Strong growth forecast for MENA pay TV

The fourth edition of Informa Telecoms & Media's Middle East and Africa TV report shows that the region's 4.5 million pay TV subscribers at end-2006 will grow to 6.1 million in 2012. Much of the growth will come from Israel and Turkey, who will account for 4.2 million pay TV homes between them at end-2012.

The Informa research also discovered that, of the region's 54.8 million TV homes, 30.5 million have a multichannel TV service - giving a 55.5% penetration rate. By 2012, that number will approach 40 million, giving 62.3% penetration.

Adam Thomas, Head of Media Research: Middle East Markets and author of the report, said: "The MENA TV sector is starting to benefit from market liberalisation, improving sophistication in technology and content and some signs of a more receptive stance towards foreign investment."

The report identifies several other positive factors for the region, including: a common language and culture for much of MENA, media-friendly demographics weighted towards young adults, a tradition of high rates of TV consumption and the area's relative wealth - driven by oil revenues.

Adam Thomas, Head of Media Research: Middle East Markets

"In the Gulf region Qatar is the most advanced pay TV market. It has more than 40% of homes taking pay TV, which places it second to Israel in the whole of the Middle East and Africa. Behind Qatar comes the UAE, with almost a quarter of households subscribing to pay TV. The biggest market is Saudi Arabia, with more than 250,000 pay TV subscribers, although that represents less than 7% of TV households - meaning there is lots of room for expansion."

Pay TV subscribers
(000) 2006 2012
Israel 1,468 1,740
Turkey 1,730 2,497
Levant 127 217
Gulf States 629 849
North Africa 546 804
Total MENA 4,499 6,106
Source: Informa Telecoms & Media

But there are several factors inhibiting even greater growth - such as the disparity, across much of the region, between the disposable income of a wealthy minority and the rest of the population. As a consequence pay TV operators are often restricted to targeting only a relatively small proportion of wealthy locals, while also catering for a sizeable expatriate community.

According to Thomas: "In recent years we've seen the pay TV companies cutting their prices to bring in subscriber numbers. This has successfully added customers at the lower end, but further discounts are not viable, meaning they will have much more difficulty attracting subscribers from now on."

The 220-page report Middle East & Africa TV (4th Edition) is published by Informa Telecoms & Media. It analyses the region's 16 leading MENA markets - as well as developments across Sub-Saharan Africa. Informa produces several media business publications, including Television Business International, New Media Markets and TV International.