The Middle East media and entertainment Market holds immense potential for growth, presenting opportunities for industry players to adapt, innovate, and thrive in a dynamic landscape.
The Middle East media and entertainment market is on a trajectory of substantial growth, with an estimated size of USD 42.72bn in 2024, expected to surge to USD 66.99bn by 2029, marking a CAGR of 9.41% during the forecast period (2024-2029), according to a report by Mordor Intelligence.
Significant transformation characterises the media and entertainment industry in the region, fueled by cultural shifts among the young population. This shift has not only gained considerable traction but also ignited untapped demand for local Arabic content, propelling the regional media sector towards considerable expansion.
The media and entertainment (M&E) industry, at the forefront of digital disruption, continues its transformative journey. As critical networks and studios unveil direct-to-consumer streaming facilities in 2021, industry players are strategically positioning themselves to offer extensive content libraries. This move aims to attract and retain customers, creating opportunities for media and entertainment companies to re-aggregate their content libraries with a diverse collection, spanning music, video, gaming services, and ad-supported content.
The increasing penetration of mobile internet services provides crucial support for the region’s growing media and entertainment market. In 2021, the number of mobile internet users in the MENA region surpassed 300m, with an anticipated penetration rate of 50% by the end of 2022, according to GSMA.
Social media usage is witnessing significant growth in Saudi Arabia, capturing the attention of agencies, brands, and media companies for advertising purposes. Reports from the World Association of News Publishers reveal that individuals in the MENA region spend an average of about 3.5 hours daily on social media platforms.
Despite challenges, paid and digital media evolutions are driving new investment rationales. This presents an opportunity for regional media players to redefine their business models, explore high-quality local content investments, and compel global players to reassess their presence in the region.
The emergence of new pay-TV and over-the-top (OTT) players is reshaping a market traditionally dominated by free-to-air, direct-to-home (DTH) broadcasting. GCC countries are making substantial technology investments to support OTT platforms, with broadcasting networks such as influx, StarzPlay, Istikana, and Netflix offering subscription-based video-on-demand (VOD) services globally and locally.
However, the region remains relatively more restricted compared to other parts of the world. Traditional carriage-only deals limit broadcasters and operators, impacting their freedom to optimise revenues, particularly in areas like creativity in content creation and ad insertion.
The COVID-19 pandemic significantly impacted the media and entertainment industry in the region. While digital consumption witnessed an upward trend as people spent more time at home, restrictions on outdoor activities posed challenges, especially for sectors like movie theatres.
The subscription video-on-demand (SVOD) model has revolutionised the way audiences access and enjoy a comprehensive array of content. Operating on a set subscription fee, typically billed monthly, this business model can be likened to an “all-you-can-eat” buffet, granting subscribers uninterrupted access to a vast library of ad-free content.
SVOD has emerged as the predominant monetisation strategy within the Over-The-Top (OTT) business landscape. Adopted by major OTT providers such as Netflix, Amazon Prime Video, Hulu, and newer entrants like Disney+, Apple TV+, and HBO Max, among others, the SVOD model stands out as the most lucrative avenue for content distribution.
In response to the surging demand for mobile streaming, telecom companies have introduced innovative solutions to enhance user experience and optimise data usage.
For subscribers of Apple TV channels, the on-demand content experience is taken to the next level. Users can not only watch their favourite shows online but also download them for offline viewing via the Apple TV app. Additionally, Apple’s Family Sharing feature allows up to six friends or family members to share Apple TV channel subscriptions using their individual Apple ID and password. The inclusion of such perks in the subscription model is anticipated to attract more consumers, potentially leading to increased market share for SVOD providers like StarzPlay.
In Saudi Arabia, digital formats have become integral to media consumption, ushering in a new era of accessibility and convenience. The proliferation of devices capable of handling Over-The-Top (OTT) platforms and digital media, coupled with faster internet access, empowers users to explore a diverse range of media content tailored to their preferences. This transition marks a substantial shift from traditional to digital media, with the nation experiencing a remarkable surge in media consumption.
The growth trajectory is significantly propelled by the emergence of OTT and digital media giants such as Netflix, Amazon, and Intigral, reshaping how audiences engage with entertainment. As the preference for watching movies on OTT platforms grows, especially through home theatre and advanced audio systems, the market sector is poised for sustained expansion in the upcoming years.
The burgeoning internet usage has disrupted traditional channels of digital media distribution and consumption. Enhanced network coverage and cutting-edge communication technology, including 5G/LTE, have resulted in increased data usage across the nation.
Saudi Arabia’s digital entertainment landscape is further enriched through platforms like Jawwy TV and Dawri Plus, offering key options for the digitally savvy public. These digital media products cater to a large millennial user base, providing welcoming user interfaces and distinctive digital content accessible across various platforms. Anticipating a growing demand for enriched entertainment content, users are actively seeking easily available and immersive digital experiences in the coming years.
Notably, the digital media content players in Saudi Arabia play a pivotal role in supporting the country’s entertainment sector growth. Positioned as a major pillar of the Vision 2030 plan, these digital innovators contribute significantly to the vision of building a knowledge-based economy, aligning with Saudi Arabia’s strategic goals for the future.
The Middle East Media and Entertainment Market stand at the forefront of intense competition, characterised by the presence of significant regional and international players. As the industry anticipates growth within the foreseeable time frame, the heightened competition is expected to escalate. Notably, a discernible degree of consolidation is evident, with a select few firms exerting control over a substantial portion of the market. Among the key players shaping the landscape are Arab Media Group, Abu Dhabi Media, Orbit Showtime Network, and Intigral Inc.
In a notable development in April 2023, the Authority of Social Contribution Ma’an introduced a mobile app, Abu Dhabi MAAN. This app, available for download on both Apple and Android smartphones, facilitates contributors in swiftly and easily pledging their support to preferred projects. Forming an integral part of the Abu Dhabi Gives Back initiative, the app encourages the Abu Dhabi community to contribute significantly during Ramadan. The initiative aims to create a lasting social impact by supporting social goals aligned with individual priorities and values.
March 2023 witnessed a strategic move by OSN, reinforcing its market-leading position. OSN extended and expanded its partnership with Warner Bros, solidifying its unbeatable range of programming and best-in-class offerings. This multi-year licensing agreement includes components with Discovery, featuring an exclusive licensing agreement with HBO. This development establishes OSN as the exclusive home for HBO programming throughout the MENA region.