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2011Digital Media in MENA             Paritosh Kashyap             1/1/2011
Digital Media in MENAIntroductionThe competitive dynamics of the media industry is getting transformed throughout the worl...
Digital Media in MENA       Curtails geographical barriers: One very remarkable feature of digital media is its       acce...
Digital Media in MENA       Not everyone is very comfortable with digital media, especially when it comes to money       t...
Digital Media in MENAIn contrast to other parts of the developed world, digital media in MENA region is still not verymatu...
Digital Media in MENA       states like UAE and Saudi Arabia enjoying a mobile penetration of 200 and 125       percentage...
Digital Media in MENA       Low broad band connectivity: It is expected that broadband connectivity will increase       in...
Digital Media in MENA        respectively where as in rich Gulf States like UAE and Qatar it is 69 and 84 percentages     ...
Digital Media in MENA                                     6%                          8%                                  ...
Digital Media in MENA       Online shopping activity is abysmally low: according to a research conducted by       Neilson ...
Digital Media in MENAFig: shows the common activities on internet in the MENA region. Source: Neilson, the surveycomprised...
Digital Media in MENAFig 6: shows the place of access of internet of the respondentsin percentages. (Source: EffectiveRese...
Digital Media in MENAFig 7: shows percentage of correspondents consuming various media channels on a daily basis(in case o...
Digital Media in MENA       Facebook seems to be very popular across the region. The tremendous popularity of       Facebo...
Digital Media in MENA        Internet penetration is comparatively low: internet penetration is increasing in the        M...
Digital Media in MENAof popular pages such as “We are all Khalid Said”, were aimed at- addressing political concernsof the...
Digital Media in MENAFrench version of FB has a total of 3.7 million users and is more popular in francophonecountries suc...
Digital Media in MENA     than 25. This young generation will be heavily influencing the growth of digital media     in th...
Digital Media in MENA      English; but the region has dearth of Arabic/local digital content. (Unlike newspaper,      whe...
Digital Media in MENA  2> Arab Media Outlook 2009-13, 2009, simulating local content in Arab Media Industry, p-     169  3...
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  1. 1. 2011Digital Media in MENA Paritosh Kashyap 1/1/2011
  2. 2. Digital Media in MENAIntroductionThe competitive dynamics of the media industry is getting transformed throughout the world.All across the globe, the popularity of traditional media channels such as print media, TVbroadcast and Radio broadcast is going down and is getting replaced by the digital media.Notonly is the digital medium encroaching upon the space of the traditional media but alsochanging the dynamics of revenue model so far enjoyed by the traditional media.In the digital media itself lot of changes are happening. The traditional boundaries betweenmedia companies, telecom operators, handset manufactures and internet service provider isgetting blurred. Everyone is encroaching upon each other’s space.The digital media in the Middle East and North Africa (MENA) is still in its nascent stage, ascompared to other developed parts of the world such as Western Europe and North Americahowever given the fact that huge investments are made in ICT infrastructure- internet andmobile penetration are increasing at a rampant speed and a new wave of political change ishappening all across the region- digital media has a huge potential to grow in the coming time.The following reportintents to do an analysis of Digital media, its present state and its futureprospect in the MENA region.Advantages of digital media:Digital media offer some unique advantages which traditional media such as TV & Radiobroadcast and print media cannot offer. Some of the unique advantages are:- Economical: Digital media is very economical. Having a brick and mortar shop will cost a lot; in contrast having a web presence is much cheaper. It does not cost much to develop and market a website.ParitoshKashyap Page 1
