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OTT Video Market Gaining Traction, While Pay TV Subscriptions Shrink on the Back of Geopolitical Crisis
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This study recounts the evolving video industry in MENA with the uptake of online video streaming, rise of HD channels and a sluggish Pay TV market. Media companies are plagued by falling advertising revenues, a rich free-to-air (FTA) offering and the additional pressure to launch OTT services to remain competitive in this environment. Global OTT platforms are expanding their footprint in the region with a local play, while local operators team up with telcos to reach large audiences.The Pay TV market in the MENA region is highly fragmented and under-served due to the lack of adequate content for a diverse demography, rampant piracy, prevalence of FTA channels and a low propensity to pay for services. Although the growth has been steady over the past three years, there has been a slump in the market owing to macroeconomic factors and the geopolitical instability in 2017.The MENA region is still evolving in terms of content and business models for OTT and Pay TV; however, the opportunities for growth are increasing with the adoption of high-tech solutions. This requires local partnerships and vendors to gain access to advanced solutions.As piracy continues to cause potential revenue losses to producers, high-calibre content encryption solutions will see higher demand. Sports will remain the major driver for adopting Pay TV services in MENA, promoting the adoption of cloud services for faster live broadcast. There is a huge opportunity for global OTT operators to collaborate with vernacular content creators in order to consolidate their market position with a local content offering.Lack of sufficient payment instruments, low credit card penetration, incoherent government regulations, impending geopolitical unrest, economic downturn in the region owing to a fall in oil prices, high piracy levels in Pay TV and the dependence on legacy systems are some of the challenges for the industry. Some countries have started diversifying their economies by reducing their dependence on oil, promoting tourism and other industries, localising content to cater to the untapped Arabic community, and deploying advanced analytics and big data to understand their consumer and offer personalised services.
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