Ahead of CABSAT 2023, we take a look at the major trends that are dominating discussion amongst broadcasters and operators across the MENA region.
The MENA region is one that is used to constant change. But even so, the dynamic nature of the streaming market here is impressive. A decade ago, there were only seven streaming services in the Middle East and North Africa. Current data now shows that there are more than 50, with the majority of them regional ones, focusing on their own markets and audiences.
In the run up to CABSAT, three topics have been consistently dominating discussions with our customers: FAST, latency, and piracy.
FAST and curious
According to Digital TV Research the region as a whole is on a serious streaming upswing. MENA OTT TV episodes and movies will generate $5.69 billion by 2028; double from $2.83 billion in 2022. The 13 Arabic-speaking countries will generate $2.47 billion in 2028, up from $1.28 billion in 2022, while the analyst estimates that AVOD will bring in $1.55 billion by 2028 – up by $1 billion on 2022. That is an enormous 182% increase and, from what we hear when we talk to our customers, much of that will be down to FAST.
FAST, Free Ad Supported Television, has been one of the success stories of the post-pandemic streaming era and is reshaping the streaming landscape in all territories around the world. In the influential US market, 69% of viewers use free streaming services at least once a month; in Europe 50% more FAST content hours were watched from Q3 2021 to Q3 2022; and all in all, it is estimated that global FAST revenues will triple to $18 billion by 2028.
Judging by the number of times it is mentioned, many operators here wish to launch their own FAST services. It is understandable that they do, as FAST brings many benefits. It allows operators to capture new viewers and quickly explore new niche market opportunities; it enables them to mitigate against churn and opens up the powerful model of supplying tiered services to their customers. And, as FAST services are primarily focused on existing content, they can be launched with a significantly lower budget than other services, even after accounting for the cost of acquiring long-tail content.
Alternatively, operators can leverage their own inventory and maximize their revenue opportunities beyond FAST, by adopting targeted TV advertising, which segments their audience data and offers advertisers routes to precisely the customers they want to target, both on a regional and a local level. One of the noted additional benefits of this technology is that its effectiveness allows operators to run with lower ad loads, while viewers have also shown a marked preference for targeted ads, seeing them as less intrusive than the traditional variety.
As tiered services become the new normal and both FAST and AVOD services are seen as critical components of a multi-layered offering to viewers, so we expect targeted advertising to be a key component of many new services that we are involved in worldwide.
Minimizing latency & fighting piracy
Two other subjects often crop up when talking to customers.
The first is latency. This has become a problem as streaming services have embraced live events and we have seen an increasing number of sports events in particular starting to feature in both SVOD services and broadcaster’s companion OTT offerings.
A traditional broadcast signal usually takes approximately four seconds to go from the pitch side camera to the viewer’s screen, but streaming requires several different steps along the way that have seen that rise to a common 30 to 40 seconds. Given that viewers rarely watch sports in isolation anymore, the discrepancy between a goal being scored and celebrated on social media, for example, and the viewer actually getting to see it for themselves can be a cause of some dissatisfaction among viewers.
In collaboration with industry partners, VO has developed a solution that reduces latency to only three seconds, using a technology that can be easily deployed by the majority of operators. With the amount of viewing traffic growing between 20-35% each year, there is indeed a significant need for it too, as the problem of latency is only going to get worse unless treated.
In the same category of immediate action being required, piracy remains a serious problem in the MENA region. Indeed, in many respects it has got worse in recent years, as the pirates pivot towards web-based streaming services.
The threat constantly evolves and changes too. We recently spotlighted a whole new form of video piracy, CDN Leeching, where pirates effectively hook themselves into the streaming infrastructure of a legitimate service and use the broadcaster or operator’s own technology to help distribute their illegal content. Adding insult to injury, the resulting increase in CDN traffic results in higher charges for the legitimate users. Such services can be almost indistinguishable from the real thing and offer a degree of usability and quality to the viewer that is a very real threat to established rights holders throughout the region and beyond.
To paraphrase a well-known saying, the price of doing business is eternal vigilance. That’s why broadcasters and operators are looking to tap into the very latest cybersecurity solutions and holistic anti-piracy services that utilize both AI and human expertise to counteract any type of security threat, well-known or emergent. It’s an ever-changing landscape with constantly shifting battle lines, and the situation is as bad in MENA as it is anywhere in the world. It’s encouraging though to see news such as the Alliance for Creativity and Entertainment (ACE) working with Egyptian authorities to shut down the largest piracy ring in the region, the Shahed4U piracy ring, which at one point comprised more than 118 domains and multiple copycat sites. But there are many more where that came from, and the effort has to remain constant.
A complex picture with plenty of opportunities
The Middle East market is currently seeing a surge in video consumption which is fuelling the industry’s expansion engine. Alongside the constant battle against increasingly sophisticated forms of piracy, customer churn, engagement, and viewer satisfaction remain at the center of any business across this highly competitive region.
As the pace of technological change is also accelerating, companies need to ensure they partner with vendors that can adapt quickly to the rapid changes in the consumption patterns, and business models that are rapidly changing across MENA. With only five of the global giants listed amongst the 50 leading streaming companies in the region, and only two of them being in the top five, there is evidently a significant opportunity available here today for local players and operators of all sizes.