  3. 3. Digital Media in MENA Curtails geographical barriers: One very remarkable feature of digital media is its accessibility from any part of the globe. Geographical barriers often create challenge for traditional media sources such as newspaper and magazines in disseminating information, but digital media with virtual presence could be accessed from any part of the world. Content can be consumed as well as produced at the same time: With the help of web 2.0 platforms, content can be viewed/consumed as well as produced at the same time. Web 2.0 provides two way communication platforms. Not only does it communicate directly to the end users but also allow the consumers to share their opinion, feedbacks etc. Consumer Insights: With the help of web based analytics, digital media can give a lot of detailed insights, pertaining to consumer behavior and consumer demographics- consumption pattern, duration, geography etc. One remarkable feature is that, all such valuable data could be obtained at a negligible cost. Target Marketing: Digital media helps in capturing the target audience.Disadvantages of Digital Media:Along with advantages digital media also has its own disadvantagessuch as Revenue from advertisements is not easy in the digital media. It’s easy to have a web presence/ digital presence, but it is as difficult to generate revenue out of it. Monetization of digital media is a challengethroughout the globe. Generating revenue always takes a large amount of time. Revenue follows after creating a sizeable customer base. For instance even Facebook took five years to break even. The revenue from marketing could be generated only after securing huge customer base.ParitoshKashyap Page 2
  4. 4. Digital Media in MENA Not everyone is very comfortable with digital media, especially when it comes to money transaction. A large number of individuals are wary of transferring money over the internet. More over the web medium has also been the source of lot of frauds. Consumers expect a lot of free content on the web. When it comes to paying for the content, many individuals are not very willing to pay. They just want stuffs for free.DIGITAL MEDIA: Global trendsGlobally more than 50% of the internet consumption comprises of 5 nations: USA, China, India,Brazil and Russia. As described earlier a lot of creative rearrangements are happening in themedia sector across the globe. Some of the major global trends in the digital media are asfollows (Morgan Stanley, 2009) E-commerce: major products which are purchased online globally are- computer products, electronic items, event tickets, hotel bookings, tour packages, books, music/video etc, toys etc. Consumptions of internet on mobile are catching up fast with consumption on desktop. According to Morgan Stanley report, by 2013-14 more users will be consuming internet via mobile devices rather than desktop computer. Social Media: Social media users are surpassing the regular email users. People refer spending more time on social media rather than on regular emails. Adoption of newer and better telecom services such as 3G will further consolidate the stronghold of mobile medium.Digital media in Middle EastParitoshKashyap Page 3
  5. 5. Digital Media in MENAIn contrast to other parts of the developed world, digital media in MENA region is still not verymatured; but is surely one of the sectors, which is poised for a high growth in the coming time.As a region MENA has its own advantages andchallenges. Presently there are 65 millioninternet users in the MENA region which is expected to increase to 80 million by 2012. (AMIR,2011) Other than global heavyweights such as Google, Yahoo, Facebook and regional playerssuch as Kooora, Maktoob etc; the region is also witnessing the arrival of online marketing firmssuch as Al click, Eastline Marketing etc.Advantages of Middle EastThe Socio Economic structure of the entire Middle East has lot of inherent advantages, whichcan boost the growth of online media companies in the region. Some of them are (Booz &Company, 2009): A uniform, homogeneous market: The Middle East might have many small nations, across the region but all share the common Arab heritage and enjoy high degree of commonality across various socio-cultural dimensions. The Middle East could be considered as a homogeneous mixture of around 300 million individuals. The idea of uniformity becomes more apt in case of digital media because; unlike regular media such as print and broadcast which are restricted to national boundaries due to regulatory barriers; online media can have a pan Arab presence. High mobile penetration: Large amount of digital contents are being viewed with the help of mobile devices. MENA region enjoys a high degree of mobile penetration withParitoshKashyap Page 4
