Middle East Media and Entertainment Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Middle East Media and Entertainment Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Middle East Media and Entertainment Market is expected to grow by registering a CAGR of 7.4% during the forecast period (2022-2027). The media and entertainment industry of the region is undergoing significant transformation. Cultural shifts among the region's young people have spawned considerable traction, and untapped demand for local Arabic content will spur regional media to grow considerably.

Key Highlights

• The media and entertainment (M&E) industry has been one of the first business sectors to steer digital disruption, and its transformation is far from over. As critical networks and studios continue to unveil their direct-to-consumer streaming facilities in 2021, players are likely to scramble to propose content libraries wide enough to both attract and hold customers, permitting and generating chances and opportunities for media and entertainment companies to re-aggregate their content libraries with a comprehensive collection of offerings, from music, video, and gaming services to ad-supported content.
• The increasing penetration of mobile internet services further supports the studied market's growth. For instance, according to GSMA, in 2021, the number of mobile internet users in MENA exceeded 300 million, with penetration expected to reach 50% of the population by the end of 2022.
• Social media usage has also been growing across Saudi Arabia, a trend of interest to agencies, brands, and media companies alike for advertisements. For instance, according to the World Association of News Publishers, people in the MENA region spend a lot of time on social media, averaging about 3.5 hours a day, across platforms.
• Moreover, paid and digital media evolutions have created new rationales for investments. These changes give regional media players a chance to reset their business models, explore investments in high-quality local content, and offer global players, in particular, a reason to re-evaluate their presence in the region.
• Furthermore, the new pay-tv and OTT players are increasingly populating the market dominated by free-to-air, direct-to-home (DTH) broadcasting until now. GCC countries are significantly investing in upgrading technology due to various nations' broadband initiatives to support OTT platforms. An increasing number of broadcasting networks such as influx, Starz Play, Istikana, and Netflix, operating globally and locally, offer subscription-based VOD services for viewers in the region.​
• However, the region is relatively more restricted compared to other parts of the world. It's still traditionally set up as carriage-only deals, which means broadcasters and operators do not have the full freedom to optimize revenues from areas such as creativity in terms of content creation and ad insertion.
• Owing to the COVID-19 pandemic, the media and entertainment industry in the region suffered significantly. Although the consumption of media and entertainment content in digital mediums witnessed an upward trend as people were spending more time at home. However, the restriction on outdoor activities significantly impacted the business of a section of the media & entertainment industry, such as movie theaters.

Key Market TrendsDigital Music & Subscription Video-On-Demand (SVOD) to Grow Significantly

• With over two-thirds of the population younger than age 35, OTT platforms have increased focus in the country by enabling users, especially youths, to watch videos and listen to music. According to Saudi Aramco, the youth population is projected to grow by 25.2% to become one of the youngest globally by 2030.
• As subscription video-on-demand (SVOD) allows the usage of an entire library of content at a fixed subscription rate, typically every month their demand has increased significantly over the years. Considering the growing demand, some of the biggest players in the OTT market, such as Netflix, Amazon Prime Video, and Hulu, and new entrants like StarzPlay, and Turkcell are focusing on expanding their presence in the region.
• Middle Eastern countries are also experiencing partnerships between customer management service providers and SVOD service providers. For instance, in August 2021, OSN chose Evergent to power monetization and customer management for OSN's new streaming video service in the Middle East and North African region. Moreover, the company is the exclusive distributor of new Disney+ Originals in the Middle East and has long-term partnerships with major studios, including HBO, NBC Universal, FOX, Paramount, MGM, and Sony.
• Further, in September 2021, the Middle Eastern on-demand streaming service TenTime partnered with the technology outfit Accedo to help expand the availability of content on its SVOD service to connected TV platforms.
• Similarly, music streaming services have also taken center stage across the middle eastern music industry. Over the past few years, the region has witnessed significant growth in online listenership with increased customer adoption, technology, and partnerships, driving growth for music streaming platforms.
• In recent years, the Middle East region has witnessed multiple streaming services launch, from Netflix to Spotify, with more streaming service providers looking to enter the market. For instance, in September 2021, YouTube announced the launch of its paid Music and Premium services in Saudi Arabia, the UAE, and five other markets.

Saudi Arabia to Hold Significant Market Share

• Since removing the ban on cinemas a few years back, the entertainment sector of Saudi Arabia has witnessed remarkable growth. For instance, according to ITA, over the past five years, the country's entertainment industry has been granted about 2,189 new licenses, 1,809 new permits, and more than 2,500 events that drew over 80 million attendees through the end of 2021.
• Media consumption across Saudi Arabia is increasingly happening in digital formats. The rise in the number of devices capable of supporting digital media and OTT platforms and increasing internet access speed has provided users with an option to access the media content of their choice. According to the Information and Communication Technology Access and Usage Survey 2021, the percentage of individuals who used the internet during the last three months increased by 1.8% compared to 2020.
• Further, major OTT players adopt organic and inorganic growth strategies through innovations, portfolio expansions, partnerships, and acquisitions. For instance, in February 2021, Discovery announced a long-term partnership with Saudi telecom group's digital entertainment arm Intigral to provide broadcast and subscription-video-on-demand content to its flagship OTT service, Jawwy TV.
• In February 2021, Asharq News, a multiplatform economic and political news service, achieved a leap in delivering news content across multiple platforms by launching a mobile video live streaming format based on artificial intelligence. Moreover, it was the first in Saudi Arabia and only the second media entity globally to offer this service.

Competitive Landscape

The Middle East Media and Entertainment Market is highly competitive, with the presence of major international as well as regional players. The market presents opportunities for growth during the forecast period, which is expected to drive the competition further. With few players holding a significant share, the market has a detectable level of consolidation. Some of the major players operating in the market include Abu Dhabi Media​, Arab Media Group, Orbit Showtime Network​, and Intigral Inc.

• December 2021 - Cityneon Holdings, a global entertainment company based in Singapore specializing in unique, immersive, and large-scale experiences, signed a strategic partnership agreement with Qatar Free Zones Authority (QFZA) in Doha to establish a facility in Qatar Free Zones. The facility will cater to growing entertainment technology and experience markets in Europe, the Middle East, and Africa (EMEA).
• September 2021 - Abu Dhabi Media network Abu Dhabi, the UAE's leading public media services company, launched its new program cycle, featuring a variety of entertainment, social, and dialogue programs and businesses, focusing on delivering innovative content that meets listeners' interests and aspirations and focuses on interacting with them across digital platforms. The radio will also continue to broadcast its programs, which have gained listeners' permission, such as the entertainment program "sweeter Sabah," which introduces listeners to all the topics, news, and activities they care about through its various and renewed paragraphs.

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