1 Growth in Pay TV and OTT Video Services Paving Way for Hybrid TV Viewing Produced by Conference Knowledge Partner
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Growth in Pay TV and OTT Video Services
Paving Way for Hybrid TV Viewing
Produced by Conference Knowledge Partner
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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
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
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
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.”
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
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.
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
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)
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
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
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.
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
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
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
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
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
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.
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”
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)
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.
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.
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
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.
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
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
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.
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.
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
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
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
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.
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. “
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.
35
Future Trends
Source: Frost & Sullivan
ARTIFICIAL INTELLIGENCE
SOFTWARE
DEFINED
NETWORKS
VIRTUAL
REALITY
&
AUGMENTED
REALITY
3D/360 VIDEO 5G
BIG DATA AND
ANALYTICS
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
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.
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.”
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.
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.
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
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%
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
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.
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.
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
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
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
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.
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.
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.
52 52
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.”
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.
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.
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
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. “
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.
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
59 59
For more information, Contact
Vidya S Nath Research Director,
Digital Media Practice,
Frost & Sullivan
P: +91.44.6160 6666
W: www.frost.com
Anita Chandhoke Team Leader, Corporate Communications,
Middle East and North Africa
Frost & Sullivan
P: +91.80.67028020
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