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					Arab Media
Outlook

1st International Media
Conference
Riyadh
18 May 2009


Marcel Fenez
Global Leader,
Entertainment & Media


                          PwC
Agenda/Contents


1. Introducing the Arab Media Outlook

2. Key themes from this year‟s publication

3. Regional update – projections & case studies

4. Implications for the media, investors and governments




                                                           Slide 2
                                        1 Introducing the Arab Media Outlook


Bringing PwC‟s global media thought leadership
to the Middle East




                                                                       Slide 3
                                                         1 Introducing the Arab Media Outlook


The Second Edition: Arab Media
Outlook 2008-2012…


                                  Section One: Worldview

                                  Section Two: Regional update
                                  12 countries: Bahrain, Egypt, Jordan, Kuwait, Lebanon,
                                  Morocco, Oman, Qatar, Saudi Arabia, Tunisia, the UAE and
                                  Yemen



                                  Section Three: Unlocking
                                  value – the technology
                                  challenge
   Copies can be obtained from www.pwc.com/me



                                                                                             Slide 4
                                                                     2 Key themes


Powerful forces are influencing the media,
entertainment & telecoms sectors worldwide…..
•   The digitisation of all content (voice, text, music, pictures,
    movies, maps etc)

•   The increasing importance of broadband infrastructure

•   Convergence of broadcasting and the internet

•   Delivery of digital content to mobile devices

•   The development of Web 2.0 and user-generated content

•   The rise of the “Net Generation” consumer

•   Measurement of trading currencies is even more critical

•   The impact of the global financial crisis
                                                              2 Key themes


AMO 2008-2012 focuses in particular on two
of these forces and their impact on media in
the region

  1. The development of Web 2.0 and associated rise of
     the rise of user generated content
  2. The delivery of content to mobile devices with
     broadband access to the Internet


   Underpinning both of these developments are the
     ubiquitous digitisation of all forms of content
   The delivery of content to mobile devices opens up
     exciting new opportunities for investors across the
     region
   Unlocking value will require close collaboration across
     the content production and delivery value chain
                                                                      Slide 6
                                                                      2 Key themes


The development of Web 2.0


•   Refers to changes in the ways that software developers and
    end-users use the internet

•   Web 2.0 services seek to leverage the viral nature of social
    networks to enable the distribution and creation of content
    relevant to a specific niche in a self sustaining manner

•   Lead to the development of social networks, blogs etc

•   This results in creation, posting and viewing of video of media
    marketplaces

•   Social networks have become important marketing channels
    and present competition for advertising dollars
                                                                 2 Key themes


The rise of the Net Generation Consumer


•   Consumers aged 15 to 25 who have grown up with the
    Internet and with mobile – around 20% of consumers in most
    of the region (and growing)

•   Addicted to mobile devices – expect content Anytime,
    Anywhere

•   Limited consumption of print media

•   Limited consumption of conventional
    broadcast media

•   Decreasing purchases of CD and DVDs

•   Increasingly multi-tasking

•   Increasingly snacking
                                                                                                                                2 Key themes


All these developments require high quality, affordable
broadband access , but broadband availability is limited in
       of countries by GDP per capita,
much Arab the region……. mobile and broadband penetration of population

                                       200%

                                                      Size based on GDP per cap                          UAE

                                                                                                                Bahrain
       Mobile penetration of pop (%)




                                       150%                                                   Qatar
                                                                         Saudi Arabia

                                                     Oman
                                       100%
                                                   Kuwait Jordan
                                                          Tunisia
                                                           Morocco
                                       50%           Egypt
                                                                                  Lebanon
                                                   Yemen

                                        0%
                                              0%            2%            4%            6%      8%             10%        12%
                                                                      Broadband penetration of pop (%)
 Source: PwC analysis based on data from Point Topic (2008-2Q), Global Mobile (2008-2Q), IMF.
                                                           2 Key themes


The Middle East does not yet have adequate
broadband connectivity to the global Internet…
•   January 2008 - breaks in four key undersea cables
    serving the region: FLAG (Reliance Globalcom) Europe
    Asia cable, Falcon cable (x2) , SEA-ME-WE 4 cable

