Pay-TV strengthens in MEA region

27 January 2011

CAMBRIDGE: The Middle East and Africa have the fastest-growing pay-TV markets in the world with subscription rates expected to treble between 2011 and 2015.

According to a Pyramid Research study, subscriber numbers will achieve a compound growth rate of roughly 11% a year over the next five years.

Revenues for the sector will double, while overall penetration will achieve a compound annual growth rate of 9%, with pay-TV services reaching 16% of homes in the region by 2015.

Pyramid Research also pointed out that still more "aggressive" increases were possible if certain barriers to growth - including weak "last mile" infrastructure, a lack of competition and a lack of content - were overcome.

Pay-TV services currently experience high costs and limited reach in the region.

But Pyramid Research pointed out that infrastructure problems can be sidestepped by mobile networks replacing fixed-line networks in some areas.

"The lack of fixed infrastructure and the dominance of mobile access in most African countries constitute a huge opportunity for mobile operators to become the main pay-TV providers in Africa in the long term," Mehdi Ben Said, senior analyst at Pyramid, added.

"Over the next five years, as regulatory changes introduce more competition into the sector and technology platforms advance, Pyramid expects the region to begin to overcome the many obstacles that have inhibited its growth in the past."

Figures from 2009, cited by RapidTV, show that the region's pay-TV markets remain relatively undeveloped by global standards.

Pay-TV penetration is just over 5%, while spend on pay-TV and mobile video made up 0.14% of total GDP, down from an average of 2% for all emerging markets.

Nielsen data reported by Warc News last month shows that pay-TV subscriptions are much more widespread in Latin America, standing at 9% of Brazil's households, 33% in Mexico and 51% in Chile in 2009.

Data sourced from Pyramid Research/RapidTV/Nielsen; additional content by Warc staff