  6. 6. Digital Media in MENA states like UAE and Saudi Arabia enjoying a mobile penetration of 200 and 125 percentages. High literacy rate: Many of the MENA states are taking education, high up on their agendas. Some of the MENA states enjoy a high degree of literacy. For instance: collectively the six gulf state enjoys a literacy rate of more than 75 percentages. Several MENA nations are extremely rich: Many of the oil rich MENA nations, especially Gulf States are extremely rich and enjoy high GDP per capita. For instance: Qatar, where per capita GDP is around US $ 78,000. By 2015, Gulf States and Egypt are expected to have 13 million households in middle to high income brackets. Investments in the ICT infra-structure: MENA nations are realizing the urgency of economic diversification. One thing which is high up on their agenda is ICT infrastructure. All across the MENA huge investments are being made to develop state of the art ICT infra structure. Demographics: Younger generation is more inclined towards the digital media. 55percentages of Arab population is less than 25 years of age which shows that there is a huge potential for the digital media to flourish in the Arab world.Challenges for digital media in Middle EastAlong with advantages, Middle East also has lot of challenges providing hindrances to thegrowth of digital media in the sector.ParitoshKashyap Page 5
  7. 7. Digital Media in MENA Low broad band connectivity: It is expected that broadband connectivity will increase in the coming years; but the present penetration of 12 percentages is much lower than other developed parts of the globe. North America 64% Western Europe 61% Eastern Europe 23% Latin America 20% Asia Pacific 19% MENA 12% Africa 2% 0% 10% 20% 30% 40% 50% 60% 70%Fig 1: broad band penetration in different geographies. Source: Arab Media Outlook 2009-13 Dissimilarity in ICT infrastructure across the region: Notwithstanding thecommon socio cultural heritages, there is a high degree of economic asymmetry across the whole region. There are various economic entities- cash rich small Gulf States, North African bigger states like Egypt and Morocco which are comparatively more integrated with the world economy, developing states like Jordan and Syria with almost no oil and reserve and states like Libya and Algeria with high oil deposits but high population as well. This asymmetry is also reflected in a wide range of economic parameters such as mobile penetration, internet penetration, broad band connectivity, kind of network technology being used etc. For instance, in emerging markets like Syria and Sudan broadband penetration is less than 1 percentage; in Morocco and Jordan it is 12 and 15 percentagesParitoshKashyap Page 6
  8. 8. Digital Media in MENA respectively where as in rich Gulf States like UAE and Qatar it is 69 and 84 percentages respectively. This inherent heterogeneous nature of the ICT infrastructure across the region makes it difficult for organizations to adopt a single digital marketing strategy. (Arab media outlook 2009-13, 2009) Gap between presence and revenue: business models do not make any sense, until unless it cannot guarantee constant stream of revenue. In the MENA region, companies are finding it tough to en cash their digital presence. For instance: 85 percentages of Arab newspapers have digital presence but digital media constitutes just 2 percentages of their advertising revenue. 90 232 Mobile Content Online Content 753 Mobile Advertising 7 Online AdvertiisngFig 2: Shows the breakup of digital media revenue (in US $ million) in the MENA region, for2009. (Source: Booz & Company)ParitoshKashyap Page 7
  9. 9. Digital Media in MENA 6% 8% Rich Media 25% Email 61% Search Display/ SponsorshipFig 3: Percentage wise break up of online advertisements in MENA region. Source: Booz &Company, 2009. 7% Display SMS/MMS 93%Fig 4: Percentage wise break up of mobile advertisements in MENA region. Source: Booz &Company, 2009.ParitoshKashyap Page 8
  10. 10. Digital Media in MENA Online shopping activity is abysmally low: according to a research conducted by Neilson (comprising of 1,246 individuals from four countries- UAE, Egypt, Lebanon and Saudi Arabia) less than 1 percentage of individuals prefers engaging themselves in online shopping. (Arab Media Outlook 2009-13 , 2009) Monetization of the online content, which is somehow a challenge all across the globe, is quiet challenging in the MENA region. The prevalence of a cash based culture and low penetration of credit & debit card penetration makes it more difficult. (Arab Media Outlook 2009-13 , 2009)Internet consumption behavior of MENA usersIn order to analyze the prospect of digital media in MENA region brief overview of internetconsumption behavior of people from the region, might be helpful. In order to realize the same ,research conducted by Effective Research in conjunction with Spot on PR have been refered.(The research was conducted over a base of 2587 individuals, out of which 69 percentagescomprised of Egyptians and 20 percentages comprised of individuals from GCC. ) News Content 43% Chatting 15% Social Networking 14% Emails 8% Online Games 6% Watching Videos 4% VOIP Calls 3% Downloading 3% Listening Radio 1% 0% 10% 20% 30% 40% 50%ParitoshKashyap Page 9
