Low credit card penetration makes it difficult for streaming services to achieve profitability in the region, according to Fox MENA head Sanjay Raina
The biggest fear for online streaming services in the region is consumer payment methods, according to Sanjay Raina, head of Fox Network Group for the Middle East and North Africa (FNG MENA).
Last week, FNG MENA announced that it will offer a new streaming service, Fox Plus, on MBC subsidiary Shahid Plus. The three-year agreement will see Shahid add new international content including National Geographic documentaries, Fox Lifestyle shows, Baby TV and global TV series and movies.
Speaking to Arabian Business, Raina said the region’s low credit card penetration makes it difficult for streaming services to achieve profitability.
“At its heart, Fox is a content company, so we’re sure [Fox Plus] will attract consumers’ attention, but our fear is of a different nature. Consumers in the region have a certain way of paying for services. As an industry, we need to know the best value we can extract from consumers, because at $9 per month, it’s harder for streaming services to generate value for this kind of business,” he said.
“It is something which can make you anxious about the whole long term ‘ratification of business.’ And when you go direct to consumers, they have the option to pay via credit card, but penetration is not very high in the GCC except in the UAE and a little bit in Saudi and Lebanon,” he added.
Raina suggested changes to banking regulations to make video-on-demand (VoD) services more accessible.
“[Payment methods] could be a stumbling block for a lot of these services, so regulatory banking needs to really improve for these services to become easily accessible,” he said.
He added that the absence of high speed internet is another key issue for streaming services operating in MENA.
“The program speed [is another challenge] because you want world class experience. You don’t want any buffering. In the UAE, we are used to high speed internet, but in a lot of MENA countries, broadband is an issue. But I’m sure telcos are looking at that,” he said.
Monthly prices for both Shahid Plus and Fox Plus starts at $4.99, and is payable by credit card or via integrations with telcos and carrier billing.
The partnership between the two companies comes as the online subscription video market in the MENA region is expected to increase over 50 percent by 2020.