OTT VIDEO POTENTIAL IN MENA: THREATS AND OPPORTUNITIES FOR TELECOMS OPERATORS

Transcription

1 ETISALAT TELECOMS SUMMIT 2016 BUILDING BLOCKS FOR SUCCESSFUL OPERATOR STRATEGIES OTT VIDEO POTENTIAL IN MENA: THREATS AND OPPORTUNITIES FOR TELECOMS OPERATORS NOVEMBER 2016 KARIM YAICI

2 The TV and VoD markets are evolving and transforming significantly, driven by four main factors 2

3 The TV and VoD markets are evolving and transforming significantly, driven by four main factors 3

4 The TV and VoD markets are evolving and transforming significantly, driven by four main factors 4

5 The TV and VoD markets are evolving and transforming significantly, driven by four main factors 5

6 Free satellite services and piracy pose challenges to the adoption of pay-tv services in MENA High impact Illegal access to non-local DTH and OTT services Satisfies needs of many consumers in MENA Medium impact Sporting rights, particularly for football, are important in the Middle East IPTV-driven, eroding satellite TV s stronghold Low impact Pan-regional (Arabic) content is widely available 1 ASO = Analogue switch-off (the migration of all analogue broadcasts to digital transmission). Free or illegal options particularly in North Africa 6

7 Broadcasters and content distributors have led OTT video in the ME, but independent providers are challenging this [1] Category of players Name of company Production/ aggregation Distributor Name of OTT platform (year of launch/entry to ME) Regional MBC Shahid (2011) Starz Starz Play (2015) Foreign Sony India Sony Liv (2013) Zee DittoTV (2012) Eros Int. ErosNow (N/a) OSN GO Online TV (2014) Pay-TV bein bein Sports Connect (2014) providers Selevision Seevii (2016) Telcos and pay-tv providers Regional Foreign Du Du View (2014) Etisalat elife ON Mobily mview (2013) STC My Invision (2012) Icflix Limited Icflix (2013) Istikana Limited Istikana (2011) Spuul Planned Spuul (2012/13) Hungama Limited HungamaPlay (2015) Netflix Limited Netflix (2016) 7

8 Broadcasters and content distributors have led OTT video in the ME, but independent providers are challenging this [2] Category of players Name of company Production/ aggregation Distributor Name of OTT platform (year of launch/entry to ME) Regional MBC Shahid (2011) Starz Starz Play (2015) Foreign Sony India Sony Liv (2013) Zee DittoTV (2012) Eros Int. ErosNow (N/a) OSN GO Online TV (2014) Pay-TV bein bein Sports Connect (2014) providers Selevision Seevii (2016) Telcos and pay-tv providers Regional Foreign Du Du View (2014) Etisalat elife ON Mobily mview (2013) STC My Invision (2012) Icflix Limited Icflix (2013) Istikana Limited Istikana (2011) Spuul Planned Spuul (2012/13) Hungama Limited HungamaPlay (2015) Netflix Limited Netflix (2016) 8

9 Broadcasters and content distributors have led OTT video in the ME, but independent providers are challenging this [3] Category of players Name of company Production/ aggregation Distributor Name of OTT platform (year of launch/entry to ME) Regional MBC Shahid (2011) Starz Starz Play (2015) Foreign Sony India Sony Liv (2013) Zee DittoTV (2012) Eros Int. ErosNow (N/a) OSN GO Online TV (2014) Pay-TV bein bein Sports Connect (2014) providers Selevision Seevii (2016) Telcos and pay-tv providers Regional Foreign Du Du View (2014) Etisalat elife ON Mobily mview (2013) STC My Invision (2012) Icflix Limited Icflix (2013) Istikana Limited Istikana (2011) Spuul Planned Spuul (2012/13) Hungama Limited HungamaPlay (2015) Netflix Limited Netflix (2016) 9

