What challenges and opportunities do you see for OTT content in the MENA region?
There are quite a lot of hurdles to be overcome to enable growth but I think the fundamentals are there. We have a very young and digital savvy population; Saudi Arabia is the number one country in the world when it comes to YouTube consumption per capita, so people are very much used to watching video online, on their smartphones and their tablets. Smartphone penetration is also very high in this region so a lot of the fundamentals are there.
There are three big challenges though: One is getting people into the mind-set to pay for content in a region where people generally haven’t paid for content; secondly there’s the ongoing issue of pirated content available freely and unfortunately it’s still seen as socially acceptable.
The third main thing is the cable connection. Connectivity is very important but we are very fortunate to be in a region where internet connectivity tends to be pretty good. Mobile connectivity is good, combined with relatively low data rates in many countries.
Most parts of North Africa have among the lowest data rates in the world so that really enables people to consume video on mobile networks as well. In the Middle East, Saudi Arabia also benefits from low data rates. A further challenge is there isn’t really a culture of using credit cards in this region, especially online.
Does Netflix face a challenge catering for such a diverse regional population in the MENA region?
That’s a fair point although I think the Pan Arab content is working increasingly well. Historically Egypt and Syria were big producers for whole region, although now lot of production takes place in Lebanon. A lot of content is produced in classical Arabic that appeals to the whole region. Turkish productions, which are either dubbed or subtitled, are also very popular in MENA. So it is a diverse region but there is content that appeals across the Middle East and North Africa.
What are your views on content in the region? How do you think Netflix might perform in terms of regional content?
Content is a big business. Netflix’s flagship series is House of Cards and that is what started everything for them in the US. They spent a lot of money on it and it was a big gamble. If House of Cards had failed Netflix might not be the same company it is now. They built on that success and they have gone on to produce other series that have been successful.
If Netflix gets a couple of hits in the Middle East it will give them some momentum and they can build on that, but if their original content in the Middle East doesn’t work out then who knows if Netflix will continue to invest here. Maybe they’ll decide to quit this area and put their money and attention elsewhere.
What are the keys to success for OTT video players?
Just making the experience very simple for the customer, especially in regions like the Middle East. Charging $10 per month via a credit card with a one month contract - it’s a challenge to make that work if you want to go for the mass market in this region.
What we’ve seen in other markets, for example with iflix which is based in Malaysia and operates across Asia, is a greater focus on an emerging markets profile; much lower price points and much shorter durations. They’ve been very successful and they’re coming to this region as well.