In 2022, video services revenues surpassed pay TV in Arab MENA

The Arab MENA TV and video market have shown significant transformations over the last few years. The footprint of traditional pay TV accesses has stabilized while video streaming is skyrocketing in the region, both in value and volume. 2022 thus marks the first year where video subscription and advertising video streaming services revenues combined surpassed the pay-TV market in value. Of course, the region is marked by high disparities between markets, with a strong geographic breakdown between the Maghreb, Levant countries and the Arabic Gulf. In GCC countries, we observe a strong penetration of premium services both for connectivity and entertainment, higher ARPUs, and a large adoption of connected devices in the household. Some of these markets also have unique demographics, like Kuwait or Qatar which are inhabited by a majority of expatriates and non-nationals. To be able to respond to each country's needs, local media and entertainment companies are adopting differentiated market strategies. Pricing is one lever on which service providers adjust their offers to local circumstances: since Disney+ launched in the region last June, its service is priced around 8 USD in Saudi Arabia (29.99 SAR) but only around 3 to 3.5USD in Maghreb (399.99 DZD in Algeria, 33.99 MAD in Morrocco, 3.49USD in Tunisia). Another key differentiator for local implementation is striking distribution deals with telco operators. In markets where mobile connectivity is the main internet access, deploying mobile-focused entertainment offers is crucial. At end of 2021 for example, Shahid launched cheaper mobile plans in Morrocco and Tunisia, with a free offer for new subscribers on its local partner's footprint, Orange. Due to an overall lack of fixed infrastructures in Maghreb and Levant, deploying TV and entertainment services on telcos' fixed networks has proven difficult. Meanwhile, if DTH services remain the best way to offer high-quality TV and entertainment services in some parts of the region due to its geography, the high prices of premium satellite TV have been a deterrent for lower ARPU markets. Thus, pay TV penetration remains significantly low outside of GCC markets. The subscriber count of DTH and IPTV combined in Arab MENA is capping at around 4.4 million households. Meanwhile, fixed pay TV ARPUs took a significant hit due to growing competition from cheaper OTT services. The monthly ARPU of paid satellite TV services dropped by one-third in the last 3 years alone. The stagnation of traditional pay-TV access in volume and this drop in revenues has been mostly impacting OSN and beIN, the two historic satellite TV providers in the region. Both have been pushed into transitioning towards OTT services, with a strong focus on their streaming products, respectively OSN+ for the first one and beIN Connect and TOD for the...