When the young Emirati filmmaker Ali Mostafa was unable to find any realistic depictions of life in the UAE on the big screen, he decided to create one. Shot on location in the UAE, his 2009 film, City of Life, used an international cast to show the country’s diversity. Mostafa’s latest film, From A to B, was the first locally produced offering to open the Abu Dhabi Film Festival.
Mostafa is just one member of the burgeoning network of young media producers who are transforming the industry in the Middle East. The digitally adept younger generation is driving demand for local, targeted content – and also developing the skills to meet that demand.
Arab youth is bringing fresh creative talent to a Middle East media market that is poised to be one of the world’s fastest growing, with rapid digitisation, growth in population size and consumer spending far above the global average. The media sector is expected to grow annually by 7 per cent from 2014 to 2019, with the value of the market rising to $21.5 billion in 2019 from $15.5bn this year.
This evolution of media in the Middle East is being driven by four key cultural changes in consumer behaviour.
First, those who grew up with the internet, whom we call the Arab Digital Generation, will change the way that people both consume and create media. They are increasingly rejecting global content that has been repackaged for the region. Instead, they want content that speaks to their lives, experiences and perspectives. When they have not been able to find it, they have made it themselves. This impulse – and the ease of access offered by digital media – has led to a variety of digital content by young people, for young people.
Second, the growth of the media industry will be fuelled by premium Arabic content. Although Arabic speakers account for 5 per cent of internet users worldwide, less than 1 per cent of websites are in Arabic. Even more than Arabic content, media consumers want local content. In Saudi Arabia, for instance, the supply of American and Egyptian television exceeds demand, as viewers are eager for more content from the Arabian Gulf. The issues related to lack of local talent and funding are being addressed, removing this barrier to meeting the demand for Arabic and local content. Moreover, the prominence of simulcasting and co-productions between pan-Arab and local broadcasters are creating business models that allow for more localised content to reach audiences across the Middle East.
Third, mobile technology is ubiquitous. The mobile market is one of the fastest-growing segments in the Middle East. Smartphone penetration in Saudi Arabia and the UAE has surpassed 75 per cent of the population, with more than 55 per cent of users accessing the internet every day on a smartphone. Already, consumers are more likely to play games and access social networks on a mobile device than a laptop or desktop. This has long-term implications for consumption habits. It should be a top priority for media players to have “mobile centricity” as an integral part of their strategy.
Fourth, paid models for premium content will flourish. Analysts have found that leisure activities in key Middle East markets (Algeria, Bahrain, Egypt, Jordan, Kuwait, Morocco, Qatar, Saudi Arabia, Tunisia and the UAE) represent only 2.4 per cent of consumer expenditure, compared with 9 per cent in the US.
Consumer spending on media in the Middle East is expected to grow at a significantly higher rate than that in most developed markets, driven by the proliferation of digital content, demand for on-the-go content, and more focus on premium local content. The rise of localised, targeted and measurable content makes for a better experience for consumers because they can access material targeted to their needs, while allowing advertisers to reach consumers more effectively.
Again, the Arab Digital Generation is at the forefront of this trend, being the first adopter of subscription-based “over-the-top” sites (which use the internet to stream content directly to devices), the primary user of e-commerce and the main consumer of paid games.
These changes in how consumers access, interact with and consume media present huge opportunities for firms ready to respond. Regional players have an opportunity to reshape their business models and explore investments in high-quality local content.
Global players will need to re-evaluate and reaffirm their presence in the region or risk missing the opportunities. To drive the evolution of the media market, large regional and international media companies need to combine the creative energy of Arab youth with their institutional structures to support the transformation of the industry. As international media firms and investors consider expansion strategies, the Middle East warrants renewed attention.
Noura Al Kaabi is the chief executive of twofour54. Jayant Bhargava is a partner with Strategy& (formerly Booz & Company)
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