  11. 11. Digital Media in MENAFig: shows the common activities on internet in the MENA region. Source: Neilson, the surveycomprised of 1,810 individuals from 4 countries- Egypt, Saudi Arabia, UAE, and Lebanon.Education level of individuals surveyed: Percentages of respondents 57% 60% 50% 40% 30% 23% 20% 12% 10% 5% 1% 2% 0% No Primary Secondary Graduate Post Trade Education Graduate CertificateFig 5: shows the education level of respondents surveyed in terms of percentages. Source:Effective Research and Spot on PR.Place of internet access Percentages of Respondents 77% 80% 70% 60% 50% 40% 30% 14% 20% 5% 2% 10% 1% 0% Home Work Internet Education On the Café Institution MoveParitoshKashyap Page 10
  12. 12. Digital Media in MENAFig 6: shows the place of access of internet of the respondentsin percentages. (Source: EffectiveResearch and Spot on PR, 2010)Respondent’s, Usage of Social Media Platform: koora.com 22% Maktoob 13% twitter 9% Linkedin 5% Jeeran 5% NETLOG 18% Facebook 70% Other International Sites 15% Other Local Sites 13% 0% 10% 20% 30% 40% 50% 60% 70% 80%Respondent’s daily consumption of other media channels. Mobile Application 54% Internet 88% Magazine (weekly) 47% Newspaper 43% Radio 27% TV 71% 0% 20% 40% 60% 80% 100%ParitoshKashyap Page 11
  13. 13. Digital Media in MENAFig 7: shows percentage of correspondents consuming various media channels on a daily basis(in case of magazine, weekly figures have been taken.) Source: Effective Research and Spot onPR.Disposition towards Internet Marketers: Highly Negative 6% Negative 9% Neutral 36% Positive 32% Highly Positive 17% 0% 5% 10% 15% 20% 25% 30% 35% 40%Fig 8: respondent’s disposition towards internet marketers.Important Conclusions:Important conclusions, drawn from the report are as follows: Majority of internet users from the region seems to begraduate or above. Hence it indicates a strong correlation between education and internet consumption. Internet is primarily used from home.ParitoshKashyap Page 12
  14. 14. Digital Media in MENA Facebook seems to be very popular across the region. The tremendous popularity of Facebook is followed by other local brands such as Kooora, Maktoob etc. Internet users from the MENA region simultaneously use a wide range of other media channels as well, such as newspaper, magazine, radio, TV, mobile applications etc simultaneously .Challenges for Digital Media: Less ad spending on digital media: So far digital media contribute a miniscule share of just 2 percentage of overall ad spending in the MENA region. In 2008, the digital advertisement investments per capita in the MENA region was just US $ 2 compared to the global average of US $ 27. (Booz & Company, 2009) Per Capita Investment in US $ UK 96 USA 64 France 22 Russia 4.9 Brazil 2.2 MENA 2 China 1.9 India 0.15 0 20 40 60 80 100Fig 9: shows per capita digital ad spend across various countries in 2008. Source: Booz &Company, 2009.ParitoshKashyap Page 13
  15. 15. Digital Media in MENA Internet penetration is comparatively low: internet penetration is increasing in the Middle East region at a very fast pace and the present penetration of 28.8 percentages is higher than the global average of 26.6 percentages. Although when compared with other developed parts of the globe, it appears to be very low. Internet Penetration in Percentages North America 76.2 Europe 53 Latin America 31.9 Middle East 28.8 Asia 26.6 Africa 8.7 0 20 40 60 80Fig 10: shows internet penetration in various geographical regions (Source: Internet World stats,2010)Social media angleThe report on digital media in the MENA region will be incomplete without understanding the“Social Media” angle. Social Media is one of the fastest growing segments of media in theMENA. Not only it is essential for business in present as well as in future; but also plays apivotal role in socio-political sphere of the region. The best exemplar could be the latest Arabrevolution, which started from Egypt & Tunisia and spread across the entire region. SocialMedia sites such as Facebook and Twitter played a major role in the revolution, eventuallyforcing the incumbent governments to step down. In a wide range of activities such as- creationParitoshKashyap Page 14
  16. 16. Digital Media in MENAof popular pages such as “We are all Khalid Said”, were aimed at- addressing political concernsof the common people, communicating across the user network to stage a mass protest on 25thJanuary to post revolution analysis and public opinion building on key issues.FacebookFacebook or FBis themost popular, social media in the MENA region, very much in line withthe general popularity, it enjoys across the globe. The region has somewhere around 15 millionFB users, with GCC countries accounting for some 5 million users (Spot On, 2010) Other thanEnglish, other popular versions of FB are French and Arabic. 2% 23% English French 50% Arabic Other 25%Fig 11: Shows the percentage wise break up of FB users in the MENA region. Source: Spot OnThe Arabic interface has been added in March, 2009. It helped FB capturing a whole new rangeof user segment. With a year of its inception, it added 3.5 million users to the existing base. TheParitoshKashyap Page 15
