https://arab.news/mh7sd
Saudi Arabia’s entertainment and media market represents a promising and unprecedented opportunity for growth and creativity. The E&M industry is already essential to national culture and economic diversification.
Moreover, there is an ongoing process of change within Saudi E&M, with the TV undergoing transformation and the over-the-top video market expanding fast, assisted partly by new technologies.
For TV and video players, now is the time to seize the moment through robust content strategies, omnichannel viewing options, attractive value propositions for advertisers and cross-industry synergies to gain access to new audiences.
What makes Saudi E&M so appealing is its distinctiveness. Even within the context of global media growth and a renaissance in TV quality and cultural value, the Kingdom stands out because of its sophisticated and engaged audience.
The country has high media consumption levels, notably vibrant TV and OTT markets and intensive social media use. Also, Saudis are constantly connected.
Favorable media ecosystem
Smartphone market penetration is 98.2 percent, above the global average of 84 percent. Likewise, Internet penetration is 97.9 percent, while the worldwide average is 62.5 percent. Significantly for TV and video players, there is still ample room for advertising to grow.
TV dominates the Saudi video market. It delivers a mass audience that crosses age and gender demographics, especially during Ramadan, and around 50 percent of industry revenues. According to market research firm Ipsos, Saudi TV viewers spent an average of 5.1 hours per day watching TV in 2021 and 2020, compared to 4.5 hours in 2019.
The Kingdom also has a fast-growing audience for OTT videos. Digital technologies allow Saudi consumers to personalize and control what they watch. As a result, the OTT outlook in the Kingdom is more favorable than regional and global developments, according to PwC, with revenues projected to grow at an 11.9 percent compound annual growth rate from 2019 through 2025, compared to anticipated growth in the Middle East and North Africa of 10.4 percent.
In addition, Saudis spend an average of three hours per day on social media, which explains why they have become integral elements of broadcasters’ content strategies.
For instance, MBC Group, the Kingdom’s leading media company, is actively present on Facebook, Snapchat, Twitter, YouTube, TikTok, and Instagram — recording a 20 percent CAGR between 2019 and 2021 and growing further.
Given the dynamism in the Saudi TV and video market, players should consider four moves.
Essence of localization
First, TV and video players can create a strong content strategy tailored to the tastes and preferences of local audiences. Local and regional content remains an all-time favorite, whether delivered as scripted series or other local entertainment, sports and social programming — it always succeeds.
This is evident in Gulf sitcoms like Man Huwa Waladna, which premiered during Ramadan 2022, and Studio 22, which were the top-rated shows in 2022 to the end of May.
Second, the broadcasters can accelerate their efforts to provide omnichannel viewing experiences, allowing consumers to follow their favorite content across platforms.
For instance, top-rated TV shows, such as Ramez Movie Star, which features pranks, are among the most-played videos on MBC’s Shahid streaming platform, which provides advertising-based video on demand. In addition, content migrating from social media can also increase viewers. For example, Dr. Cash, a short online show offering financial tips, ranked among the Kingdom’s top 15 shows in 2021. Third, TV and video players can offer advertisers a more attractive value proposition. The Kingdom’s advertising spending per capita is lower than global benchmarks. They can attract advertisers through alternative and less intrusive advertising, such as paid content partnerships and brand integration.
For example, Oppo, the Chinese consumer electronics and mobile communications company, successfully embedded a marketing and product placement campaign in the Arabic version of the international reality competition show The Masked Singer.
Benefits of digitalization
Digitalization is vital to the advertising market as it allows them to know viewers in a way traditional metrics do not allow. In addition, robust consumer intelligence and analytics will become the norm thanks to fiber optics and 5G networks and the use of artificial intelligence in recommendation algorithms on VOD platforms, all of which means that advertisers and broadcasters can meet viewers’ expectations continuously.
Fourth, these content distributors should consider exploiting cross-industry synergies to find new audiences and expand and differentiate their content offerings.
MBC’s Shahid platform offers a notable example. As of the first quarter of 2022, a button for the Shahid TV app has been built into 1.5 million smart TV remotes, including brands such as Samsung, Hisense, Haier, Panasonic and Changhong.
In the coming years, Saudi consumers will want media experiences relevant to their interests and needs, even as the Saudi TV and video market will play a significant role in national cultural development.
These forces, combined with technological advances, increased competition and new advertising products, provide agile and innovative opportunities, which collaborative TV and video players can seize.
• Karim Daoud is senior executive adviser with Strategy & Middle East, part of the PwC network.
• Nadim Samara is Chief Operating Officer of MBC Media Solutions.