If such a thing ever existed, the first page of the TV playbook would say quality content is needed to secure eyeballs, create revenue, reduce churn and secure loyalty. It’s the same truth in every market but the Middle East faces some unique challenges when it comes to making this play profitable.
With an explosion of content options over the last five years in the Middle East, customers are becoming spoilt for choice. The over-the-top (OTT) market is growing rapidly and headlines screaming of a billion dollar market potential by 2020 serve to highlight this upsurge.
Value add OTT services are now an expected addition to any Pay TV subscription. Customers are not satisfied unless they can access their content via any device, anywhere and at any time. OSN Play, and telco equivalents (Du view, elife, Mozaic TV, Invision etc) already provide OTT offerings to engage and retain customers.
The Middle East has also seen a multitude of untethered content services appear recently (Go by OSN, Icflix, istikana.com, VuClip et al) who are striving to attract customers by showcasing content in attractive bundles; box set binge viewing, clip compilations, a focus on Arabic content or enormous catalogues to browse. This virtual video souq is gaining traction.
With 850+ channels available free-to-air (FTA), subscription services are very carefully considered by consumers who are price sensitive. The propensity to pay is further diminished by the proliferation of piracy in the region. The market’s waters are muddied by consumers using pirate-subscriptions of international OTT services (VPN + legitimate subscription, like Netflix and HBO go, from servers outside the region).
In a dynamic and growing market where many legitimate start-ups have entered the game, vying for eyeballs alongside Pay TV companies, free to air giants and regionally focused OTT offerings we must ask ourselves, how can this shift in consumer behaviour be converted into revenue?
Compelling and attractive content is the goal for media providers. But even if the premium goods are secured; whether first run, exclusive or home grown; will the content create a potentially intangible halo effect for brands or can it become a genuine revenue generator?
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Assuming that the quality content has been created or acquired that’s right for the brand and/or target market, I believe both objectives (halo and revenue generating) can be achieved in the Middle East as long as media providers:
Create effective payment solutions
Media providers need to understand the commercial complexities of the region and fit payment structures not just to the region, but to individual markets as needed. The assumption that the Middle East is uniformly ready to use mature market forms of payment (e.g., online and credit/debit card) will not be realised for some years.
The huge swathes of potential consumers that cannot or will not enter credit card details into a payment portal need to be serviced via other means.
Istikana have launched an SMSpayment option tied to telco operator billing which negates the need for card payment. Alternative options include payment cards that can be purchased in supermarkets which are being explored by other OTT services.
Exploit data analysis
The finger in the air, subjective decision making that is used so often in the region needs to be replaced with data analytics and real time research that gives a solid foundation to business decisions. Advertising specifically targeted to users creates a unique and personalised offering and actionable data enables this.
It’s not just content providers that are seeking this type of data, across the Middle East industries are striving to get engaging insights.
This use of information is in its infancy in the region yet whoever gets the data and mines it effectively; in real time first will have an advantage on their competition. Given the increasingly digital world we live in, there is no excuse to not have this information, and to then use it to your advantage.
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Collaborate to mutual benefit
Partnerships with peers must be adopted. Historically, media providers have operated individually with clear strategies and power struggles in a highly competitive environment. However, in order to succeed now there is a need to reverse this traditional mindset and align with equally forward thinking partners.
We are beginning to see Pay TV broadcasters partner with mobile phone operators, enabling mutually beneficial partnerships to evolve. Go by OSN is now accessible via Vodaphone Qatar on an “unlimited data’ package. Etisalat and Abu Dhabi media have joined forces to provide on demand content for telco customers.
Recently launched, and established OTT players must consider effectively monetising the content they are providing in order to serve that twofold conundrum: having a fantastic content offering that is a feather in the cap for providers alongside a healthy and growing profit margin.
Tracey Grant is Program Manager Media and Broadcasting, MEA at IDC Middle East, Turkey & Africa.Further insights can be found at www.idc.com How to monetise Content 2015