  17. 17. Digital Media in MENAFrench version of FB has a total of 3.7 million users and is more popular in francophonecountries such as- Algeria, Morocco and Tunisia etc. The top five user communities of FB in theregion are- Egypt, Saudi Arabia, Morocco, Tunisia and UAE. These five countries comprise of70 percentages of FB’s market in MENA region. 22% Egypt 30% Saudi Arabia Morocco UAE 15% Tunisia 10% Others 11% 12%Fig 12: percentage wise break up of FB using population of various MENA nations. Source: SpotOnConclusionAs discussed earlier, the online media/digital media segment in Middle East is in its nascentstage but the future seems to be bright. The following factors will drive/influence growth ofdigital media in the future: Young Demographics will influence growth: one of the biggest advantages of MENA region is its young demographic. More than 55 percentage of population is aged lessParitoshKashyap Page 16
  18. 18. Digital Media in MENA than 25. This young generation will be heavily influencing the growth of digital media in the region. Broad band penetration: broad band penetration, especially in comparatively bigger states like Egypt and Saudi Arabia will drive growth of digital media in the region. Europe could be a role model: Digital media has enough presence in both social as well as economical spheres of the region however the advertisement revenues are still not very high. In this regard Europe of 2000s could be perfect role model, when the advertisements revenue where low there as well. But the growth of broadband and mobile penetration pushed it further. With increasing broadband penetration and adoption of better mobile technologies, MENA can undergo the same growth trajectories. 360 degree branding: Like other parts of the world, the future of media in the region, lies in having a 360 degree presence- communicating with the audience at a wide range of touch points, such as print, TV, radio, outdoors, mobile, web etc. The brands need to continue communicating through regular media channels but at the same timeweb/digital presence is required as well. Arabic and local Content: in order to digital media (as well as other media sources to an extent) to succeed, it is essential to develop local content. According to survey conducted by Neilson, 62 percentages of respondents prefer browsing the web in Arabic rather thanParitoshKashyap Page 17
  19. 19. Digital Media in MENA English; but the region has dearth of Arabic/local digital content. (Unlike newspaper, where 90 percentages of content are local in nature). In spite of the fact that international brands like Yahoo and Facebook enjoy a high degree of popularity in the region due to their brand value and 1stmover’s advantage; penchant for local content both on and off the web cannot be discounted.In order to succeed in the coming future, it is essential to emphasis on the development of more and more local content. This requires funding, govt. support as well as developing local talent. (Arab Media Outlook 2009-13, 2009) Creating right cultural environment for web entrepreneurs to succeed: In order to develop the online media sector in Middle East, a possible step could be developing something similar to Silicon Valley. This will help nurturing young talents to develop web based start ups. In the MENA region one possible role model could be Jordan, which is taking similar initiatives. Jordan is transforming itself into a knowledge economy by- generating 6000 ICT graduates every year, attracting venture capital for web based start ups and taking a comparatively tolerant stand on media sector including the blogosphere. (Arab Media Outlook 2009-13, 2009) Nurturing Talent: one of the most essential pillars for developing the digital media in the region could be having the right talent base. Though many of the Arab/ Gulf countries are taking initiatives, there are further room for improvement. The students from the region need to be trained on a wide range of subjects such as- digital media, gaming, animation etc.References 1> Morgan Stanley, 2009, Internet trends reportParitoshKashyap Page 18
  20. 20. Digital Media in MENA 2> Arab Media Outlook 2009-13, 2009, simulating local content in Arab Media Industry, p- 169 3> Arab Media Outlook 2009-13, 2009, simulating local content in Arab Media Industry, p- 172 4> AMIR, March 2011, P-3 5> Booz & Company, 2009, Winning in MENA new media scene, p- 6> Booz and Company, 2009, Winning in MENA new media scene, p-17 7> Arab Media Outlook 2009-13, digital media, p-68 8> Spot On, 2010, Middle East and North Africa Facebook demographics. 9> Arab Media Outlook 2009-13, digital media, p-169. 10> Arab Media Outlook 2009-13, digital media, p-181ParitoshKashyap Page 19

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