Digital TV penetration is set to reach 81% of Middle East and African TV households by 2016, according to a new study from Digital TV Research. It also predicts eight countries in the region, starting with Israel later year, will reach a full 100% conversion.

The region's high birth rate is also a "bonus" for the TV industry, according to researchers, with nearly 20 million TV households to be added between 2006 and 2016.

Around 500 free to air (FTA) satellite channels serve the Arab world, and over 40% of the area's TV households watch these and other free to air broadcasts. By 2016 the report suggests FTA satellite penetration will be highest in Jordan (86%), Algeria (85%) and Morocco (82%).

However, the region also suffers from content piracy and many FTA viewers also illegally access subscription only channels.

"Only 15% of TV households (analogue and digital combined) are actually paying for legitimate TV signals," said Simon Murray, the report's author. "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."

Pay TV revenues are expected to increase by over US$1 billion between 2011 and 2016, to $5.9 billion – with Turkey, Israel and South Africa accounting for the lion's share of the income. Just $1.98 billion will be spread across operators in the rest of the Middle East and Africa.

Direct to home (DTH) satellite services will recoup the largest proportion of these revenues, and are predicted to take 77% of overall pay-TV subscriptions (down from 80% in 2010).

The region's DTH operators are expected to add four million customers between 2010 and 2016, reaching a penetration rate of 13.7%.

IPTV revenues, meanwhile, will expand tenfold in the same period to reach $586 million, overtaking income from cable homes in 2015.

Cable penetration, which is currently at a lowly rate of 3% penetration in the Middle East and Africa, will drop – along with its revenue potential - over coming years, says Digital TV Research.