Dubai PressClub Launches Fourth Edition of Arab Media Outlook

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Dubai PressClub Launches Fourth Edition of Arab Media Outlook

Dubai PressClub Launches Fourth Edition of Arab Media Outlook

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  • 1. Arab Media Outlook 2011-2015Arab Media: Exposure andTransition In cooperation withApril 30th 2012
  • 2. The fourth edition of AMO covers 17 markets and 140 industry interviews17 countries covered by AMO, including Interviews with industry leaders-four key countries for market research breakdown by platform 2% 4% Nearly 2,000 interviews carried out by Ipsos in In-scope markets 9% market research Market research markets countries Palestine (11) Syria Libya (7) 9% (7) Jordan Kuwait (5) Iraq 43% Morocco Tunisia (10) (7) Qatar (4) (4) (7) Lebanon (14) Bahrain (5) Egypt 15% (7) Saudi UAE Arabia (21) (5) Sudan (4) Oman (3) 18% Yemen Radio Service providers (4) Content providers Online Others TV channels/ broadcasters Print1
  • 3. We based our projections on rigorous quantitative and qualitative analysis leading to our views on the outlook across platforms and content types Quantitative research Section 1 - Platforms • Market research from Ipsos in four key markets • 2011-2015 net advertising figures • 140 industry interviews • Print trends • Advertising discount rates • TV trends • Advertising agency fees etc. • Online trends • Others (radio, out of home) Qualitative research Section 1 - Content • 140 media specialists on a range of topics • Prospects for the industry • TV Production • Platforms growth • Movies • Views on regional uprisings • Sports • Key issues (talent etc.) • Music • Etc. Section 2 - Countries External research • 100+ sector reports • 4 “in focus” countries – Egypt, Morocco, Saudi • 20+ research sources, including Arab Arabia, UAE Advisors • 13 country reviews Group, ZenithOptimedia, Informa, IMF, etc. Section 3 – Thematic topic Projection Model • “The media revolution” • Impact of the 2011 regional events on traditional and digital media across the Arab region2
  • 4. We project net advertising to pick-up slightly in 2012 after a very difficult 2011 Millions of USD Year-on-Year growth CAGR (2012-2015) -12.1% 6.7% 5,954 6,000 5,611 7.1% -10.3% 5,488 5,281 3.5% 5,154 29.8% 4,933 4,908 5,000 4,741 4,322 4,000 3,000 2,000 1,000 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 Forecast Palestine Yemen Libya Sudan Syria Tunisia Oman Bahrain Jordan Iraq Lebanon Qatar Morocco Kuwait Egypt UAE Saudi Arabia Pan-Arab3
  • 5. We project digital to continue to grow to reach 10% of the ad spend by 2015 whichremains low considering the time spent online in the regionAd spend by platform evolution Digital advertising shareMillions of USD 2011, % of total advertising spend100%= 4,933 5,282 4,741 4,908 5,154 5,488 5,954 UK 32.3% Out-of-Home Radio Digital 100% 9% 8% 8% 8% 8% 8% 8% Denmark 27.2% 5% 5% 6% 6% 6% 6% 6% 1% 2% Netherlands 23.3% 4% 6% 8% 9% 10% China 21.4% % from Total Ad Spend 40% 41% 40% Australia 21.1% 40% Television 41% 41% 40% South Korea 18.0% 6% 5% US 16.8% 5% 5% Magazines Newspapers 5% 5% 4% Arab region 4.0% 39% 38% India 2.8% 37% 35% 33% 32% 31% Low considering our research shows people spend 2 hours online per day and 3 hours watching TV 0% 2009 2010 2011 2012 2013 2014 20154
  • 6. Key platform highlights and outlook – 2011-2015 • Circulation continues to grow but at a declining rate; the industry is at an inflexion point with lowest growth in the last 3 years seen in 2011 • A few regional publishers are positioning themselves for digital migration and looking to diversify revenue streams…. Print • ….however, monetization of online has been largely driven by advertising • Success of new launches suggest that differentiated content can have an edge in the competitive print arena • Newsrooms are being reorganized to better exploit cross platform opportunities • Large broadcasting groups continue to dominate the TV landscape • Introduction of People Meter in a few GCC markets, is expected to boost transparency • Number of HD channels is on the rise, but monetization remains