Digital entertainment platforms have seen significant growth in the Middle East.
With internet penetration more than doubling in just 10 years, reaching 54% of the population in 2019, digital streaming services for music, video and gaming have been gaining popularity in the region. Moreover, the COVID-19 pandemic spurred this unprecedented growth. With the release of vaccines and the world planning to “return to normal” the growth of streaming services will certainly readjust to a more “normal” pace although we expect strong growth for years to come in this relatively unsaturated market.
Three types of players compete in the Middle Eastern video and music platform space.
- Global giants like Netflix, HBO, Lionsgate (Starz), Amazon Prime, Apple TV, YouTube, Deezer and Spotify.
- Traditional regional entertainment leaders such as MBC Group (with Shahid+) and OSN
- Local players funded by savvy investors such as icflix or Anghami
So what lessons can brands learn from the experiences of these players?
- Beware of pirated content
- Consider a strategic local partnership
- Adapt to local preferences
- Look beyond the end user
Beware of pirated content
The Malaysian based video platform Iflix learned this the hard way. In 2017, Iflix entered into a joint venture with Zain, a Kuwaiti based telco, and established its HQ in Dubai from where it launched Iflix Arabia. Its production was localised, its content was appreciated, and it was able to make a strong impact with its online original comedy “Tough Luck”. But while the platform appeared to be successful, it suddenly exited the Middle Eastern market in 2019. Why? Common piracy practices amongst the down-market audience targeted by the platform and the loosely enforced anti-piracy laws in the region. Despite the fact that the brand was able to gain awareness in the market, its customer growth rate suffered due to alternative illegal channels that provided the same content for free. Brands should look to understand not just its target audiences, but the context it is planning to enter.
Consider a strategic local partnership
The power of a successful partnership can be invaluable even for global industry giants looking to tap into an established customer base. In 2016, when Netflix launched in the Middle East, the brand suffered from a lack of localisation which resulted in a relatively weak entrance. A year later, the company announced a partnership with OSN, a leading paid subscription television service in the Middle East. OSN customers were then able to access Netflix’s content library via the OSN Box and enjoy the flexibility of paying for their Netflix subscription via one consolidated OSN bill. That move allowed Netflix to improve its brand penetration in the region, boosting its consideration amongst OSN subscribers, an audience similar to the one targeted by Netflix itself.
In April 2020 the newly launched Disney+ took a slightly different approach by announcing that it would not enter the market as a standalone service but partner instead with OSN as its exclusive distributor in the region. While this partnership appears to be more balanced it could still open the way for Disney+ to make a strong standalone entrance in that market when the time comes.
Adapt to local preferences
Missteps can happen to any global company entering a market without understanding the local culture and more so in the Middle East given the constant tension between tradition and modernity. Netflix experienced this with its first Arabic original series Jinn. While the script, acting and direction received their fair share of criticism, what was supposed to be a supernatural teenage drama came seriously under fire for its foul language, scenes of physical intimacy, and forced Arabic accents. While religious groups attacked the show for breaching public morality, reactions across social media were also scathing.
Anghami, a leading regional Lebanese based music streaming application, claims that understanding local preferences led to its success and will keep the global newcomers at a distance. The brand studied local user behaviours, needs and preferences. Moreover, by partnering with telecom operators, it allowed Middle Eastern users to bypass the online payment requirement and subscribe directly through their operator. When the founders noticed that people in the region were frequently sharing music over WhatsApp, it adapted its application to make it more social. In essence, localising a brand is not only about the content provided but also about adapting the entire user experience to the specificities of the Middle Eastern region.
Look beyond the end user
Brands should understand that offering value to all their stakeholders and not only their end users is important for sustained success in the Middle East. In the world of digital entertainment platforms, this is particularly important as beyond the platform itself, users are looking for a catalogue that contains the best artists or series. Therefore, a lot of work is needed to attract the best talents and productions. While artists and production companies consider different parameters before committing to a platform, global players such as Spotify or Netflix benefit from an advantage that regional digital entertainment platforms are not able to offer; worldwide exposure.
Unfortunately, Arab movies have long struggled to travel beyond the region, but global platforms are giving Middle Eastern filmmakers and artists a chance to gain visibility abroad. In June 2020, Netflix released 44 iconic and contemporary Arabic films at a global level, giving a serious chance to the Arab film industry to reach homes across the globe. Therefore, it might be time for local players to look for ways that will allow them to extend their regional reach to the world.
To conclude, whilst the Middle East is different from the Western market, it is not as impenetrable as perhaps China or Russia. Though it has unique challenges, the lessons learned from the global player’s entry should enable new brands to take advantage of this nascent market brimming with opportunity.
Article first published by Brandberries on www.thebrandberries.com.