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Streaming Services Surge in Saudi Arabian Peninsula

Pay TV and video streaming services are seeing double digit growth in the Middle East and North Africa, where they are relatively new. And digital is making big waves in Arab pop culture.

But it’s early days. And most Arab producers are not yet feeling the fallout from new platforms competing for eyeballs in a region where two-thirds of the population is under 30.

It’s clearly a highly wired and digital savvy demographic. In December YouTube chose Dubai Studio City to launch its 10th YouTube Space, a 10,000-sq.-ft. incubator studio for young local content creators in a region with a vibrant YouTube community, second only to the U.S in terms of watch time.

Saudi Arabia, where movie theaters are banned, has the highest YouTube consumption in the world. A female-empowerment video recently uploaded in Saudi featuring three women in black niqabs and bright dresses skateboarding, playing basketball, and driving bumper cars rapidly got more than 3 million views and sparked a debate that made global headlines. Titled “Hwages,” which means concerns, it was directed by Majed al-Essa at Riyadh-based 8ies Studios.

Saudi Arabia is also the No. 1 market for for Starz Play Arabia, the first Starz-branded SVOD service outside the U.S., “both in terms of active base as well as growth,” Starz Play Arabia CEO Maaz Sheikh told Variety in a recent interview.
The TV landscape is going through a major transition. Last year Qatar’s beIN Media Group expanded its pay-TV offer, branching out from sports into entertainment, prompting Dubai-based OSN, which was until then the region’s single entertainment pay-TV player, to respond by launching more channels and inking more volume deals with the U.S. studios. BeIN last year also bought U.S. studio Miramax.

IHT forecasts that primary pay-TV subscribers in MENA will grow 31%, from 4.95 million in 2015 to 6.46 million in 2020. That would still be less than 10% of all TV households, way less than pay-TV penetration in many South and Southeast Asian countries, but still significant.

In the SVOD sphere Starz Play launched in MENA in 2015, beating Netflix to the punch. It seems to be gaining some traction, recently touting more than 1,500 new signups a day for a content offer that is heavy on Hollywood fare. Digital media growth in the region is forecast by PwC at 17.6% between 2016 and 2020.

But while local content all over the world is a key driver for new platforms, in the Arab world the percentage of homegrown content playing on them is scarce, and changing that is going to be tough.

“[Free-to-air] broadcasters like to take the pay-TV rights and SVOD rights themselves,” says producer Mohamed Hefzy, who notes that for Arab films the only alternative is to just sell the pay-TV window, “which is never going to be worth as much as a free-TV deal.” Egypt remains the Arab world’s film and TV production powerhouse.
So far Netflix has bought a handful of Arab titles, including Jordan’s Oscar-nominated “Theeb”; Emirati thriller “Rattle the Cage”; and Palestinian race-car drivers docu “Speed Sisters,” which First Run Features released theatrically in the U.S. in February.

“Only a few films [are purchased by Netflix] in a whole year; that’s not enough,” says Perihan Abou-Zeid, an Egyptian entrepreneur who runs pioneering Arab cinema SVOD platform MoviePigs, which is active in North America. Launched last year, it is backed by U.S. tech investor Dave McClure.

Though Abou-Zeid does not see her niche micro-platform as a competitor to Netflix, she points out that unfortunately “this competition exists” in the perception of Arab producers and distributors who often “wait and wait” hoping to score a Netflix deal before they make a title available to Movie Pigs, where in most cases the title would get more visibility, she claims.

“An Arab film would never get on the Netflix homepage,” she notes. “If you are looking for viewership and popularity [for your Arab movie] we can do a lot more for you!”

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