Dubai-based OSN signs partnership with Netflix

Netflix boasts almost 120 million users globally, but has been relatively slow to pick up subscribers in the Middle East, figures from last year show. (Reuters)
Updated 18 February 2018
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Dubai-based OSN signs partnership with Netflix

LONDON: The broadcaster OSN has signed the Middle East’s first partnership deal with US entertainment giant Netflix, signaling a shift in the region’s media landscape.

Customers of pay-TV service OSN will be able to access Netflix movies and TV shows using a new OSN box that will be launched around June of this year. Additionally, customers will soon be able to pay for their Netflix subscription through their OSN bill.

“Our partnership with Netflix marks a bold first step for industry collaboration and integration,” Martin Stewart, CEO of OSN, told Arab News.

The Netflix partnership comes amid “a shifting global media landscape that sees demand for relevant and exclusive content across multiple platforms continue to grow,” OSN added.

François Godard, an analyst at Enders Analysis, said the infrastructure of the Middle East meant the OSN-Netflix deal made sense.

“When you are in a region where broadband penetration is lower, where payment systems are less developed, it makes more sense to (partner with) an established player,” he told Arab News.

“Netflix is very opportunistic company. They believe in their model, so they are not afraid to partner with other people. We may see deals like this more in the future — why not a deal between Netflix and Sky (in the UK)?”

Change may be taking place, but Netflix has been slow to chase the MENA market, where it has seen relatively sluggish growth in subscriber numbers, according to figures published last year.

The content streaming service had only managed to attract 137,000 paying subscribers by the end of 2016 in the MENA region, according to analysis by IHS Markit. The research firm estimates that number for the region will rise to 1.29 million by the end of 2021.

IHS Markit told Arab News in July that “Netflix needs to sign deals with telcos and mobile operators for direct operator billing. This is crucial for markets like MENA and already other (video) operators (like STARZ Play Arabia, icflix, Shahid Plus, Seevii) have inked relevant deals.”

Globally, subscriber numbers are looking more rosy. Last year Netflix raced through the 100 million subscriber mark, and it now boasts almost 120 million, with its market capitalization now standing at $120 billion.

The Netflix Nasdaq-listed share price has almost doubled year-on-year, standing at $278 in after-hours trading.

“The future of the entertainment industry in the MENA region will be shaped by providers who offer value and choice at every turn,” said OSN’s Stewart.

Maria Ferreras, VP for business development for EMEA at Netflix said, “With this regional partnership and thanks to hundreds of Netflix’s original titles slated for 2018, OSN’s customers will be able to seamlessly access and enjoy all the best entertainment in one place.”

The new partnership follows a recent announcement that saw OSN partner with Lamsa, an Arabic-language children’s “edutainment” platform.

OSN confirmed to Arab News that it is continuing to explore similar opportunities.


Dubai property developers put bond plans on hold

Updated 53 min 25 sec ago
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Dubai property developers put bond plans on hold

  • Dubai property prices have fallen since a mid-2014 peak, hurt by a period of weak oil prices and muted sales
  • Residential prices fell 6 to 10 percent in 2018 and are expected to drop 5 to 10 percent more this year

DUBAI: Dubai’s Emaar Properties and state-owned developer Nakheel have put on hold plans to issue US dollar-denominated bonds, Emaar and sources familiar with the bond issues said, amid a real estate downturn and volatility in emerging markets.
Emaar told Reuters that it had put on hold a planned bond issue, blaming rising interest rates but did not elaborate. Nakheel declined to comment.
Three financial sources said the firms had planned dollar-denominated sukuk, or Islamic bonds, and would have had to pay a yield premium to attract enough investors due to concerns about Dubai’s property price slide and emerging market volatility.
Dubai property prices have fallen since a mid-2014 peak, hurt by a period of weak oil prices and muted sales, although the slide has not come close to the more than 50 percent plunge seen in 2009-2010, which pushed Dubai close to a debt default.
Residential prices fell 6 to 10 percent in 2018 and are expected to drop 5 to 10 percent more this year, according to Savills. The drop has hurt developer earnings.
Emaar, developer of Burj Khalifa, the world’s tallest building, reported a 29 percent fall in the third quarter last year, while Dubai’s second-largest listed developer DAMAC reported a 68 percent drop.
The financial sources said Emaar and Nakheel hired banks a few months ago to issue Islamic bonds but shelved the plans.
An Emaar spokesperson said its decision to put its plan on hold was not linked to the property market performance.
“The bond was considered more than a year ago and was put on hold due to increasing interest rates. The decision was not based on market conditions,” the spokesperson said.
Dubai government owns a minority stake in Emaar.
Nakheel, developer of palm shaped islands off Dubai, was one of the worst hit by Dubai’s 2009-2010 real estate crash, forcing it into a massive debt restructuring. It has not issued public debt since it nearly defaulted in 2009.
The market downturn has put pressure on property companies’ existing bonds, which investors use as a parameter to establish the price of new debt sales from borrowers in the same sector.
In secondary debt markets, yields of bonds issued by Dubai developers have risen significantly over the past few months, underperforming corporate debt from other sectors.
DAMAC’s $500 million sukuk due in 2022 and $400 million Islamic paper due in 2023 saw their yields spike by over 200 bps and 150 bps, respectively, since early November.
BofA Merrill Lynch last week forecasted weaker booked sales and gross margin for DAMAC, saying it was likely to be pressured by the property market and upcoming debt and land payments.
DAMAC did not immediately respond to a request for comment.
Yields on a $600 million sukuk issued by private developer Meraas, due in 2022, have jumped by around 120 basis points in the same period. Meraas declined to comment on the move.