Online video subscribers to grow to 180 million in 2019

The number of subscription-based online video users will grow to 180 million in 2019 from over 100 million currently, said Ovum.

Ovum says Middle East will be one of the drivers.

Current spending levels for ubscription-based online video are low at 5 percent of total global OTT video spending. The launch of US pay TV network Starz is expected to prompt competition to enhance their focus in Middle East.

Subscription based video streaming revenues in Middle East will grow over 25 percent annually to 2019, accounting for over 70 percent of all OTT revenues in the region. More than 1 million Middle Eastern subscribers will be watching streaming services, complementing a growing overall market for visual entertainment.

Ovum said video streaming services can immensely gain from two-thirds of Arab population which is under 30 who are eager to enjoy entertainment. Despite the availability of free and pay-TV sectors, there is a dearth of quality Western TV and streaming movie content at the low prices. Current SVOD services in Middle East overwhelmingly originate from telecoms, pay TV operators, and broadcasters.
OTT SVOD annual net additions in Middle East during 2012–19
Ovum predicts that non-native services will increase competition in this space and the local services looking to compete will have to invest in original content, a constantly improving user experience, and competitive pricing to maintain market share.

The acquisition of exclusive content is crucial. Whereas live sports will continue to attract the biggest audiences in the Middle East, exclusive movies and high-end dramas can significantly differentiate individual streaming services.

Subscription streaming can target narrow interest groups and monetize niche native and expatriate audiences more effectively than traditional distribution channels whose economics tend to rely on larger audiences.

Credible subscription streaming services with strong content relationships will be well-positioned to grab market share in a rapidly growing sector over the next five years.

Tony Gunnarsson, senior analyst in Ovum’s TV Practice, said: “In Western markets, SVOD is now a mature business. That is why US broadcasters such as HBO and CBS have launched direct-to-consumer SVOD services.”

There will be competition because Netflix is currently committed to achieve global coverage by the end of 2016 with launches in Spain, Portugal, Italy, and Japan planned by the end of 2015. Starz Arabia is expected to thrive in the MENA region due to the quality of its catalog and its timing. Netflix will pose challenges to Starz Arabia.

[email protected]