Netflix: Not coming to a screen near you?

Western expats in the Middle East – a big potential market – are able to bypass local content restrictions with a VPN, viewing as if they were at home. (Shutterstock)
Updated 23 July 2018

Netflix: Not coming to a screen near you?

  • For the second quarter running – Netflix failed to hit its target for new subscribers – resulting in $30 billion being wiped off its stock market value
  • The service is not a dominant force in the Middle East and North Africa – for the very good reason that so little of its content is in Arabic

LONDON: What is going on with Netflix? On one hand, the streaming service is now so popular that Ofcom, the UK’s media regulator, says it poses a real threat to traditional television, and especially to pay-TV channels such as Sky and Virgin.

On the other hand, the numbers tell a different story. For the second quarter running, Netflix failed to hit its target for new subscribers. This resulted in $30 billion being wiped off its stock market value, fueling a debate around one question: Has Netflix hit its peak?

The service has more than 130 million subscribers around the world, but that global reach is not as global as it could be.

The service is not a dominant force in the Middle East and North Africa, for the very good reason that so little of its content is in Arabic.

According to data from IHS Markit, the Starz Play and Shahid Plus services each have more than a quarter of Internet-TV subscribers in the region, while Netflix’s share is just 16.5 percent.

 

The Netflix strategy has been to attract subscribers through the quality (generally high) of its content. That content doesn’t come cheap but it is supposed to be covered by revenue from a growing number of subscribers.

This year the Netflix budget for content — 700 original TV shows and 80 films — is $8 billion.

Though Arabic films are available on Netflix, since launching in the Middle East at the end of 2016, it has produced only one original program in Arabic, a comedy special with the Lebanese actor and comedian Adel Karam.

In February, Netflix announced its first original series in Arabic, “Djinn.” The six-part young adult fantasy adventure is directed by Lebanese director Mir-Jean Bou Chaaya, the screenplay is by Oscar-nominated writer Bassel Ghandour and the actors are Middle Eastern.

But as filming was set to start in Jordan “later this year” it has not hit the screens yet.

Little wonder, then, that Netflix is having problems competing with rivals that already offer programming more tailored to locality.

“If Netflix wants to have as much clout in the Middle East as it does in English- and Spanish-speaking countries, it will need to produce much more content than reflects the area’s culture and languages,” said Jon Fingas, associate editor of the technology news website Engadget. Netflix did not immediately provide a comment for this story.

However, Netflix appears to be addressing another reason for its failure to make the desired impact in the Arab world: Accessibility.

In a region where incomes vary greatly, not everyone can afford to upgrade their television set or buy the supplementary device required to receive Netflix.

In February, Netflix signed a deal to make its content available through Dubai-based pay-TV provider OSN. Subscribers will simply pay through their existing OSN bills.

Media analyst Ronan Shields, digital editor of The Drum, said, “Success in markets such as the Middle East and North Africa relies on localization. While this is true of anywhere, the Middle East is undoubtedly a key region where Netflix will have to focus if it is to return to growth rate that will please investors.”

Netflix also announced it intended to appoint an executive charged with sourcing local content in the MENA region. But the search “appears to be ongoing,” said Shields.

The fact that the OSN partnership was not due to kick in until the latter part of the second quarter also means it is still too early to judge if the moves have made a difference to Netflix’s fortunes, he added.

“I would expect Netflix to spend big on publicizing these utilities (and content) in the region in order to boost take-up in the region.”

How people pay for Netflix services could also hamper its penetration in the region. While the use of credit and debit cards is widespread in some parts, other parts remain cash-based.

The ability and possibly the availability of wireless networks to support streaming could be another factor, along with local censorship of content. Western expats living in the Middle East — a potential big market for Netflix — are able to bypass local restrictions on content by using a VPN, enabling them to view programs as if they were in their home country. Analysts wonder if expats would be willing to pay for Netflix content when they have alternatives to hand.

