Digital TV Research: MENA pay TV ARPU in decline

Pay TV revenues are set to grow in the Middle East and North Africa (MENA) between 2017 and 2023 but at a lower rate than subscription numbers, according to Digital TV Research.

DigitalTVResearch_MENAThe Middle East and North Africa Pay TV Forecasts report said the figures indicate that average revenues per user (ARPU) must be falling in the region.

Across the 13 Arab-speaking countries in the region, the research estimates that pay TV revenues will grow by 24% from US$1.18 billion in 2017 to US$1.46 billion in 2023 – despite pay TV subscriptions rising by 47% over the same period to 5.84 million.

Digital TV Research principal analyst, Simon Murray, said that the MENA region “has always been difficult for pay TV” due to rampant piracy and many homes receiving free-to-air channels.

However, he added that beIN is “shaking up the market” by taking on long-established rival OSN with a strong slate of exclusive sports rights and more entertainment content.

While OSN has exclusive long-term deals with all the Hollywood studios it has struggled to push much beyond one million subscribers, according to the study, which estimates that beIN will overtake OSN by subscriber numbers in 2018 and by revenues in 2022.

 “Competition is increasing – not only from beIN, but also from the multitude of SVOD platforms that have launched in recent years,” said Murray. “These platforms compete more directly against OSN than beIN due to their emphasis on drama. No SVOD platforms can compete against beIN with live sports provision.”

“OSN’s reaction was to cut its subscription prices substantially in February 2017. Digital TV Research believes that further cuts will be made as OSN struggles to hold on to its subscriber base until its fees are just above beIN’s.”

Digital TV Research predicts that OSN’s revenues will be US$498 million in 2023 – down from US$700 million in 2015. It expects beIN’s revenues to double between 2016 and 2023. By 2023, beIN is forecast to have 1.87 million satellite TV subscribers, compared to OSN’s 1.46 million.

Overall, across the 20 countries covered in the MENA report, Digital TV Research predicts that pay TV revenues will fall in 2018 and be flat in 2018, before starting a “slow recovery”. In 2023 it expects revenues to reach US$3.62 billion – up 7.8% compared to 2017.

In Israel it expects pay TV revenues to fall from more than US$1 billion in 2015 to US$767 million in 2023 as cheaper OTT platforms force traditional pay TV operators to lower their fees.

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