Mena offers best market for media growth: Study

'Cultural shifts among the region’s young people have spawned a tremendous creative energy, changing the way media is both consumed and created.'

By Silvia Radan/staff Reporter

Published: Fri 21 Nov 2014, 1:09 AM

Last updated: Tue 7 Apr 2015, 8:47 PM

Shahid Khan, managing partner, MAG; Rashed Al Harmoodi, vice-president, Mubadala Corporate Communications; Robert Knezevic. senior vice-president, Sesame; Sanjay Rania, GM, MENA, FOX channels and Amira Rashad, former head of media, Yahoo ME, Africa. KT photo by Shoaib Anwer

A new study released at the Abu Dhabi Media Summit has revealed that local and Arabic content is vital for the growth of the media sector. It also said that mobile, paid and digital media targeting a younger population will be key focus areas in the next five years and e-commerce will also rapidly gain a foothold in the media industry.

The joint study was undertaken by management consultancy Strategy&, and Media Zone Authority Abu Dhabi, twofour54.

“Mena media market’s evolution is encouraging regional players to revisit their business models and explore investments in high-quality local content. With Mena offering one of the strongest opportunities for media industry growth, these findings should encourage global players to re-evaluate their presence in our region,” said Noura Al Kaabi, CEO of Media Zone Authority Abu Dhabi, twofour54.

She said Mena media industry is undergoing a fascinating transformation. ‘‘Cultural shifts among the region’s young people have spawned a tremendous creative energy, changing the way media is both consumed and created.”

“Gaming in the region is growing faster than the global average, exceeding even other fast-growing emerging markets such as Russia, China, and South Korea”, said Jayant Bhargava, Partner with Strategy&, formerly Booz & Company.

Mobile games to take lion’s share

“Gaming is expected to nearly triple in size in the coming years — from $1.6 billion in 2014 to $4.4 billion in 2022”, he added.

During this period, growth in boxed games will slow down and mobile will become the dominant platform, taking the largest share of the market by 2018. Tablets will be key to this and should represent up to 20 per cent of the mobile market within a year or two. The study expects the total gaming segment size to mirror the size of the TV market in seven to eight years.

To date, global games from international developers have captured the lion’s share of opportunity, roughly 90 per cent of the Arab market. However, games localised for the market are expected to capture over 15 per cent of the market in three to five years. International players are expected to increasingly Arabise their content for the region. Regional developers are also localising global games and creating original games for the local market.

“The study highlights the influence of the Arab Digital Generation in driving the growth of gaming. On average, people in the age group of 18 and 24 in the region spend eight hours per week playing games. In many Mena countries, including Saudi Arabia, more than 50 per cent of Internet users play games online. The digital facility of young people is contributing to the Middle East’s emergence as a gaming development hub”, added Bhargava.

New trends in audio-visual content

The audio-visual content market in Mena is seeing many trends that could significantly change the industry. The most notable of these is the transition to paid media. Pay TV is forecast to grow at 10.3 per cent per year, compared to ad-based TV’s 7.8 per cent. Satellite TV continues to dominate the sector, accounting for more than 95 per cent of TV distribution.

The study predicts significant growth in digital delivery of audio-visual content, driven by the emergence of youth-produced content and proliferation of new distribution platforms such as IPTV and over-the-top (OTT) websites. For example EyshElly, a programme created by UTURN Entertainment, set up in 2010 by three Saudi university students, received approximately 2.2 million subscribers and 245 million views on YouTube.

Growth of e-commerce

E-commerce will be a critical source of digital growth. The Mena e-commerce market was worth $2.3 billion in 2014 and is expected to grow 13 per cent annually to 2019. Saudi Arabia and the UAE are the dominant markets, and will continue to make up almost 40 per cent of the total market to 2020.

Increasing numbers of young people are contributing to e-commerce revenues. Forty percent of Internet users aged between 15 and 35 made an online purchase in 2012, compared with 22 percent of users aged between 49 and 65.

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