a challenge; 3D TV is unlikely to be a viable proposition in the near term Television • Pay TV take-up remains low but some success is being felt in the combat against piracy • International players are looking to invest in regional content and identifying strategic niche segments • Arab broadcasters are expanding overseas; but face the challenge of developing and managing overseas investment • Time spent online is exceeding that of watching television in certain age groups, online platforms offer unique opportunities to target a pan-regional audience • Government and private sector lead initiatives aimed at incubation and commercialization of digital opportunitiesOnline and Mobile • Several digital initiatives have been launched leveraging cross-platform opportunities • Display advertising is gaining a new lease of life in the region with large brand advertisers stepping into the arena5 Source: Deloitte analysis
  • 7. Newspapers readership: significant shifts in Egypt’s newspapers’ landscapeMost read newspapers (%) - Egypt Most read newspapers (%) - Morocco Al Masry Al Youm 61% Assabah 70.8% Al Akhbar 53% Al Massae 68.6% Al Ahram 51% Al Ahdath Al Maghribia 30.8% Al Gomhuria 34% Al Mountakhab 14.5% Al Masaa 11% Al Ittihad Al Ichtiraki 8.4% Al Dostour 11% Akhbar Al Youm Al Maghribiya 7.9% Al Shourouq 6% Le Matin du Sahara et Maghreb 6.1% Al Wafd 5% LEconomiste 5.1% Al Ahram Al Messai 4% Al Alam 4.9% Al Yaum 3% LOpinion 4.0% Significant changes in newspapers landscape with leading independent Two leading Moroccan newspapers belong to a new wave of independent paper Al Masry Al Youm claiming top spot while others appear in top 10 newspapers in the country (2000s launch)Most read newspapers (%) – Saudi Arabia Most read newspapers (%)- UAE OKAZ 42.0% Gulf News 48.0% AL RIYADH 39.3% Al Khaleej 39.3% AL HAYAT 33.3% Al Emarat Al Youm 31.6% ARRIYADIAH 23.2% Khaleej Times 27.7% AL WATAN 21.0% Al Ittihad 26.6% ASHARQ AL AWSAT 17.2% Al Bayan 23.5% AL-JAZIRAH 16.6% The Times of India 9.2% AL YAUM 15.5% Malayalam… 8.7% AL MADINA 14.8% Akhbar Al Yawm 8.2% AL EQTISADIAH 7.2% 7 Days 7.7% Relative status quo with Okaz claiming top spot – strong local preferences Gulf News and Al Khaleej remain ahead of the others with the former now (Al Riyadh) and for Al Hayat amongst Arab expats claiming top spot in the country6 Source: Ipsos, Deloitte analysis
  • 8. Migration from print to online is strongly evident across the region; regionalprint publishers are already leveraging the reach of online properties riMeans of reading news/articles (%)* Case study of ITP – Online migration for specific titles** Unique online viewers (000s) Print circulation (000s) Ratio of unique 45.3% Total = 25.7% online visitors to 29 print circulation 29.1% Cars ME 8 3.7 14.4% 108 3.0 10.3% Ahlan Live 37 1.0% 289 9.8 TimeOut Dubai Use only Print Use print more Use print and Use internet Use only the 29 than internet internet equally more than print internet 326 16.7 Masala 20Alternative means of following news aside from print (%)* 41.0% 1200 28.2 Arabian Business For those following news on 43 alternative platforms 0 500 1000 1500 21.0% 17.0% 14.0% • ITP now publishes more than 75 weekly and monthly magazines and has a wide portfolio of digital properties 4.0% 3.0% • Time Out is a good example of diversification online, including on mobile / 0.2% app‟s which launched in June 2010 and reached 40,000 downloads in the Others Tablet Twitter Emails Blogs Mobile Website first month (#1 app in the UAE) phone • ITP has seen some success in digital migration with some titles ‘online (news revenues constituting a significant share of total ad revenues alerts) particularly with titles such as Arabian Business and Masala (Bollywood news magazine)*Ipsos market research in Egypt, Morocco, Saudi Arabia and UAE, Deloitte analysis **Company websites7
