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Shaping the future of Saudi Arabia’s television and video content market

By Karim Sarkis and Nadim Samara

Article

Saudi Arabia’s entertainment and media (E&M) market represents a promising and unprecedented opportunity for growth and creativity. The E&M industry is already making an important contribution to national culture and economic diversification. There is an ongoing process of change within Saudi E&M, with TV going through transformation, and the over-the-top (OTT) video market expanding fast, assisted in part by new technologies. For TV and video players, now is the time to seize the moment through strong content strategies, omnichannel viewing options, attractive value propositions for advertisers, and the use of cross-industry synergies to gain access to new audiences.

 

What makes Saudi E&M so appealing is its distinctiveness. Even within the context of global media growth, and a renaissance in TV in terms of quality and cultural value, Saudi Arabia stands out because of its sophisticated and engaged audience. The country has high media consumption levels, with a notably vibrant TV and over-the-top (OTT) market, and intensive social media use. Also, Saudis are constantly connected. Smartphone market penetration is 98.2%, above the global average of 84%, while internet penetration is 97.9% (the global average is 62.5%). Significantly for TV and video players, there is still ample room for advertising to grow.

TV dominates the Saudi video market. It delivers a mass audience that crosses age and gender demographics, especially during Ramadan, and around 50% of industry revenues. According to Ipsos, Saudi TV viewers spent an average of 5.1 hours per day watching TV in 2021 and 2020, compared to 4.5 hours in 2019. Saudi Arabia also has a fast growing audience for OTT video. Digital technologies allow Saudi consumers to personalize and control what they watch. The OTT outlook in Saudi Arabia is more favorable than regional and global developments according to PwC, with revenues projected to grow at an 11.9% compound annual growth rate (CAGR) from 2019 through 2025, compared to anticipated growth in the Middle East and North Africa of 10.4%.

 

In addition, Saudis spend an average of three hours per day on social media, which explains why they have become integral elements of broadcasters’ content strategies. For instance, MBC Group, Saudi Arabia’s leading media company, is actively present on Facebook, Snapchat, Twitter, YouTube, TikTok, and Instagram—recording a 20% CAGR between 2019 and 2021 and growing further.

Given the dynamism in the Saudi TV and video market, players should consider four moves:

1. Create a strong content strategy

First, TV and video players can create a strong content strategy tailored to the tastes and preferences of local audiences. Local and regional content remains an all-time favorite, whether delivered as scripted series or other local entertainment, sports, and social programming –it always succeeds. This is evident in Gulf sitcoms like Man Huwa Waladna and Studio 22, which premiered during Ramadan 2022 and were the top-rated shows.

2. Provide omnichannel viewing experiences

Second, TV and video players can accelerate their efforts to provide omnichannel viewing experiences, which allows consumers to follow their favorite content across platforms. For instance, top-rated TV shows, such as Ramez Movie Star, which features pranks, are among the most-played videos on MBC’s Shahid streaming platform—which provides advertising-based video on demand (VOD). Content migrating from social media can also increase viewers. For example, Dr. Cash, a short online show giving financial tips, ranked among Saudi Arabia’s top 15 shows in 2021.

3. Offer a more attractive value proposition

Third, TV and video players can offer a more attractive value proposition to advertisers. Saudi Arabia’s advertising spending per capita is lower than global benchmarks. TV and video players can attract advertisers to this opportunity through alternative and less intrusive advertising, such as paid content partnerships and brand integration. For example, Oppo, the Chinese consumer electronics and mobile communications company, successfully embedded a marketing and product placement campaign in the Arabic version of the international reality competition show The Masked Singer.

Digitization is vital to the advertising market, as it allows advertisers to know viewers in a way that traditional metrics do not allow. Robust consumer intelligence and analytics will become the norm thanks to fiber optics and 5G networks, and the use of AI-powered recommendation algorithms on VOD platforms, all of which mean that advertisers and broadcasters can meet viewers’ expectations continuously.

4. Exploit cross-industry synergies

Fourth, TV and video players should consider how they can exploit cross-industry synergies to find new audiences, and to expand and differentiate their content offerings. MBC’s Shahid platform offers a notable example. As of the first quarter of 2022, a button for the Shahid TV app has been built into 1.5 million smart TV remotes, including brands such as Samsung, Hisense, Haier, Panasonic, and Changhong.

In coming years, Saudi consumers will want media experiences relevant to their interests and needs, while the Saudi TV and video market will play a significant role in national cultural development. These forces, combined with technological advances, increased competition and new advertising products, provide agile and innovative opportunities, which collaborative TV and video players can seize.

This article originally appeared in Arab News, July 2022.

About the authors

Karim Daoud is a senior executive advisor with Strategy& Middle East, part of the PwC network. Nadim Samara is Chief Operating Officer with MBC Media Solutions.

Nadim Samara

Nadim Samara

Chief Operating Officer
MBC Media Solutions, Dubai

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Karim Daoud

Karim Daoud

Partner, Strategy& Middle East

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