Kingdom such as MBC Group , Rotana , and Asharq .” MARKETS . Robert Lakos , a long-standing consultant in MENA TV and currently working on Eutelsat ’ s Sat . tv project to improve the FTA TV experience for the mass satellite market , has recently visited three key non-Gulf markets : Algeria , Morocco and Egypt . Lakos says these are three of the biggest TV markets of MENA in population size , and all three have traditionally been 100 % satellite centric . “ It is clear that these markets are starting to diverge . The important factor that separates them is the availability of affordable broadband .”
“ Internet delivery of video continues to grow , but it is quite uneven . For example , in Egypt , because the vast majority of the population still lives in neighbourhoods that are not served by fibre , their default broadband connection is cellular , 3G , 4G or 5G . These cellular plans have data caps . That means most people watch video through their phones for the first week or two each month until they reach the cap . After that it ’ s back to satellite . Of course , a wealthy few can afford to pay for larger data packages but that ’ s not an option for most people .”
“ TV viewing behaviour used to be remarkably homogenous across the huge MENA region . It used to be Free To Air ( FTA ) satellite for everybody except a small wealthy niche that could afford high priced Pay TV packages . That has changed with the easy availability of pirate IPTV services . FTA satellite still accounts for the overwhelming majority of video viewing hours , but younger viewers have migrated much more towards pirate streaming especially in countries where unlimited broadband is affordable ,” Lakos adds . ECOSYSTEM . He explains why the MENA TV pattern is different to the rest of the world . “ For many years we ’ ve bemoaned the poverty of the MENA TV ecosystem . Everywhere else in the world the main sources of revenue for TV are licence fees , advertising revenues and subscription fees . That ’ s what pays for new content production . But in MENA , pay-TV revenues are undercut by the dominance of piracy , and advertising revenues are undercut by the absence of TV ratings along with the inability to deliver locally targeted advertising . These problems persist – if anything the prevalence of piracy is getting worse – but now there ’ s a dynamic that huge new revenues are being generated by the consumption of TV , but that revenue is going to the telcos that are supplying bandwidth . But none of that new bandwidth revenue is feeding back to content production .”
As for the MBC IPO , Lakos puts the event into perspective . “ The IPO prospectus that MBC released a few months ago provides a lot of great detail on MENA TV markets . Total industry revenues from TV advertising were under $ 900 million in 2022 . Saudi Arabia , UAE and Egypt accounted for more than twothirds of that amount which leaves a paltry $ 100 million to be divvied up among large countries like Morocco , Algeria and Iraq which together have a combined population of over 110 million people ,” he advises .
“ This is far lower than it should be considering disposable incomes and population sizes . Add to the fact that MBC claims to take in about 30 per cent of that MENA total and we ’ re left to do the maths as to how little ad revenues are left over to be divided amongst the hundreds other TV channels serving this region . The ‘ bottom line ’ here , the advertising revenues for TV in this region should be far , far greater than they are . This lack of revenues impacts local content production .” DILEMMA . Lakos also explains the piracy dilemma . “ Video piracy has been rampant for many years but I ’ ve seen two developments during the past year that make me say that piracy has gotten significantly worse . First off , the satellite services of both beIN Sport and OSN ( Orbit-Showtime ) are now widely hacked using Internet Keyword Sharing . A year ago , those two services were available through illegal pirate IPTV , but not direct from satellite . That means more consumers now have cheap and easy illegal access to premium sports and entertainment that has been produced for the MENA markets or at least adapted to it .”
“ Also during the past year the pirate IPTV services have increased their quality and range of branded content including popular movies and series from Netflix , Amazon Prime , Apple TV , etc . MBC ’ s IPO prospectus notes that as of end 2022 Netflix had only 2.2 million paying subs in MENA – no doubt that figure has grown in the past 18 months , but also no doubt that the widespread availability of popular Netflix content on the pirate IPTV platforms is going to make it hard for them or any other legitimate player to achieve critical mass in this region . And no , in my opinion 2 million subs is not “ critical mass ” in a region with over
400 million ‘ TV-holic ’ consumers ,” he states . “ MBC documented their own efforts to introduce viewer measurement and targeted advertising and the fact that this should help them grow their ad revenues going forward . This progress is long overdue and it is really encouraging to see the region ’ s leading broadcaster taking an active role in moving it forward . In addition to the efforts of MBC I am aware of several smaller scale projects unrelated to MBC for viewer measurement and also for targeted advertising . If these projects can get traction then that will be very positive for the smaller broadcasters as well as other upstream beneficiaries of the ad revenue pipeline . But can they get traction ? They should , but I think we ’ ll need one or two of the bigger stakeholders in the video landscape to join forces and put some serious money behind these projects in a way that drives towards MENA-wide [ measurement ] standardisation .” CHALLENGE . But Lakos says that despite these efforts , there is a need for what he describes as an “ honest acceptance ” of how solidly implanted piracy is across the MENA region . “ If legit services cost quadruple the price of piracy but offer only a quarter of the content of the piracy platform then forget it , piracy will continue to dominate . MENA consumers act more-or-less rationally and they see the current legit pay-TV offerings – whether beIN , OSN , Netflix or StarZ – as a bad deal compared to what piracy offers them . There are no technical counter-measure silver bullets that can overcome this . We need a pay-TV operator to offer a service with is both better and cheaper than piracy . That ’ s a tough challenge but whoever pulls it off will be the big winner of TV in MENA .”
Lakos is closely involved in the establishment of Eutelsat ’ s Sat . tv project . He says good progress is being achieved . “ Eutelsat created Sat . tv to improve several aspects of the end-user ’ s experience with watching FTA satellite TV . In particular we fixed navigation of channels and added in a really cutting-edge way to browse the huge selection of content by providing programme level metadata . So for example , with one touch on the remote control , you get a grid showing thumbnail images of all the movies currently playing across all the FTA channels at the NileSat – Eutelsat 7-8W hotspot .”
“ It ’ s a staggering amount of good content – more than a dozen movies at any given time . Arabic language drama series is an even richer genre with several dozen to choose from . But the feature really comes into its own with genres like cooking shows or kids programmes which tend to be spread out more thinly across dozens of channels . There ’ s really no other way for the consumer to get an instant overview of all the content from a specific genre spanning 700 + TV channels . These Eutelsat services are
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