Market Insight

OSN launches new OTT platform WAVO

August 17, 2017  | Subscribers Only

Max Signorelli Max Signorelli Research Analyst – Home Entertainment, IHS Markit

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Middle East and North African pay TV provider OSN has launched a new online video service WAVO. WAVO offers access to TV, movie and sport content on a subscription basis without need of a fixed, long-term contract.

Users can choose between three core monthly passes, WAVO Entertainment, WAVO Movies and WAVO Sports, as well as two additional packages. Packages are priced at $9.99, $6.99 and $13.99 per month respectively with a 14-day free trial. The WAVO Sports package also allows daily and weekly access for $4.99 and $7.99 respectively. Additional packages include a monthly subscription to WWE Network priced at $9.99 per month and a transactional ‘Box Office’ option.

WAVO is available in 19 countries in the Middle East and North Africa (Box Office add-on is not available in Egypt, Iraq or Jordan) online on PCs and Macs as well as through an app on iOS, Android, selected Humax set top boxes and will be coming soon to Samsung and LG smart TVs.

Our analysis:

WAVO’s launch comes 6 months after a price reduction on its parent’s pay TV packages as a part OSN’s strategy, attempting to appeal to the ever-growing young audience in MENA region. WAVO’s predecessor, Go by OSN, was unable to make a significant impact on the MENA OTT market, competing with the likes of Icflix, Starz Play Arabia and more recently Netflix and Amazon Prime Video.

IHS Markit believes that one of the main reasons for low uptake of Go by OSN was its price. The service was priced at $10 per month, providing subscribers with access to TV and movie contents. That set Go by OSN as one of the most expensive subscription video packages on the market, superseded only by a Netflix’s premium tier subscription ($11.99 per month) and Starz Play Arabia at launch (which subsequently reduced its price from $13.99 to $7.99 per month in 2016). While WAVO’s new packaging structure allows customers more choice of which content they wish to consume, the associated price is now much higher relative to Go by OSN - nearly $17 for both TV and movies packs. This price point reflects OSN’s wealth of premium content, including HBO’s Game of Thrones and Netflix’s House of Cards as well as movie deals with the likes of Warner Brothers, Fox and Disney. A high price might be OSN’s attempt to prevent self-cannibalisation of its pay TV packages. In some MENA countries, these pay TV packages can cost as little as $15 for a basic package and an additional $12 for a premium entertainment package that would include access to the OSN multiscreen service OSN Play. Go by OSN did not offer sports shows either and the WAVO Sports package allows OSN to show off its sports rights outside of the pay TV environment with users having access to 8 live sport channels reportedly including 24/7 cricket. WAVO is targeting cord cutters as well as those who have never had a pay TV package, a group represented largely by the new generation of young adults in the MENA region.

WAVO will not only be competing with the main standalone subscription video services but also with its main pay TV rival beIN Media and their bundled and standalone offer beIN CONNECT. beIN Connect also offers daily, monthly and annual packages for non-pay TV subscribers, priced at $8, $18 per month and $180 per year respectively. beIN CONNECT subscribers have access to both TV and sport content through four entertainment and seventeen beIN Sports HD channels. The divisor between OSN and beIN is certainly that of entertainment vs sports as OSN offer the likes of HBO’s Game of Thrones and Netflix’s House of Cards and beIN offer exclusive sports offers such as the UEFA Champions and Europa Leagues for MENA. OSN’s strategy for offering different content types under different packages reflects that of pay TV companies such as Sky in Europe who have seen success with its NOW TV and Sky Ticket offerings.

One way online video companies can make their content more accessible for customers in MENA is to offer means of purchasing that is not through credit or debit cards. Examples of this are reasonably common in MENA with services striking deals with local telecoms companies for direct operator billing. Most recently, Iflix launched its service in MENA in partnership with Zain. Some such as Starz Play Arabia even offer pre-paid cards for temporary access. OSN claim additional payment methods are coming soon and it is possible that these methods could reflect those used by its competitors in the region.

The changes OSN have made so far show a strong attempt to make content accessible to a prevalent audience in MENA. In a region with rampant piracy and a love of free to air content, appropriate pricing will be key to success and OSN will need to justify its relatively high price point with high quality and premium content.

Organization
OSN
Research by Market
Media & Advertising
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