TECHNOLOGY ADOPTION INDEX, MENA, 2016

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

0 1 2 3 4 5 6

Technology Investment

UAE

Qatar

Kuwait

Bahrain Oman

Jordan

Morocco KSA

Egypt

Algeria

Tunisia

Libya

Yemen

Palestine

Technology Access

The growth of technology investments in these

countries is rising with proliferation of national

broadband initiatives, thereby supporting new age

services like OTT video, IPTV services and 4K

transmission in linear broadcasting. State supported

schemes to digitize broadcasting and switch-off legacy

systems has given a fillip to these efforts.

The parameters for evaluating the countries on the

index include adoption of HD TV, average national

broadband speeds, exposure to cloud services,

government initiatives, digitization of broadcast, use of

content protection solutions, investments in broadcast

technology(in $million) like asset management, playout

services, video compression standards, etc.

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54

What are broadcasters spending on?

Source: Frost & Sullivan

Content Acquisition 4%

Content Production 2%

Post Production Editing 22%

Network Infrastructure

12% Storage

42%

Workflow Automation

18%

Sales TOTAL BROADCAST SPEND: SPLIT BY PROCESS, MENA, 2016

• Cloud services are being considered by

major broadcasters to migrate their storage

and workflow automation. This could be a

sizeable chunk of their investments in the

next 5 years.

• With the rising demand for more local

premium as well as marquee international

content on demand, acquiring content

requires big bucks to keep the audience

engaged and loyal.

• Resolving bandwidth issues is the need of

the hour to make multiscreen delivery a

mainstream product. This entails high

compression standards, low latency

streaming technology and bandwidth-

adaptive video quality to ensure

uninterrupted, seamless streaming.

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55

Broadcast Technology Investment in the GCC The region is fragmented in the adoption and investments based on multiple socio-economic factors. The GCC

spearheads the digital transformation drive in most cases

Source: Frost & Sullivan

PAST

• Launch of several OTT platforms

• Higher uptake of HDTV

• Remote production for live feeds and instant broadcast

• IP-based workflows tested for mass deployment

• Digitization and transition to automation via cloud services

CURRENT

• Live streaming to be the focus for major broadcasters

• Multiscreen video delivery the need of the hour

• Use of hybrid cloud to become more rampant

• Digital advertising to be more targeted for higher reach and conversion

• Personalization of playlists a driver for data analytics and enhanced user experience.

FUTURE

• Cloud to be the primary storage center for broadcasters

• High automation and IP-fication of workflows to dominate operations

• 8K to pave the way for higher resolution standards and better compression

• On demand TV will be the norm for majority of the consumption

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56 56

The Last Word

Sarah Kavanagh, Senior Public Relations Manager at Harmonic:

“We see adoption of IT technology for storage, content acquisition and post-production for

cost effective solutions. Cloud infrastructure opens up appetite for more speculative

business opportunities or use cases. Now we can use cloud for infrastructure, you can

license with technology players on OPEX/web share basis. Economic barriers to entry is

lower for new entrants, for established players the movement from CAPEX to OPEX will

potentially change business models. “

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57 9AC1-70

The Last Word

Source: Frost & Sullivan

1 The satellite Pay TV market is expected to grow at a growth rate of 5% till 2020. This will be largely

driven by the inquisitiveness created by new packages in terms of content and price. In the IPTV market,

the commercialization of FTTH broadband will drive the adoption.

2

3 Sports will remain the major driver for uptake of paid services in MENA. But for the long run content in

multiple genres and on multiple languages based on the target audience will be essential to sustain in

the market.

TOTAL BROADCAST INDUSTRY: 5 PREDICTIONS, MENA, 2017

4

5 OTT service providers need to constantly update their content portfolio and retain the content

partnerships to avoid churn in the highly competitive market.

Broadcasters must adopt advanced technologies to rise productivity and encourage optimization of

workflows through IP-enabled automation solutions. Cloud services set to disrupt the industry in the

next 3-5 years.

Targeted advertising and building personalization and audience-based recommendations is the key to

achieve higher viewership and subscriptions. A sophisticated, yet pragmatic User interface is vital for

the success of these services.

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58 9AC1-70

Acknowledgements

LIST OF INDUSTRY PARTICIPANTS FOR THIS RESEARCH

Frost & Sullivan acknowledges the participants for the study and extends its appreciation for their insights and valuable findings. The research was conducted across a number of technology and product vendors, broadcasters, Pay TV networks, online video portals and satellite companies.

• beIN Media Group • Harmonic • Telestream • Vnova • NexGuard • ART TV • Equinix • STARZ Play • Irdeto • Arabsat • Wowza Media

• Avid • Belden Grass Valley • Al Jazeera • Du • Istikana • Telly • MBC • Imagine Communications • Intigral • NewTek

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59 59

For more information, Contact

Vidya S Nath Research Director,

Digital Media Practice,

Frost & Sullivan

P: +91.44.6160 6666

E: [email protected]

W: www.frost.com

Anita Chandhoke Team Leader, Corporate Communications,

Middle East and North Africa

Frost & Sullivan

P: +91.80.67028020

E: [email protected]

W: www.frost.com

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60 60

© 2017 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of Frost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.

Disclaimer

Frost & Sullivan is not responsible for any incorrect information supplied to us by manufacturers or users. Quantitative market information is based primarily on interviews and therefore is subject to fluctuation. Frost & Sullivan research services are limited publications containing valuable market information provided to a select group of customers. Our customers acknowledge, when ordering or downloading, that Frost & Sullivan research services are for customers’ internal use and not for general publication or disclosure to third parties. No part of this research service may be given, lent, resold or disclosed to noncustomers without written permission. Furthermore, no part may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the permission of the publisher. For information regarding permission, write to:

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P: +91.80.67028020

E: [email protected]

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