Analysys Mason MENA OTT Music Video Aug2013 RDRK0 SAMPLES

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Analysys Mason Limited 2013

The OTT media market in the Middle East and North Africa: emerging players and operator strategies

Research Report

The OTT media market in the Middle East and North

Africa: emerging players and operator strategies

August 2013

Karim Yaici


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Contents

5. About this report

6. Executive summary

7. Operators must position themselves to capture the growing OTT media

opportunity as smartphone and broadband adoption grow in MENA

8. The absence of international players, and changing consumption trends,

are favouring the emergence of local OTT media players in MENA

9. Recommendations

10. Recommendations for mobile operators considering the launch of an

OTT music offering

11. Recommendations for fixed operators considering the launch of an OTT

video offering

12. Recommendations for OTT content and media players

13. OTT media market overview and value chain

14. The focus of the OTT video market has shifted from the PC to the TV in

developed markets, and this trend has only started to emerge in MENA

15. Strategic approaches to OTT: operators should use their core capabilities

to determine how to position themselves in the OTT media market

16. MENA operators have limited OTT offerings, but regional start-ups offer

alternative media consumption experiences online and via mobile devices

17. OTT video could substitute for pay-TV services, which have been

dominated by satellite broadcasters and, to lesser extent, IPTV providers

18. In MENAs mobile music market, partnerships with OTT players can

strengthen operator positioning and offer alternatives to illegal downloads

19. Market context: so far, local players have been more successful in

capturing the OTT opportunity than international OTT players

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20. Market context: the challenge of piracy is significant in MENA, which

hampers monetisation of OTT content

21. OTT video services and strategies in MENA

22. Mobile is a key driver for OTT video demand: our mobile Internet survey

found that more than 60% of respondents watched video on their

handset

23. Smartphones clearly drive video usage and OTT take-up: smartphone

users are far likelier than feature phone users to watch mobile video

daily

24. Operators can be enablers/distributors in the OTT video market, but mustprepare their infrastructure for the increased demands of these services

25. On the service supply side, the OTT video market is burgeoning in

MENA, but partnerships with operators or vendors are still rare

26. Emerging regional video OTT players are providing ad-supported content,

but players will need to adopt new monetisation models to sustain growth

27. Broadcasting and pay-TV companies in MENA are investing in the OTT

space, taking advantage of the absence of international OTT players

28. Fixed operators in MENA have launched multi-screen video services to

complement their broadband or IPTV service offerings

29. OTT video case studies: Etisalat (UAE) and STC (Saudi Arabia)30. OTT video case studies: icflix (UAE)

31. OTT music services and strategies in MENA

32. Mobile is also a key driver of demand for OTT music: more than 40%

of mobile Internet users in our survey use music on their phones

Slide no. Slide no.


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Contents

33. Despite the clear demand for mobile music in MENA, market players are

still working out how to monetise content in the face of widespread piracy

34. MENA has only a few examples of operator-run music portals and they

offer limited choice

35. Local OTT players are revitalising their music offerings by switching

from download to streaming services

36. OTT music case studies: Anghami (Lebanon)

37. OTT music case studies: Yala Music (various countries)

38. About the author and Analysys Mason

39. About the author

40. About Analysys Mason

41. Research from Analysys Mason

42. Consulting from Analysys Mason

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Slide no.


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List of figures

Figure 1: Major companies discussed in this report

Figure 2: Smartphones share of mobile handset connections, Middle Eastand North Africa, 20092018

Figure 3: Fixed broadband connections, and DSL and fibres share of

connections, Middle East and North Africa, 20092018

Figure 4: Changing focus of the OTT video market

Figure 5: Operators core capabilities and their benefits to OTT players

Figure 6: Principal paths for video consumption in the Middle East and

North Africa

Figure 7: Channels to access full music tracks for consumers in the Middle

East and North Africa

Figure 8: Respondents who use video on their phones, Egypt, Saudi Arabia

and the UAE

Figure 9: Mobile video usage by content type, Egypt, Saudi Arabia and

the UAE

Figure 10: Reported use of video on mobile phones within the past

3 months, by handset type, Egypt, Saudi Arabia and the UAE

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Figure 11: Smartphones share of mobile handset connections, Middle East

and North Africa, 20092018Figure 12: Fixed broadband connections, and DSL and fibres share of

connections, Middle East and North Africa, 20092018

Figure 13: Examples of OTT video streaming services, Middle East and

North Africa

Figure 14: Examples of OTT video services supported by media companies,

Middle East and North Africa

Figure 15: Operators multi-screen and OTT video offering in the Middle East

and North Africa

Figure 16: Respondents who use music on their phones, Egypt, Saudi

Arabia and the UAEFigure 17: Reported use of music on mobile phones within the past