  • 9. Newspapers in the Arab region are gradually succeeding in bringingaudiences to their websitesRanking of online newspapers based Al Shorouk, Egypt - case studyon traffic - UK and Egypt UK Egypt 10 • The Daily Mail #16 • Al Ahram #16 • The Guardian #17 20 • The telegraph #24 • Al Wafd #26 • Al Shorouk 30 #30 Online Edition • The Sun #38 • Al Masry Al Youm #39 • The online internet arm of the popular Shorouk Egyptian daily 40 newspaper (shorouknews.com) was launched in February 2009 • While having a significantly lower reach on print (outside the Top 10) than the larger newspapers in the market, Al Shorouk has managed to build a stronger online audience: 50 – Ranked #3 amongst all online newspapers • • Al Dostour #52 The Independent # 90 – Ranked #30 amongst all websites in the country • New York Times # 151 • Financial Times # 157 • Its “punchy” headlines and independent editorial tone have found • The Daily Mirror # 160 • Metro # 178 favour with young Egyptians who use social media as their main • The Times # 234 source for news consumptionSource: Alexa, Company website, Deloitte analysis8
  • 10. Online news: traditional media online properties manage to attract audienceMost visited news websites (%)- Egypt Most visited news websites (%)- Morocco Al Masry Al Youm 36.4 Hespress 28.7% Al Youm Al 7 32.8 Al Jazzera 16.2% Al Jazeera News 8.7 Facebook 7.3% Al Akhbar Newspaper 5 Express 6.3% Midan El Tahrir 1.9 Hiba press 5.4% Akhbaar El Youm 1.7 Kooora 4.0% Al Dostour 1.5 Oula 3.2% Al Ahraam 1.1 2M 3.0% Masrawy 1.1 Panet.co.it 2.9% Al Jumhoria 1 Akhbarona 2.5%Online news dominated by existing newspapers Online news “independent” is market leader in MoroccoMost visited news websites (%)- Saudi Arabia Most visited news websites (%) - UAE Al Arabiya 21.6% Gulf news 19% Al Jazeera 20.7% Times of India 12% Sabak 3.6% Al Jazeera 10% Okaz 3.5% Malayala manorama 7% Yahoo 2.8% news.google.com 7% Al Akhbar 2.5% Al Arabia 6% Facebook 2.4% Al Khaleej 6% Maktoob 2.0% Khaleej times 5% Al Hayat 1.5% Emarat Al youm 5% Al Ahram 1.2% Yahoo/maktoob 4% Online news dominated by the two pan Arab news channels Online news dominated by existing newspapers… with cultural diversity9 Source: Ipsos, Deloitte analysis
  • 11. Large pan Arab broadcasters and MBC in particular have consolidated their dominance across markets with the exception of Egypt MBC channel News channel Egypt Morocco Saudi Arabia UAE #1 Al Hayat TV 2M TV MBC 1 MBC 2 #2 Al Hayat Cinema Al Jazeera Al Arabiya MBC Action #3 Al Hayat Series MBC 4 MBC 2 MBC 1 #4 Al Mehwar MBC 2 Al Jazeera MBC 4 #5 Al Hayat 2 Medi 1 Sat TV MBC Action Abu Dhabi Al Oula #6 Dream 2 MBC 1 MBC 4 Dubai TV #7 CBC Al Oula Abu Dhabi Al Oula Al Arabiya #8 Rotana Cinema Rotana Cinema Rotana Cinema Al Jazeera #9 Dream 1 Al Maghribia TV MBC Drama Abu Dhabi Drama #10 MBC 2 MBC Action Melody Aflam Dubai OneSource: Ipsos, Deloitte analysis 10
  • 12. TV programs: 2011 was the year of political talk shows… and Arab Idol Most watched TV programmes - Egypt Most watched TV programmes - Morocco Rank Programme Rank Programme 1 El Hayat El Youm 1 Akhtar El Moujrimin 2 El Ashera Masaan 2 El Khait Labiad 3 Sabaya El Kheir 3 45 Dakika 4 Masr El Gadidah 4 Moukhtafoune 5 El Hayat El Ann 5 Tahkik 6 Soula 6 Arab Idol 7 Wahed men El Naas 7 Les infos 8 El Tabaa El Olaa 8 El Ittijah El Mouakiss 9 El Den Wal Hayat 9 Moudawala 10 El Hakikah 10 Bidoun Haraj Arab Idol captured TV viewing heavily dominated by political talk shows and news audience Moroccan TV still highly concentrated around “true life” stories and shows with Al Hayat and Dream airing the preferred shows across the social documentaries region Most watched TV programmes- Saudi Arabia Most watched TV programmes - UAE Rank Programme Rank Programme 1 Kalam Nawaem 1 Al Etijah Al Moakes 2 Arab Idol 2 Arab Idol 3 Sada Al Malaeb 3 Dance India Dance 4 Sabah Al Khayr Ya Arab 4 Jeopardy 5 Al Toffah Al Akhdar 5 Comedy Circus 6 Mbc Fi Osbou 6 Sada Al Maleb 7 Joelle 7 Bade acche lagte hai 8 The Doctors 8 Crime Patrol 9 Haza Ana 9 Hareem Al Sultan 10 Al Koora 10 CID Dominated by MBC TV shows including targeted talk shows Live political talk show on Al Jazeera claimed number one stop while (women‟s, sports) imported formats fared well11 Source: Ipsos, Deloitte analysis *We have ranked only programmes with specific names provided by the respondents and excluded generic genre
