Published: 07.47 Europe/London, May 30, 2011
Despite the recent social and political turmoil, rapid conversion to digital TV continues in the Middle East and Africa, according to a new report from Digital TV Research. Digital TV penetration for the 18 countries covered in the report is already approaching two-thirds of the total.
Report author Simon Murray said in a statement: “We forecast that digital penetration will reach 81% of TV households by 2016. Eight countries will achieve 100% penetration (and Israel will be the first to reach it – this year). Another bonus for the region’s TV industry is the high birth rate, with nearly 20 million TV households to be added between 2006 and 2016.”
More than 40% of TV households watch free-to-air DTH signals. There are 500 FTA channels serving the Arab world, many of which do not operate in a true commercial environment as they are funded by their local government or by a wealthy patron. Many FTA (free-to-air) DTH homes receive illegal transmissions of legitimate pay-TV services. FTA DTH penetration varies will be highest in Jordan (86%), Algeria (85%) and Morocco (82%) by 2016.
Murray added: “Only 15% of TV households (analogue and digital combined) are actually paying for legitimate TV signals. This proportion will climb only gradually to 22% by 2016. Even so, the number of pay-TV homes will nearly double between 2010 and 2016 to 21.2 million, due partly to the boom in TV households.”
Legitimate pay-TV revenues for the 18 countries will grow by more than $1 billion (€0.7 billion) between 2011 and 2016 to $5.9 billion. However, the 2016 total is only $1.98 billion once Turkey, Israel and South Africa are excluded.
DTH will continue to dominate pay-TV revenues, taking 77% of the 2016 total (though this is down from 80% in 2010). Pay DTH penetration will climb to 13.7% by 2016, adding 4 million subs between 2010 and 2016.
Cable TV is not a big business in the region. Penetration is less than 3% of TV households and this proportion will fall over the next five years as competition increases. This competition will lead cable TV revenues to fall over the next five years, especially in Israel where the government is pushing DTT to force down pay TV subscription rates.
The number of paying IPTV homes will overtake cable subs in 2015. IPTV revenues will grow tenfold between 2010 and 2016 to reach $586 million.