Millennials are leading industry shift from linear television to on demand video streaming
Traditional TV in its current form will disappear over the next five-to-seven years, according to the CEO of Dubai-based streaming service Starz Play, which boasts a larger market share in the MENA region than US rival Netflix.
Speaking to Arabian Business, chief executive Maaz Sheikh said traditional TV companies would have to redefine their offerings in order to survive.
“[Traditional TV companies] really have to redefine their service to survive. They have to do something very different… I think especially in this region, we can expect both [traditional TV and streaming] services to co-exist for the next five-to-seven years,” he said.
Sheikh said millennials are leading the industry shift from linear television to on demand video streaming.
“I think [streaming] is having an impact. The industry is shifting, especially [with] the millennials. I would ask you, when was the last time sat in front of a TV and flipped channels?”
That is exactly why Starz Play is available on Etisalat’s set top boxes, because there is still a culture of tuning in to MBC at 8.00 pm or 9.00 pm or watching news or watching some current events,” he added, adding that Starz Play has partnered with 21 operators across MENA in order to tackle low credit card penetration rates in the region by providing consumers with more payment methods.
The CEO also said traditional TV will phase out once millennials become the decision makers at home. Around 80 percent of Starz Play’s audience are under 34 and between 18-25 years old.
“[TV] is part of a family experience. We see co-existence with that – a bridge until [millennials] become the decision makers in the home. And that’s happening. As much as I try to get my kids to sit around and watch something together, they go to their rooms and watch their laptops and iPads,” he said.
“One lesson learnt is to never underestimate the consumer and their choice. Essentially, what is happening is that the audience is so young...this is where awareness and convenience of payment methods come into play even more.”
Starz Play launched in Dubai in 2014 and offers thousands of blockbuster Hollywood movies, TV shows, documentaries, kids’ entertainment and dedicated Arabic and Bollywood content with the help of its main investor, US entertainment corporation Lionsgate.
Since its establishment, the streaming platform has doubled its revenue and subscriber numbers every six months. In 2018, it announced expansion plans in Africa, India and Pakistan, where it signed a joint venture with Pakistani cinema chain Cinepax to boost its potential consumer reach from 350 million to over 500 million.
The global online subscription video market (OTT) is estimated to reach $125 billion by 2025, according to a report by Grand View Research, while MENA’s OTT sector alone is expected to surge 50 percent by 2020, according to global research firm IHS Markit.
In 2018, it stood at almost 25 percent of the Pay TV sector in the region.
On-demand streaming surpassed traditional TV viewing in the UAE in 2014, according to Ericsson’s ConsumerLab TV & Media UAE Report.
By 2022, OTT subscriptions in MENA are expected to grow 80-fold from 2013, with subscribers increasing twice as fast as those of pay TV, according to a 2018 HIS market report.