  • 13. Pay-TV penetration remains low across most Arab markets; as in othermature markets pay-TV uptake has been driven largely by sports Pay TV subscriptions in Egypt Types of channels subscribed to in Egypt OSN 44.6% 63% 59% Al Jazeera 25.6% Sports ART 21.5% 91% 9% Abu Dhabi 3.3% 27% Sports Al Majd 2.5% Others 0.8% 3% Pay for subscription Dont Know 1.7% Sports Movies Series & Family Dont know/No answer Do not pay for subscription Entertainment Pay TV subscriptions in Saudi Arabia Types of channels subscribed to in Saudi Arabia AJS 56.6% 82% OSN 18.8% ART 12.1% 80% 20% Abu Dhabi 40% 5.5% Sports 22% Al Majd 5.1% Dreambox 1.1% 1% 2% Pay for subscription Dont Know 0.7% Sports Movies eries & Family Entertainment programs know/No answer S Religious Dont Do not pay for subscriptionSource: Ipsos, Deloitte analysis12
  • 14. Foreign media houses are investing in regional TV content and identifyingstrategic, underserved niches • In 2012, News Corp became a minority investor in the MOBY Group • Moby Group has presence across platforms (TV, print and new media) with a focus on local Iranian, Afghani content and is looking to increase its footprint in 2 markets in the Arab region • News Corporation also decided to increase its total stake in Rotana • The BBC announced plans to produce an Arabic version of its popular Question Time Show - which usually features a number of politicians who provide a Q&A session • The show is expected to focus more on young people, social media and documentary making • Sky News Arabia is a 50–50 joint venture between Abu Dhabi Media Investment Corp (ADMIC) and British Sky Broadcasting (BSkyB) • The 24 hour Arabic language FTA, multi-platform news service will be launched on May 6th • In 2011, Sony Pictures Television (SPT) announced that it would start producing Arabic language versions of the popular U.S. shows ‘Wheel of Fortune’ and ‘Jeopardy!’ • The episodes of Wheel of Fortune are to be produced for Hayat TV in Egypt and shot in Cairo whilst the Jeopardy! episodes are to be produced in Lebanon for broadcast on MBC1 • This expansion into non-scripted programs is an important step in SPT Arabia‟s growth strategy13 Source: Company websites, AME Info 2011/2012, Deloitte analysis
  • 15. Social networking has gained ground as the most common online activityacross a few regional markets; while YouTube usage has increasedsignificantly Most common online activities (%) — UAE Frequency of using YouTube and other similar sites (%)- UAE Listening to radio 9.0% 33% VOIP Calls % YouTube users 3.0% 5.8% Downloading music/videos etc 12.0% 23% 24% 24% 18.3% Online Gaming 15% 28% 20% 11% 11% Chatting 11% 46.0% 29.6% 4% 3% 72% 16% Watching videos /TV programs 3% 3% Emails More Once a 2–3 days Once a Once a Once a Less Getting Information than day a week week fortnight month often 31.7% Yes No once a Social Networking 24.0% day 2012 2009 Sample = 430 Sample = 328 2009 2012 Most common online activities (%) — KSA Frequency of using YouTube and other similar sites (%) — KSA Other 3.1% % of regular 1.0% 4.7% 2012 Average: 4.2 times a week Paying bills 7.0% 5.4% YouTube users** 2009 Average: 3.3 times a week Uploading content 12.0% 8.2% 29.3% Downloading music, videos 9.4% 15.9% 8.0% 19.6% VOIP 7.0% 12.8% 9.2% 21.8% Listening to radio 7.0% 24.1% 17% 17.9% 23.1% 4.7% 2.4% 6.1% Chatting 83% 7.7% 9.0% 6.4% 6.4% 7.7% Emails Online games 52.0% Watching videos / TV 42.8% Social Networking Getting Information Yes No Sample = 463 Sample = 463 2009 201214 Source: Ipsos market research in Egypt, Morocco, Saudi Arabia and UAE, Deloitte analysis
  • 16. Strong propensity towards downloading and paying for mobile apps withArabic content preferred; however regional content available is as yet limited Propensity for mobile applications* Apps and spend per smartphone** Language preference for browsing*** # of Apps per smartphone Do you download Frequency of downloading applications? applications Nokia 22 Less often 33% 20% Once every 7% Apple iPhone 58 2 months Once every 17% month 23% Mean= 80% 77% Once every RIM- Blackberry 19 9% 32 3 weeks Once every 11% 2 weeks Arabic Others Samsung 24 Once every 23% week Yes No Free aps by type**** HTC 33 Breakdown of Top Free apps (UAE) Less often 31% Spend on smartphone 12% Once Every 2… 4% apps Once 11% Every… $1-$4 25% 27% 73% Once 13% Mean = Every 3… USD 25 Once $5-$9 18% 13% Every 2… 88% Once 28% Every… More than Yes No $9 57% Regional International • Despite strong preference for regional content, the paucity of the same has resulted in international apps dominating the list of most downloaded apps in the UAE and Saudi Arabia * Source: Ipsos market research UAE (sample size =315) and KSA (sample size =395) ** Source: Based on a survey of 2,950 respondents -Apps Arabia- Apps Arabia Mobile Report MENA *** Source: Ipsos market research in Egypt, Morocco, UAE and KSA15 **** Source: Itunes store (UAE) - Top 200 free apps in terms of downloads (March 2012)
  • 17. The Arab region is seeing its first wave of successes in the online space Marketplaces - Case study of Souq.com Online gaming - Case study on Jawaker • Launched in 2005 by the Jabbar Internet Group, as a C2C • Jawaker is a multiplayer card games portal launched in auction platform, Souq.com‟s business model has evolved April 2009 by the Jordan based Boundless Drop to an online marketplace with fixed prices • Customer centric website; delivery times reduced from 8 to 3 • Revenue model includes a combination of advertising, micro- days transactions, premium memberships, user tournaments, in- • Revenue is derived from 3 streams i.e. online retail game product placement and white labeling (margins), market places (commission) and deal of the day (discounts, liquidations) • Some of the games are hosted on the Facebook platform • Growing through partnerships (i.e. with telcos, online including Basra, Baloot, Estimation, Tarneeb and Trix retailers and consumer durables companies) and investments in online properties (i.e. online sports apparel firm Run2Sport) Performance: Performance: • Twofour54 ibtikar, announced an investment in Jawaker in • Strong footprint across key markets for e-commerce: 2009 UAE, KSA, Egypt • Over 500,000 registered users with 17 Million page views per month • Ranked amongst the top performing sites in terms of • Breakdown of traffic to the website: Jordan (30%), Saudi traffic across the region- UAE (22nd), Egypt (73rd), KSA (81st) Arabia (25%), Egypt (11%), UAE (9%), othersSource: Deloitte interviews, analysis, company websites, Arab Advisors Group16
  • 18. Key trends in the market – overall the bipolarisation between pan Arab andultra-local content is increasingly pronounced • Local content is king but imports such talent shows and Turkish soaps continue to attract the lion share of viewers while animation is on the rise TV production • There has been a recent shift in productions geographic hubs • There are major opportunities for local players in online VOD and YouTube and the web are not just sounding boards anymore • Arabic films are in high demand and experience a positive momentum with increased funding initiatives and interaction with the international stage (box office and shooting) Movies • However the economics of the industry remain challenging and releases need exposure at least at a pan-Arab level to generate return on investment • Value generation need to be triggered via screen growth, quotas, better non theatrical rights exploitation, and potentially 3D • Sports viewership in the region is particularly high with football the predominant sport watched on TV Sports • Sports coverage is increasing but monetisation remains a challenge • Domestic leagues are undervalued sports properties and need a balanced approach between imports and home-grown local talent • As the industry fragments there is an increasing appeal for ultra local music content while a few pan Arab singers remain as popular as ever Music • Recorded music sales are already low in the region and will continue to decline until legal music download sites begin to get a foothold in the market • Live entertainment will provide a significant revenue stream but important changes in international property right regulation need to happen in music publishing17
