MENA set for TV ad revenue boost

Informa's Middle East and Africa TV report forecasts that by 2013 a further 14 million homes will have signed up to a multichannel service, resulting in a penetration rate of 72%.

This growth is the primary stimulus for a major increase in the region's TV advertising revenues, which will grow by 73% in this forecast period, from $1.9bn in 2007 to $3.3bn in 2013.

The report also forecasts that the MENA pay TV market will grow by 38% over the six years to 2013.

Informa expects the region's 5.1 million pay TV subscribers at end-2007 to grow to more than 7 million in 2013.

Much of the growth will come from Israel and Turkey, who will account for 4.3 million pay TV homes between them at end-2013.

Adam Thomas, Informa's media research manager and author of the report, said:

"Middle East TV benefits from several encouraging factors, such as the common language and culture for much of the region and a tradition of high TV consumption. Macroeconomic factors are generally positive too and an expanding and young population is creating a media-positive environment."

While the picture is generally positive, there are also several factors hampering even more impressive 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.

This limited target audience is restricting the prospects for profitability.

According to Thomas: "Some of the major TV operators are loss-making and seem to be some way off financial self-sufficiency. But their heavyweight financial backers appear content to continue funding them indefinitely. The difficulty with this situation is that operations with a non-commercial objective compromise those with commercial strategies, so distorting the market to an extent."

The 270-page report Middle East & Africa TV (5th 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.