•   Severe disruption to internet access across
    the region - Only one terrestrial route left working

•   Highlighted weakness in regional internet
    infrastructure and vulnerability

•   New cable systems are being built - eg Du‟s
    investment in the new US$700m Europe India Gateway
    (EIG) consortium cable system

•   Further breaks in December 2008 (SEA-ME-WE 4,
    SEA-ME-WE 3 and FLAG FEA)
                                                                    3   Regional update


Despite the economic downturn, the five year
outlook for media in the region is comparatively
positive…
•   Mobile phones will emerge as the main route to the
    internet in most countries in the region with penetration
    rates greater than 100% in 8 of the 12 countries by 2010
•   Despite the growth in Internet access, newspaper
    circulation will continue to grow – at between 1% and 2%
    a year for most countries in the region
•   Growth in advertising revenues will fall significantly in all
    the countries in 2009 but should pick up in second half
    2010 - although not at the very high levels seen in 2007
    and the first half of 2008.
•   In real terms advertising revenue growth in 2009 will be
    negative in most countries in the region
                                                                 3   Regional update


Implications for newspaper publishing



•   Consumers see breaking news as commodities – high
    value in a online or mobile
•   Consumers see high value in deep in-sight and analysis
•   Newspapers have earned readers trust and loyalty and
    can follow then online as a „trusted brand‟
•   Use of video in on-line news sites
•   Focus on cost reduction
•   Advertisers spend on-line needs to be captured by
    attractive advertising packages for both print and on-line
•   Niche audiences require specialised content and need
    hyper-sites to address this
                                                                         3   Regional update


Regional case studies: Success stories from
around the region………

  HE Queen Rania’s Video               Maktook.com
  Blog (Vlog)                          •Based in Amman, Jordan
  •Vlog on YouTube, started in         •Originated as Maktoob.mail (2000)
  2007                                 •Now developed into diverse
  •Promotes message of                 community of messaging and Wed 2.0
  international understanding          services
  •Talks directly to the camera        •Claims to be most popular Arab
  •Invites viewers to contribute       website
  content                              •Over 9m unique users in April 2008
                                       (audited figure)


         Mobile TV: UAE, Qatar
         •Early commercial trials of          SNRT, Morocco
         mobile TV on the 3G                  •Founded following
         networks                             deregulation in 2005
         •Evaluating different                •Pioneer in mobile TV
         technologies                         •Training agreement with
         •Licensing underway                  BBC World Service
         •Strong future potential
                                                            4 Implications


Future success depends on strong commitment
and close collaboration between all participants
in the content creating and distribution value
chain……
Priorities for traditional media:
•   Develop strategies for online and mobile content
    production and distribution
•   Review archive entertainment content and assess
    potential for mobile distribution
•   Repurpose content for distribution to mobile devices
•   Develop “snack TV” content for mobile-TV distribution
•   Develop best-practice online presences incorporating
    interactivity, RSS, video etc.
•   Commence the implementation of processes for
    audience measurement
                                                                4 Implications


Commitment and collaboration……


Priorities for broadband network operators and investors:

•   Expand broadband coverage and quality

•   Increase the region‟s connectivity to the global internet

•   Build micro-payment payment platforms for digital content
                                                                 4 Implications


Commitment and collaboration……


Priorities for government policy makers and regulators:

•   Actively monitor global developments in content creation
    and distribution

•   Create the regulatory environment required to encourage
    broadband investment

•   License mobile-TV network operators

•   Initiate dialogues with the private sector on the “digital
    dividend” – the re-use of analogue TV spectrum

•   Develop practical training programs for Arabic media
    professionals at all levels
                                                                   4 Implications


And finally I leave you with some questions…..


•   Is your brand identity clear and focused on what
    differentiates it from competition?
•   Are print and new media run separately or as a core activity
    with different distribution?
•   Is the ad sales team integrated?
•   Are you suing on-line to expand core audience?
•   Will video journalism and print journalism co-exist?
•   What does you audience want and what will they pay for?
•   Can areas of non-differentiation be outsourced?
•   Are there any non core activities that can be
    downsized?.......and finally

•   What sort of business will you be running in 5 years?

				
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