  • 19. TV production and viewing in 2011 have been dominated by drama and talentshows – with imports still taking a large share of audienceMost popular TV genre in the region The evolution of Turkish soaps The evolution of Turkish soaps 2007 2008-11 2012 Drama Series, 17% • Introduction into • MBC continues (1001 • The Turkish soap News, 19% mainstream Arab Nights and Forbidden phenomenon television first Love) makes it to pay-TV season of „Noor‟ • Other with OSN‟s • The finale in 85 broadcasters, such as „Sultan‟s Harem‟ million viewers ADM and DMI also Other, 12% across the region start broadcasting Movies, 17 Turkish series % Licensed formats 2011 Original shows 2011 Comedy Series, 6% • Arab Idol • Al Maydan 24% 76% • Arab‟s Got Talent • Al Forsa Music, 8% Entertainme • Celebrity Duets • Anti Ajmal nt • Star Academy • Howa o Hyiah Sports, 11% Series, 11% • Top Chef • Jamel Darak • Joelle • Najm Al Khaleej • Nojoom El Oloum • etc xx % of total outputs18
  • 20. Despite the popularity of Arabic movies, the film industry in the region stillface a number of factors restricting its growth Preferred movies Number of cinema screens / capita (per mln inhabitants) Egypt 127 96% 42% 87 15% 4% 1% 60 58 45 Arabic movies Hollywood blockbusters Bollywood movies Independent movies not watch movies I do 39 KSA 26 24 89% 17 12 8 6 6 46% 5 2 15% 7% 6% Arabic movies Hollywood Bollywood I Do Not Watch Independent blockbusters movies Movies movies Morocco 72% 57% Methods used for watching new movie releases 32% 19% 3% 1% 57% Arabic movies Hollywood Bollywood Independent Other movies I Do Not blockbusters movies movies Watch Movies 38% 29% UAE 22% 62% 54% 39% 5% 4% 9% 6% 3% I wait until they I try to watch I wait until they I stream/ I wait until they I pay to stream/ are available on them in the are available on download them are available on download them FTA TV cinema DVD online for free pay-TV onlineHollywood blockbusters Bollywood movies rabic movies Other movies A Independent movies Watch Movies I Do Not 19
  • 21. Despite high consumer preferences for local football, local leagues rightsremain very much undervalued Top 5 Followed Football Events/Leagues TV Broadcasting Rights in Arab 94% World — Annual (USD m) Egypt 71% UAE 200 Football in top 5 for 83% of Football in top 5 for 56% of males 50% males 180 34% 33% 38% 31% 160 29% 22% 140 10% 120 Local UEFA EPL (BPL) FIFA WC Other FIFA WC Local AFC Asian AFC Asian UEFA Football Champions European Football Champions Cup Champions 100 x 8.2 League League League League League League 80 Morocco 77% KSA Football in top 5 for 93% of Football in top 5 for 94% of 60 63% males males 54% 40 39% 35% 34% 30% 28% 20 19% 18% 0 Top 3 Local EPL and Leagues* Champions Local UEFA FIFA WC EPL (BPL) Other Local EPL (BPL) UEFA AFC Asian FIFA WC League** Football Champions European Football Champions Champions league League League league League League20
  • 22. The overall value of the music industry in the region is low, primarily due tolimited digital sales and lack of adequate copyright regulation Digital music consumption in Arab region Arab region trends Proportion of record company revenues from 1 • Overall recorded music digital (2011) Recorded revenues declining, driven music by falling physical sales and (Physical and challenging digital sales due digital) to high levels of piracy 71% 53% 52% 32%Music industry 2 • Live music is a growing revenues industry in the region, with a China South Korea USA Arab region Live music rising number of venues to Sources for accessing music in Arab region (Touring, mercha ndising) accommodate both regional 50% and international artists 43% 14% 13% 13% 11% 5% 3% 3 • Publishing revenues minimal Music in the Arab region due to lack Free Radio Physical None Internet Legal Other Online CD publishing of adequate copyright online downloads CD purchases streaming online downloads purchases (Licensing of protection regulation rights)21
