The research firm said that MENA pay TV subscriptions fell 21% percent to 4.2 million in 2017, with the growth reversal linked to blocks on beIN Media – something IHS warned could “seriously affect the future growth prospects of pay TV in the region”.
“As Saudi Arabia, Egypt and Bahrain severed political ties with Qatar, the three nations subsequently also blocked beIN Media Group from their markets,” said the report. “A similar decision was taken in the United Arab Emirates, but the market was later reopened to beIN Media pay TV packages.”
“While the precise amount of revenue damage to beIN Media from this blockade is unclear, IHS Markit estimates that it may have cost the company as much as US$200 million in lost subscriptions last year, especially because Saudi Arabia and Egypt were the two largest markets for beIN Media satellite TV packages.”
While pay TV subscriptions fell, the SVOD market continued to thrive with over-the-top subscriptions reaching 1.38 million – the first time the market has exceeded 1 million subscriptions.
The IHS report found that the number of OTT subscriptions amounted to one-third of the number of pay TV subscriptions in 2017. OTT’s comparative share is tipped to increase to 50% in 2020 and 67% in 2022.
OTT subscription revenues grew 44% year-on-year in 2017 to exceed US$100 million and is expected to reach US$500 million in 2022, growing at a compound annual growth rate of 36.6%.
“The pattern of growth will be determined by the decisions of the main players – primarily by their strategies for content, localisation, partnerships and pricing,” according to the report.
“Starz Play was the online subscription services market leader, in both subscriptions and revenue, followed by local service Shahid Plus and Netflix. Starz Play’s success was based on a smartly implemented policy of partnering with local telcos and IPTV networks, to offer payment solutions accessible to the vast majority of people in the region.”
Starz Play last week claimed to have more market share in MENA than rivals Netflix and Icflix, citing the IHS research. The SVOD player said it accounts for 26% of the regional OTT market, compared to Netflix’s 16% and Icflix’s 11%.