The launch of the Starz OTT platform in the Middle East will spark a wave of overseas SVoD service launches in the region, a new report predicts.
Traditional cultural barriers that have stopped international companies launching in the Middle in the past are “starting to fall”, according to research firm Ovum, which is part of DTVE publisher Informa.
Though the Middle East, whose core is the wealthy Gulf region, contributes just 5% of total global OTT spend, the sector is set for rapid growth, Ovum reported after profiling 11 leading local premium subscription streaming services.
This is primarily down to appetite for entertainment content in the Gulf States, a dearth of Western television- and movie-focused platforms offered at low prices, and the fact two-thirds of the world’s Arab population is under 30.
US premium pay operator Starz debuted its global SVOD player in the Middle East as Starz Play Arabia on April 2, marking the first time a “non-native” provider had launched such a service there. The service is currently rolling out, offering subs premium shows such as Power (pictured) and Black Sails.
Currently most SVOD platforms in the Middle East are offered by established telcos, pay TV operators and broadcasters.
“We expect Starz Arabia to thrive in the MENA region given the quality of its catalogue and its timing,” said senior analyst at Ovum’s TV Practice, Tony Gunnarsson.
“It will be under pressure, however, as will the rest of the industry, with the almost inevitable entry of Netflix. As the global expansion of SVOD services continues apace, Ovum believes that there are currently over 100 million SVOD subscribers globally, and that this number will grow to 180 million in 2019.”
“Middle Eastern subscription streaming is set to grow dramatically compared to other regional markets over the coming years,” added Ismail Patel, analyst in Ovum’s TV Practice. “SVOD revenues will grow by over 25 per cent annually to 2019, accounting for over 70 per cent of all OTT revenues in the region.
“A dramatic increase in subscriber numbers is forecast in the next few years and 2019 will see more than one million Middle Eastern subscribers watching streaming services, complementing a growing overall market for visual entertainment.
Furthermore, Patel added that “long-held reservations when considering a MENA launch are no longer game breakers as censorship controls are relaxed for pay TV operators and streaming services”.
Ovum said local services, which includes the like of icflix, would need to invest in original content to remain competitive, with exclusive programming and movies becoming increasingly important.
Furthermore, while live sports would continue to command the biggest audiences, exclusive movies and high-end TV dramas could “significantly differentiate individual streaming services”.