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The video industry in the Gulf Cooperation Council (GCC) region will generate $2.1 billion in revenue by 2026, after it grew by 11 percent year-on-year in 2021, according to Media Partners Asia (MPA).
The growth in video on demand is expected to continue, while pay-TV and free to air TV will contract further.
The industry, which encompasses subscription video on demand (SVOD), advertising-based video on demand (AVOD), as well as pay-TV and free to air (FTA) content, saw its GCC revenue grow to $1.9 billion in 2021.
Factors including the scaling of Arabic language content are expected to contribute to further growth, the report said.
Last year, SVOD accounted for 23 percent of video industry revenues, AVOD 26 percent, which MPA said was bolstered by YouTube, Facebook and Snap content.
Online video revenues are projected to grow at a compound annual growth rate (CAGR) of seven percent to reach $1.4 billion by 2026, with SVOD contributing 31 percent and AVOD 34 percent, according to a new report by MPA.
Meanwhile, the pay-TV sector generated $631 million in 2021, including wholesale fees generated by beIN and OSN, a decline of 10 percent on the previous year, and is expected to contract further to reach $436 million by 2026.
Advertising-funded terrestrial and satellite FTA generated $366 million in 2021, down three percent, and will fall further to $311 million in 2026, accounting for 15 percent of total GCC video industry, down 40 percent from 2016, MPA said.
Aravind Venugopal, vice president of MPA, which published the report GCC Video & Broadband Distribution 2021, said Expo 2020 and the FIFA World Cup in Qatar are both likely to cause a bounce back in advertising spend post COVID-19, but revenue is unlikely to return to 2019 levels.
“During 2021, some of the momentum from COVID-19 which accelerated the adoption of online services, started to taper,” he said.
“While subscriber additions decelerated during 2021 as COVID-related restrictions eased, an increased content pipeline for SVOD platforms resulted in flat to marginal subscriber growth for most operators.
“In the medium term, the launch of new platforms and the increased scale and frequency of investment in premium content by SVOD players should drive future net new customer additions.”
Profitability remains a challenge, said Venugopal, with heightened competitive intensity, which will only increase as the beIN-owned TOD, Disney+ and HBO Max launch over the next 12-24 months.”
MPA Analyst and co-author Myat Pan Phyu (May) said investment in Arabic-language content production had started to scale up, driven by MBC-backed Shahid, Viu and streaming giant Netflix.
(Reporting by Imogen Lillywhite; editing by Brinda Darasha)
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