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Traditional pay-TV providers losing ground to online TV
Published in The Saudi Gazette on 23 - 06 - 2016

The rapid growth of broadband, along with growing consumer demand and expectation, is driving competition between new entrants and traditional pay-TV platforms as they battle for the consumer's share of viewership. These changes have challenged the traditional business models that have dominated the pay-TV industry for the last 25 years. A new media landscape is evolving where traditional broadcasters have launched their own digital services as alternatives to the linear channels. This leads to a new digital phenomenon known as "cord-cutting".
Maaz Sheikh, CEO of Starz Play Arabia, said "Cord-cutting" refers to the process of replacing traditional satellite connections with a low-cost online subscription to watch movies and TV shows. It has previously been thought of as a largely US phenomenon, but it has been trending across Europe and Asia as well.
According to the latest survey conducted across six countries in MENA by the Northwestern University in Qatar, television is losing ground to the Internet as the viewing platform of choice in the Middle East and North Africa, with average TV audiences down by 5% since 2014. In contrast, the share of Internet users spending time online every day jumped 11% from 63% in 2014 to 74% in 2016. In the Middle East, more than 28% of the population is aged between 15 and 29. Representing around 108 million people, this is the largest number of young people to transition to adulthood in the region's history. Millennials aged 18-24 – a large and key demographic – are reducing their traditional TV minutes at a faster rate than the population as a whole. This is particularly true in the MENA region, where digital video consumption is one of the highest in the world, especially in Saudi Arabia on platforms such as YouTube, Facebook and U-Turn".
The battle between traditional TV and online TV services is already playing out with companies such as STARZ Play and Netflix entering the market to compete with traditional broadcasters. Significant investment, ground-breaking content deals and an ever-improving user experience will allow online service providers to make significant in-roads in the Middle East market by 2020. In addition, the entry of new players in the market will offer consumers more content choices in the format and price that they want.
There are three key drivers leading to the changing habits of TV consumption are Convenience since consumers no longer have to watch TV based on a set programming schedule, affordability and value for money with online services such as STARZ Play and Netflix that make premium television affordable for the masses with no long term contracts and completely ads free and the third key making premium and exclusive content available that is not available on traditional TV channels – including critically acclaimed series such as the STARZ Original production Black Sails or Showtime's Billions and latest movies in full HD," Maaz Sheikh added.
What is obvious is that the growth of new, low-cost offerings will continue to drive consumption of online content and services. The race is on to meet changing demands of consumers as broadband Internet and device penetration continues to increase in the region. — SG


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