10 OTT players have formed partnerships with operators and vendors to increase their reach and facilitate payment OTT value chain in the Middle East Broadcasters and movie producers Local or regional Foreign Access provider or distributor Device manufacturers OTT platform (Arabic and local content) OTT platform (Western or niche content) OTT providers Distribution partnership Pay-TV operators Telcos/IPTV operators OTT platform (local and foreign content) OTT platform (local and foreign content Device manufacturers Device partnership Billing and discoverability partnership Content partnership No direct OTT presence Indian OTT players Local and other foreign players 10

11 UAE: OTT will thrive and attractive IPTV-based bundles from Etisalat and du will continue to dominate PAY-TV MARKET LEADERS, % 6% 14% 22% 61% 24% 62% Etisalat du OSN (DTH) bein (DTH) IPTV DTH OTT PAY-TV MARKET KPIs 2021 OTT DTH IPTV 78% 40% $ 22.2 PER MONTH 11

12 The OTT video market is a challenge and a revenue opportunity for CSPs for a wide range of reasons 44% of consumption by young people in MENA is on mobile, tablet or computer Falling voice ARPU Low penetration of data services Flat data ARPU Need to grow subscriber base to maintain good market capitalisation Commissioning unique TV series (e.g. Icflix) Risk of cannibalising IPTV Likely to continue to use OTT on-demand content when they settle down, Horowitz Research, Investopedia, Viacom Supporting growing OTT video usage Supporting wider range of devices which users watch OTT video Need to adopt new business models to broaden subscriber base Entering new markets where high download speeds are not readily available 12

13 CSPs have several options for turning the growth of OTT video consumption to their advantage Cost control Revenue generation 3 2 Launching OTT video services to extend reach and revenue Offering solutions to providers of OTT video services 1 Partnerships with OTT video providers Competition Co-operation 13

14 CSPs can partner with OTT video providers to increase ARPU and customer loyalty 1 OTT video provider partnerships with CSPs, by region 14

15 OTT video providers can use CSPs to make content more discoverable, but CSPs need to extend their capabilities 2 CSPs features and capabilities and their influence on the OTT video value chain Increasing opportunity for CSPs and appeal of CSPs to OTT video providers Subscriber base Basic service support Enhanced user QoE Enhanced revenue 15

16 CSPs can provide CDN services or partner with CDN providers to support OTT video providers 2 Simple CDN and CSP network delivering OTT video OTT video provider Specialist CDN provider Fixed ISP (CSP) CSP CDN Fixed broadband access network Mobile ISP (CSP) Mobile broadband access network Users 16

17 CSPs may use OTT video to enhance an IPTV or pay-tv service, or may offer OTT video as a standalone service 3 OTT video options to enable CSPs to extend reach and generate new revenue streams OTT video options for CSP Core CSP service (fixed and mobile broadband) Core CSP service (same country) Core CSP service (different country) Core CSP service 1 (same country) IPTV and pay TV Extend TV service (TV everywhere) Additional OTT video Standalone OTT video and pay-tv lite Standalone OTT video (foreign markets) Third party CSP 17

18 Key takeaways 1 The pay-tv subscription market in MENA will grow significantly Much of this growth will come from IPTV, which will put increasing price pressure on satellite providers. The market overall will compete with illegal alternatives, and free satellite services. 2 OTT video will have a mixed impact in the region Demand will be constrained to Gulf countries (Qatar and the UAE, in particular) with offering provided by broadcasters, IPTV operators and a few independent OTT players. 3 The growth of OTT video services provides CSPs with an opportunity to support consumption and develop new revenue streams But this requires a diverse set of capabilities to cater to all OTT video subscribers and OTT providers needs. 18

19 Contact details Karim Yaici Senior Analyst Boston Tel: Cambridge Tel: +44 (0) Madrid Tel: Manchester Tel: +44 (0) Dubai Tel: +971 (0) Milan Tel: Dublin Tel: +353 (0) New Delhi Tel: Hong Kong Tel: Paris Tel: +33 (0) London Tel: +44 (0) Singapore Tel: linkedin.com/company/analysys-mason youtube.com/analysysmason analysysmason.com/rss 19