However, Gurpreet Kaur at JPMorgan Chase said there were encouraging signs for the streaming service from India, given the success of the film “Lust Stories” (launched in the last quarter) and the first original series from India, “Sacred Games,” which began on July 6. Another series, “Ghoul,” is due to launch on Aug. 24.

“We believe these pieces of content can help drive word of mouth around Netflix and build the brand in India,” said Kaur.

“Overall, while second-quarter net adds and the third quarter outlook are disappointing, we do not believe they reflect a fundamental change in the Netflix story. We continue to believe Netflix can reach 200 million global subscribers in 2021.”

FASTFACTS

130 million — Netflix’s global subscriber base / $30 billion — Drop in share price after announcing disappointing customer growth / $8 billion — Netflix’s budget for content this year / 700 — Number of original TV shows it plans to make / 80 — Number of films


Google says misinformation campaign used YouTube to target Hong Kong protests

Updated 23 August 2019

Google says misinformation campaign used YouTube to target Hong Kong protests

SAN FRANCISCO, US: Google on Thursday said it disabled a series of YouTube channels that appeared to be part of a coordinated influence campaign against pro-democracy protests in Hong Kong.
The announcement by YouTube’s parent company came after Twitter and Facebook accused the Chinese government of backing a social media campaign to discredit Hong Kong’s protest movement and sow political discord in the city.
Google disabled 210 YouTube channels that it found behaved in a coordinated manner while uploading videos related to the Hong Kong protests, according to Shane Huntley of the company’s security threat analysis group.
“This discovery was consistent with recent observations and actions related to China announced by Facebook and Twitter,” Huntley said in an online post.
Twitter and Facebook announced this week that they suspended nearly 1,000 active accounts linked to a coordinated influence campaign. Twitter said it had shut down about 200,000 more before they could inflict any damage.
“These accounts were deliberately and specifically attempting to sow political discord in Hong Kong, including undermining the legitimacy and political positions of the protest movement on the ground,” Twitter said, referring to the active accounts it shut down.
Facebook said some of the posts from accounts it banned compared the protesters in Hong Kong with Daesh group militants, branded them “cockroaches” and alleged they planned to kill people using slingshots.
China has “taken a page from Russia’s playbook” as it uses social media platforms outside the country to wage a disinformation campaign against the protests, according to the non-profit Soufan Center for research, analysis, and strategic dialogue related to global security issues.
“Beijing has deployed a relentless disinformation campaign on Twitter and Facebook powered by unknown numbers of bots, trolls, and so-called ‘sock puppets,’” the center said on its website, referring to fake online identities created for deception.
“China’s behavior will likely grow more aggressive in both the physical and virtual realms, using on-the-ground actions to complement an intensifying cyber campaign characterized by disinformation, deflection, and obfuscation.”

Misused by autocratic regimes
While social media platforms have been tools for people to advocate for rights, justice or freedom in their countries, the services are being turned on them by oppressive governments, according to the Soufan Center.
“Autocratic governments are now using these same platforms to disparage demonstrators, divide protest movements, and confuse sympathetic onlookers,” the center said.
Hong Kong, a semi-autonomous southern Chinese city and one of the world’s most important financial hubs, is in the grip of an unprecedented political crisis that has seen millions of people take to the streets demanding greater freedoms.
China’s government has publicly largely left the city’s leaders and police force to try and resolve the crisis, but behind the scenes online, Beijing is seeking to sway public opinion about Hong Kong, according to Twitter and Facebook.
“We are disclosing a significant state-backed information operation focused on the situation in Hong Kong, specifically the protest movement and their calls for political change,” Twitter said.
It said it had pulled 936 accounts originating in China that were spreading disinformation.
Twitter and Facebook are banned in China, part of the government’s so-called “Great Firewall” of censorship.
Because of the bans, many of the fake accounts were accessed using “virtual private networks” that give a deceptive picture of the user’s location, Twitter said.
Facebook said it had acted on a tip from Twitter, removing seven pages, three groups and five Facebook accounts that had about 15,500 followers.
“Although the people behind this activity attempted to conceal their identities, our investigation found links to individuals associated with the Chinese government,” Facebook said.