3 months, by handset type, Egypt, Saudi Arabia and the UAE

Figure 18: Examples of operators music streaming or download portals,

Middle East and North Africa

Figure 19: Examples of OTT music players, Middle East and North Africa


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About this report

This report analyses the key trends in, and drivers and

inhibitors of, the over-the-top (OTT) media market in the MiddleEast and North Africa (MENA), focusing on two segments.

Video services: These include video content distributed

over the operators infrastructure with an unmanaged

infrastructure (unlike IPTV). Content can be consumed on

mobile devices, desktop computers or TVs.

Music services: These include digital music streaming and

download services. Most of the music consumed in the

region is pirated, but new companies have recently emergedto provide legal music streaming and download services.

The report also provides recommendations for fixed and mobile

operators, and content players in the region. Figure 1 gives

an overview of some of the companies discussed.

This report is based on several sources:

Analysys Masons internal research

interviews of stakeholders in the MENA market our survey of 2000 feature phone and smartphone users

conducted between November 2012 and January 2013 in

Egypt, Saudi Arabia and UAE.1

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Market Major com panies discussed

Video Music

Bahrain Batelco

Egypt Active Digital Development,

LINKdotNET, TE Data

International Google (YouTube), Netflix,

Dailymotion

Apple, Blogmusik (Deezer)

Jordan d1g, iAraby, Istikana,

TootCorp

Umniah

Pan-Middle

East

Aljazeera Satellite Network,

icflix, MBC, Sky News

Arabia

Anghami, Hewlett-Packard

(HP), Music Master,

Ooredoo, UrFilez, Wataniya

Telecom,Yala Music

Saudi Arabia STC

UAE Abu Dhabi Media, EITC(du), Etisalat, OSN

Note: Case studies are provided for players highlighted in bold.

1 For further details, see Mobile Internet Survey in the Middle East and Africa 2013: OTT

services and mobile money usage. Available at www.analysysmason.com/MIS-MEA-OTT.

Figure 1: Major companies discussed in this report [Source: Analysys

Mason, 2013]
http://www.analysysmason.com/MIS-MEA-OTThttp://www.analysysmason.com/MIS-MEA-OTThttp://www.analysysmason.com/MIS-MEA-OTThttp://www.analysysmason.com/MIS-MEA-OTThttp://www.analysysmason.com/MIS-MEA-OTThttp://www.analysysmason.com/MIS-MEA-OTT




Strategic approaches to OTT: operators should use their core capabilities

to determine how to position themselves in the OTT media market

Fixed and mobile operators have several assets that they could use in a partnership with an OTT media player. Operators could

decide to limit access to OTT media completely, but we believe that they should instead adopt a more-constructive approachthrough partnerships with OTT players.

Operators could play a significant role in this emerging content market by offering a new distribution channel and facilities for

monetisation, such as integrated billing. They could also profit from OTT video by monetising the additional bandwidth that consumers

use, but should offer additional data capacity at a reasonable cost and avoid the temptation to impose excessive charges. At the same

time, OTT players would be able to provide fresh content to mobile subscribers, and create opportunities to improve the value of

operators data offerings through media bundling.

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Figure 5: Operators core capabilities and their benefits to OTT players [Source: Analysys Mason, 2013]

Operator capabi l i ty Benefi ts to OTT players

Provide connectivity Provides a distribution channel for their services.

Marketing and reach Uses traditional sales and marketing channels to promote media contentfor example, by launching SMS

campaigns, placing advertisements in their applicationstores and positioning content at the top of their portals.

Billing relationship with customers Facilitates payments for premium content via means such as integrated billing, in a region where a high proportion of

the population is unbanked.

Ability to control quality of experience Operators have the ability to offer an enhanced user experience and enable end-to-end control of content

management, delivery and quality of service.