  • 23. There is a consensus in the media industry on the positive long term impactof the regional events of 2011 Long-lasting effects of uprisings on Arab media industry Quality of satellite news — media professionals Has quality of satellite news increased? 80% 100% 60% 40% 80% 65% 20% 35% 0% 60% Yes No Quality of satellite news — consumers 40% 79% 71% 71% 100% I believe the quality of satellite news has increased 80% 45% 20% 60% 92% 40% 82% 80% 72% 0% 20% IncreasedIncrease in number of use ofReduced reliance on professional outlets for news freedom of Increased privatesocial media as a source for news the press media outlets 0% KSA Egypt UAE MoroccoSource: Interviews with industry professionals (sample = 91)22
  • 24. The regional uprisings have led to significant shifts in the way consumers engagewith news content…Newspapers in Egypt after the events Impact of uprisings on newspaper habits in Egypt Most popular newspapers in Egypt (Sample size = 500) I look for more economic and 66% 61% political analysis 53% 50% 51% 39% 34% 34% I look more for different 29% 19% sources 11% 5% I spend more time on articles 16% Al Masry Al Al Akhbar Al Ahram Al Gomhuria Al Dostour instead of just headlines Youm 2009 2012 I look more for articles that 13% are in line with my opinions Daily reach (%) Al Masry Al Youm 0.10 website reach I subscribe to / buy more 11% 0.08 political magazines 0.06 The Arab Spring has not 8.3% 0.04 affected my newspaper habits 0.02 Dont know / No answer 2.3% 0 2011 2012Source: Ipsos, Company website, Alexa, Deloitte analysis23
  • 25. …which benefited in particular satellite news channels Before Uprisings During Uprisings 8% 25% 26% 6% Frequency of News, 33 watching % 12% news on TV 58% Daily 11% 19% 16% 5-6 days / week 3-4 days / week 19% 1-2 days / week Less often Before Uprisings During Uprisings 9% 14% 8% Time spent 31% watching 41% 14% 19% news on TV More than 1 hour 46-60 minutes 17% 31-45 minutes 28% 19% 16-30 minutes Up to 15 minutesSource: Ipsos24
  • 26. Growth in social media usage in the Arab region… however its importance in theevents should not be overplayed Unprecedented growth of Facebook users Growth in Facebook users in Arab region • With Facebook being used to organise protests and share up-to-the- during period Jan-Apr 2010 vs. 2011 47% minute information on revolutionary activities at a local level, usage 2010 2011 of the site in the Arab world more than doubled between Jan-Apr 30% 29% 2011 20% 18% 17% 15% • Strong growth in Facebook usage has been prominent in those 12% 10% 6% countries where the revolutions have taken place • In the past year, the total number of Facebook users in the Arab Arab region Bahrain Egypt Tunisia Yemen world has risen from under 20m in Nov 2010 to 36m in Nov 2011 Twitter as information source Twitter Penetration Arab region (Pop., Nov ‘11) Most popular hashtags on Twitter in Arab Bahrain 3.4% region, Jan-Mar 2011 Kuwait 3.4% Qatar 1.5% UAE 1.1% KSA 0.5% Egypt 1,400,000 Lebanon 0.5% Jordan 0.3% Jan-25 1,200,000 Egypt 0.2% Oman 0.1% Libya 995,000 • Successful social movements long pre- Palestine 0.1% dated social media Tunisia 0.1% Bahrain 640,000 Morocco 0.1% • Access to twitter and broadband is limited Libya 0.1% in most countries impacted by the Protest 620,000 Syria 0.0% uprisings Yemen 0.0%Source: Arab Social Media Report, Deloitte research & analysis25
  • 27. Overall 2011 has marked a year of transition for Arab media but also unlockedmany opportunities for 2012 and beyond Key opportunities for 2012-2015 Views on the outlook for the media industry 2012 • The exponential global growth of digital and social 80% media is a big opportunity for the regional players given the presence of young technology adopters 60% • Funding and government interventions is fundamental to further stimulate local production and talent identification 40% • International players and investors are increasingly 65% attracted by the opportunities present in the growing and more open and transparent regional media 20% industry 17% 19% • Piracy control and monetisation of regional premium content is vital for the development of pay models on 0% multiple platforms Negative Neutral Positive • Collaboration models among regional media and telco players can facilitate the development of digital platforms • Creation of incubation centers for young entrepreneurs allows for emergence of regional successful start-up‟s*Industry interviews, Deloitte analysis26