MENA pay TV satellite operator OSN has launched a new OTT service, dubbed "Go by OSN". Go by OSN is offered on a monthly-contract basis to non-subscribers of OSN’s satellite packages. Each new client has to pay a fee (or permission to access the service as OSN calls it) of $10 per month, after a free 7-days trial period. The service’s content offer includes US movies from Hollywood’s major studios (OSN has exclusive first-run deals with Warner Brothers, Paramount, Fox, Disney, Sony, MGM, DreamWorks Animation and Universal), popular Turkish and Arabic TV series and children’s content.
At launch, Go by OSN is available on PCs and Mac desktops and laptops, iOS Mac devices (using iOS5 and above including iPhone, iPad and iPod Touch), Android phones and tablets (including Samsung Galaxy S3, S4, Note 2, Note 3, Note 8.0, Note 10.1). The client must register online (to the website www.go.osn.com) and has the option for each account to register two devices (which will be authenticated online). Go by OSN offers also the option of dual-device viewing allowing subscribers to watch streams of two different programmes on two separate devices simultaneously. The service will be available in 22 MENA countries.
Go by OSN is the second OTT service launched by the Dubai-based operator: Multiscreen service OSN Play was successfully launched in March 2012, however it was addressed only to existing OSN subscribers (for no extra cost) and was primarily a basic catch-up TV service plus VoD library containing a selection of programmes (but not much premium content). OSN Play has acted primarily as a churn reduction mechanism.
Go by OSN on the other hand serves another goal: to enlarge the subscribers’ base of the operator by addressing the interests and needs of a specific demographic group that has been very reluctant so far to commit to a full pay TV subscription: young people (those belonging to the age bracket 20 to 35 years old) residing in the MENA region and predominantly in the Gulf States. More than 65% of the population in all MENA countries is younger than 35 years and some international statistics indicate that the age bracket 15 to 35 years old forms around 40% of the population. This young population segment is very literate in the use of digital communications technologies and the penetration of smart-phones in the Gulf countries is among the highest globally. They prefer to consume content online rather than on the TV set, albeit that consumption sometimes is directed towards illegal websites or using “grey” methods (like the use of VPN in order to mask the IP address and subscribe to OTT services like Netflix which has been reported to have attracted around 200,000 illegal subscribers in MENA).
The proliferation of illegal methods of accessing content online provides another reason behind OSN’s strategy to launch Go by OSN. The reasoning behind this move is based on the assumption that if the consumer is being offered a good deal (in terms of content and price) which in parallel is more convenient to access than any pirated option, he will choose the legal offer. The OTT service can be seen as a pre-emptive move to safeguard the customer base of the Dubai-based operator from the “encroaching” threats of the likes of Netflix or other International OTT services like the Singapore-based spuul. While Netflix has expressed no public interest in investing in the MENA region, at least in the near future, it is a fact that piracy is rampant in the Middle East. OSN had successfully tackled this threat back in 2010 by swapping its old set-top boxes with new, much harder to decrypt, boxes at a cost of almost USD60 million. OSN is also very active in a major initiative to deal with the threat of piracy participating with other major FTA and pay TV MENA operators in the Broadcasters & Satellite Anti-Piracy Coalition.
The MENA OTT market could see a competitive year in 2014. Aside from the stand-alone OTT services (including icflix, Istikana, Yahoo Maktoob, RotanaCinema.com and others) some IPTV operators are adopting a strategy of launching OTT services which target the wide public and not just their own subscribers: STC, the Saudi incumbent telco, was the first to launch such a service (MyInvision) in 2013 followed, at the beginning of 2014, by Etisalat and du in the UAE. These moves by pay TV competitors have also played a catalytic role in OSN’s decisionto launch its new service.
Although it is launching a low-cost OTT offer, OSN is aiming to avoid cannibalization of its main pay TV business model. Firstly, the majority of premium movies (very recent US blockbusters) and TV series (tfor instance top Turkish and Arabic drama series) is not included within Go by OSN, but kept exclusively for the satellite packages ‘subscribers. Secondly, Go by OSN does not offer content from the Pehla packages (the least expensive of OSN packages addressed to South Asian ex-pats).
Finally, with this move OSN is seeking to enhance its negotiation position withr the telcos in the region which carry its content to their subscribers. IHS MENA Intelligence believes that the launch of Go by OSN will reduce its reliance on alliances with some of the telcos (like Etisalat, STC and Ooredoo) and, if succesful, will offer to the satellite operator greater bargaining power in the future when negotiating its carriage deals with them.