The OTT media market in the Middle East and North Africa: emerging players and operator strategies 38

Executive summary

Recommendations

OTT media market overview and value chain

OTT video services and strategies in MENA

OTT music services and strategies in MENA

About the author and Analysys Mason


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About the author

Karim Yaici(Analyst) works on Analysys Masons The Middle East and Africaregional research programme. Hisprimary areas of specialisation include mobile operators VAS strategies in developing markets, and the adoption of

IP Multimedia Subsystem (IMS) services and mobile devices. Prior to joining Analysys Mason, Karim was an

associate analyst at Informa Telecoms & Media, where he authored reports on mobile accessories and mobile

applications. Prior to that, he worked as a research engineer in the Centre for Communication Systems Research

(CCSR) and Vodafone. Karim holds an MSc in Information Systems Management from the University of

Southampton and a PhD in humancomputer interaction from the University of Surrey.

39


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About Analysys Mason

Knowing whats going on is one thing. Understanding how to take advantage of events is quite another. Our ability to understand the

complex workings of telecoms, media and technology (TMT) industries and draw practical conclusions, based on the specialistknowledge of our people, is what sets Analysys Mason apart. We deliver our key services via two channels: consulting and research.

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Consulting

Our focus is exclusively on TMT.

We support multi-billion dollar investments, advise clients on

regulatory matters, provide spectrum valuation and auction support,

and advise on operational performance, business planning and strategy.

We have developed rigorous methodologies that deliver tangibleresults for clients around the world.

For more information, please visit www.analysysmason.com/consulting .

Research

We analyse, track and forecast the different services accessed by

consumers and enterprises, as well as the software, infrastructure

and technology delivering those services.

Research clients benefit from regular and timely intelligence inaddition to direct access to our team of expert analysts.

Our dedicated Custom Research team undertakes specialised and

bespoke projects for clients.

For more information, please visit www.analysysmason.com/research .


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Research from Analysys Mason

We provide dedicated coverage of developments in the telecoms, media and technology (TMT) sectors,

through a range of research programmes that focus on different services and regions of the world.

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Alongside our standardised suite of research programmes, our Custom Researchteam undertakes specialised, bespoke research

projects for clients. The dedicated team offers tailored investigations and answers complex questions on markets, competitors and

services with customised industry intelligence and insights.

To find out more, please visit www.analysysmason.com/research.


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Consulting from Analysys Mason

For more than 25 years, our consultants have

been bringing the benefits of applied intelligence

to enable clients around the world to make

the most of their opportunities.

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Our clients in the telecoms, media and technology (TMT)

sectors operate in dynamic markets where change is

constant. We help shape their understanding of the future

so they can thrive in these demanding conditions. To do

that, we have developed rigorous methodologies that

deliver real results for clients around the world.

Our focus is exclusively on TMT. We advise clients on

regulatory matters, help shape spectrum policy and develop

spectrum strategy, support multi-billion dollar investments,

advise on operational performance and develop new

business strategies. Such projects result in a depth of

knowledge and a range of expertise that sets us apart.

We help clients solve their most pressing problems,

enabling them to go farther, faster and achieve their

commercial objectives.

To find out more, please visit

www.analysysmason.com/consulting .


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Published by Analysys Mason Limited Bush House North West Wing Aldwych London WC2B 4PJ UK

Tel: +44 (0)845 600 5244 Fax: +44 (0)845 528 0760 Email: [email protected] www.analysysmason.com/research Registered in England No. 5177472

Analysys Mason Limited 2013. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any meanselectronic, mechanical,

photocopying, recording or otherwise without the prior written permission of the publisher.

Figures and projections contained in this report are based on publicly available information only and are produced by the Research Division of Analysys Mason Limited independently of any c lient-

specific work within Analysys Mason Limited. The opinions expressed are those of the stated authors only.

Analysys Mason Limited recognises that many terms appearing in this report are proprietary; all such trademarks are acknowledged and every effort has been made to indicate them by the normal UK

publishing practice of capitalisation. However, the presence of a term, in whatever form, does not affect its legal status as a trademark.

Analysys Mason Limited maintains that all reasonable care and skill have been used in the compilation of this publication. However, Analysys Mason Limited shall not be under any liability for loss or

damage (including consequential loss) whatsoever or howsoever arising as a result of the use of this publication by the customer, his servants, agents or any third party.

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Analysys Mason MENA OTT Music Video Aug2013 RDRK0 SAMPLES

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