Market Insight

BeIn Media enters MENA entertainment content market

November 06, 2015  | Subscribers Only

Constantinos Papavassilopoulos Constantinos Papavassilopoulos Principal Research Analyst, Service Providers & Platforms

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Qatar-based media company, BeIn Media Group, announced that it is entering the movies and entertainment content market in the Middle East and North Africa (MENA) region. The announcement, which came on October 31st, marked the 12th anniversary of the BeIn Media Group. Explaining the company’s decision, CEO Nasser Al Khelaifi stated: “Our consumer research in the MENA region indicated for quite some time that families expect a leading entertainment provider like BeIn to offer a complete range of TV entertainment channels. Furthermore, we identified a sweet-spot in terms of pricing of pay TV in the region that has traditionally been over-priced”.

BeIn Media will launch a total of 24 channel featuring movies and entertainment content, all in HD. The company has not disclosed the branding of channels, though local media has reported that the movie channels will be grouped under BeIn Movies (including BeIn Movies 1 and BeIn Movies 2). The reference to a pricing “sweet-spot” suggests that the offering will be made available at an affordable rate.

BeIn Media also announced that it has secured a deal with US-based Prime Entertainment that gives the Qatari company the MENA rights to a range of US TV series–642 episodes in total. The content from Prime Entertainment will be available in Arabic, English and French in all 24 MENA territories where the BeIn Sports packages are available. BeIn Media will offer the new package to its existing BeIn Sports subscribers for free until the end of 2015.

Our analysis

For BeIn Media Group, entering the entertainment content market can be seen as an act of self-confidence. The operator, already dominant in sports broadcasting in the MENA region, is set to make an impact on the general-entertainment market as well. The plan is ambitious but BeIn Media certainly has the financial muscle to take on its pay TV and free-to-air rivals.

There is some uncertainty, however. The company is entering a market it does not know well and it does not have any experience offering subscription entertainment services. The company will be hopeful that its success in premium sport, which has cross-border appeal and has attracted large audiences in the MENA region and other markets, will translate to other programming. But gaining mass-market appeal for drama content can be tricky in a region like the Middle East, where touching cultural and religious taboos can be a cardinal sin for a broadcaster.

There are three main motivations behind the new content strategy. This first is to further solidify BeIn Media’s status as the number one pay TV operator in the MENA region and be the preferred choice for the Arab-speaking population for not only sports, but also movies, TV series and premium programming. According to IHS Television Media Intelligence, BeIn Sports is the largest pay TV operator in MENA and we expect it to end 2015 with more than 3.3 million subscribers.

The vast majority of these are in a specific demographic—male sports fans over the age of 30—hence the entry into entertainment content serves the second aim: Target a new, more female-weighted demographic. Successfully reaching this audience would allow BeIn Media to significantly expand its subscriber base.

Finally, the MENA offer will also serve as a test-bed for future global expansion. BeIn Media has made clear its intentions to expand into other territories and develop a global strategy for its media portfolio—the company wants to make its channels available in as many international markets as possible. Its expansion efforts have so far been progressing steadily, with BeIn Sport available in 32 countries. The MENA region will be the hub and the new entertainment channels and will serve to test the waters for a possible future expansion in the TV markets of Sub-Saharan Africa and Asia, regions in which BeIn Media is either already investing (Asia) or planning to invest (Sub-Saharan Africa).

As part of its strategy for moving into the entertainment content market, BeIn Media will seek to leverage a recent acquisition, Digiturk, Turkey’s largest pay TV operator. Turkish content (primarily drama) is very popular in MENA and BeIn Media plans to create synergies between its Turkish and Arabic media assets.

BeIn Media will face some challenges, though. One will be piracy—including both illegally accessing satellite signals and downloading content online—which is rampant in the region. The operator has already sought to tackle piracy by swapping out customers’ old set-top boxes (those used to access the old Al Jazeera Sports channels) for new more secure ones (Pace-manufactured HD boxes) that encrypt the BeIn Sport channels.

Another difficulty the company will face is MENA TV viewers’ expectation that content should be free. More than a thousand channels are broadcast free-to-air via satellite in the region, making the prospect of attracting paying subscribers a daunting one for a pay TV operator. Major commercial media groups, including MBC, Rotana, Abu Dhabi Media and Dubai Media Incorporated, are providing a wealth of premium movie and entertainment content for free, including US blockbusters and TV series, for free.

BeIn Media’s entry into the entertainment content market will certainly have some level of impact across the region, but it remains to be seen whether or not it will be a game changer. OSN, the pay TV operator with the highest revenues in MENA, according to IHS Television Media Intelligence, is well-placed to defend against BeIn Media’s move. It has exclusive agreements in place for first-window pay TV rights for premium content (mainly movies and TV series) with Disney-ABC Studios, NBC-Universal, Warner Bros, HBO, Paramount, Fox, Sony and MGM, and the operator also has exclusive carriage of kids channels Nickelodeon and Cartoon Network in the region.

BeIn Media Group will therefore be forced to target second-window pay TV rights, at least to begin with. This would impact commercial free-to-air broadcasters, such as MBC and Abu Dhabi Media, which tend to acquire content rights immediately after the pay TV window covered by OSN. Standalone OTT offerings such as STARZ Play, which are also focusing on bringing a raft of premium US content to MENA viewers, will come under pressure as well.

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