Pay-TV subscriber figures have more than trebled in the Middle East and North Africa over the past decade when including Israel and Turkey in the equation, with 9.6 million households in the region forecast to access premium content by the end of the year, according to a new study by Informa Telecoms & Media.
The MENA region saw pay-TV subscription figures rise to 9.2 million at the end of 2010, escalating from its base of just over 2.5 million at the start of the millennium. The report predicts that the 10 million mark will be met next year; however currently 60% of these total homes are located in Turkey and Israel.
"Until now, pay TV has been very much targeted at affluent demographics, either wealthy locals or well-paid foreign workers," said Adam Thomas, media research manager, Informa. "But services like Al Jazeera Sport are increasingly putting the cost of pay TV within the grasp of the mass market.
"If you add to that the Arab Spring movement, with one of its aims being to close the income disparity gap, then you have a situation that is increasingly positive for pay TV," he added.
The Arab world's major pay-TV platforms Orbit Showtime Network (OSN) with around half a million subscribers, and the Arab Radio & Television (ART) owned Arab Digital Distribution (ADD), have now been joined by premium sports-based channels such as those offered by the sovereign-backed Al Jazeera of Qatar and Abu Dhabi Media of the UAE.
Football is the driver for both these state-backed companies, however the regional broadcasting rights for major competitions such as the English Premier League and UEFA Champions League have escalated to such an extent that non-government funded operators such as OSN no longer see such properties as commercially viable.
The report suggests Al Jazeera Sports, which has the rights to the latest and forthcoming FIFA World Cups, as well as UEFA Champions League and FA Cup tournaments now attracts around one million subscribers across the Arab world.
While satellite remains the dominant delivery method of free to air and subscription-based television across the region, internet protocol television (IPTV) is also beginning to take off in some of the wealthy Gulf Cooperation Council (GCC) countries such as the UAE, Saudi Arabia and Qatar. However, in most of the MENA region broadband penetration is low and services expensive to access, hampering the growth of IPTV technology.
The region's youthful demographic is helping offset restrictive or out dated regulations in many MENA countries, and minimising the barrier to new technology adoption. "This mindset will help promote demand for important concepts such as convergence and technological upgrading," says the Informa study.
"Where the broadband infrastructure allows it, over-the-top (OTT) video services are gathering momentum, tapping into the fact that the young tend to spend more of their disposable income on new communication types, so giving these services a good chance of success," it adds, revealing the region's pay-TV providers are sensibly responding by developing 'TV everywhere'-type services.
In total, the report claims there were 79.9 million TV households in MENA at the end of 2010, with satellite TV being the primary delivery method for 65% of the region's TV households. A number of homes, particularly those located in the GCC, either have two dishes or a dual LNB to allow TV reception from two satellites.
By the end of 2016, Informa believes 13.7 million homes across the Arab world, Israel and Turkey will subscribe to pay-TV, representing an 18% penetration rate.