MENA's streaming battle

Late last year, two of the MENA region’s leading streaming platforms decided it was time to team up.

OSN+, one of the region’s premier streaming platforms, with an exclusive catalogue from HBO and Paramount+ and 2.5 million+ paying subscribers, joined forces with Anghami, the Arab world’s answer to Spotify, boasting over 100 million songs and 120 million registered users.

Bundling music and movies under one umbrella is a smart, strategic play.

It’s the kind of consolidation that makes perfect sense in a fragmented market, where over 40 local streaming platforms are vying for any competitive advantage.

But is streaming really that big of a deal in MENA?

Yes. It most definitely is.

The region’s demographics alone make streaming a no-brainer.

While much of the world worries about aging populations, MENA is young and growing 📈

• More than 55% of MENA’s population is under 30, compared to just 36% in OECD countries.

• The region's population is projected to increase by 42% to 700 million by 2050.

• Internet (90%) and smartphone penetration (97%) are among the highest in the world.

It’s a perfect storm for digital media consumption.

Early movers like Shahid, StarzPlay, Netflix, and OSN+ have already captured significant attention through exclusive content and vast libraries.

But they aren’t alone.

In recent years, platforms like WATCH IT, TOD, Apple TV+, and Disney+ have also entered the race.

So, how much room is there for streaming to grow?

Well, streaming penetration in MENA was only 4% in 2022.

To put that into perspective, the US was at 81% at the same time.

In other words, the director has only just called “action!”

And this is the cast of stars you need to be keeping an eye on…

🎬 State of play

Contrary to what many might expect, Netflix — despite entering the region in 2016 — doesn’t hold the top spot in MENA’s streaming landscape.

That title belongs to Shahid, a homegrown platform owned by Saudi Arabia’s MBC Group, the region’s largest broadcaster.

Shahid commands 22% of MENA’s $1 billion streaming market.

This puts Shahid ahead of StarzPlay by 4% and Netflix by 5%, according to Omdia.

Shahid’s wide selection of original and premium Arabic content, along with licensed material from Hollywood, Turkish dramas, South Korean series, Bollywood, and Latin American TV shows, has helped the platform carve out its place as the region’s leader.

However, despite its popularity, Shahid is not yet profitable, having reported $240M in losses between 2020 and the first half of 2023.

Still, MBC is playing the long game.

As CEO Sam Barnett said recently, television is "not where we're going to get the growth from."

They’ve put their money where their mouth in, investing heavily over the last four years to cater to an ever-growing viewer base, and their platform now has 4.8 million paying subscribers, with 20 million regularly tuning into its free, ad-supported content.

StarzPlay, Shahid’s primary competitor, has experienced its own success, growing from just 100,000 subscribers in 2015 to a projected 3.5 million by 2024.

Backed to the tune of $125 million by investors like Lionsgate, State Street Global Advisors, and SEQ Capital Partners, StarzPlay saw explosive growth during the pandemic.

It took the platform five years to go from zero to 2 million minutes a day, and it took them six weeks to go from 2 million to 6.5 million.

Obviously, they benefited from the vast number of people staying home, but that doesn’t exclusively explain why a platform that I think it’s fair to say has less brand name recognition than a global streaming behemoth like Netflix thrived to such an extent.

🌍 So, how have local players remained MENA’s biggest streaming platforms?

Early mover advantage has certainly helped, but the real secret to the success of Shahid and StarzPlay lies in localisation — their ability to better understand and cater to the cultural, economic, and social nuances of the region they serve.

Here’s how they’ve done it:

1. Diverse pricing strategies and tailored plans 🌍

In a region as economically diverse as MENA, a one-size-fits-all pricing model doesn’t work.

Local platforms have embraced tailored pricing strategies that cater to different income levels across countries.

For example:

• Shahid offers a Shahid VIP Mobile plan in Egypt, targeting mobile-first users at a lower price point.

• TOD offers mobile plans in Egypt that are four times cheaper than in the UAE.

• OSN offers a unique Standard plan in Egypt, demonstrating a flexible approach.

These pricing models allow platforms to remain accessible across the region, contrasting with Netflix’s initial uniform pricing across MENA.

Although Netflix has since adapted— slashing prices in markets like Yemen, Tunisia, and Egypt — local platforms have already reaped the benefits of early localisation.

2. Partnerships with device manufacturers 📺

To further embed themselves into daily life, local platforms have partnered with device manufacturers.

Over the past number of years, Shahid has collaborated with Samsung, LG, PlayStation, Hisense, and OPPO to bundle subscriptions with devices, making content more easily accessible to users across the region.

This strategy ensures that streaming is accessible on the devices people already own, giving these platforms a competitive edge in a region where price sensitivity is high and new devices are often bundled with added value.

3. Banking and payment provider collabs 💳

Local platforms have also overcome one of the region’s key hurdles: low credit card penetration.

In countries like Egypt and Saudi Arabia, a significant portion of the population lacks traditional banking access.

To address this, Shahid has partnered with e-wallet providers like Paymob and Vodafone Cash in Egypt, while also offering prepaid cards through retail distributors like Fawry and Jarir.

These efforts make streaming more accessible to users without credit cards.

These solutions ensure that users without traditional banking can still access streaming services, something Netflix overlooked during its initial rollout in the region.

This approach is also a core strategy for 1001, an emerging Iraqi streaming platform that uses direct mobile billing (DMB) to enable access for users in Iraq’s Kurdistan region through partnerships with telcos like Korek Telecom.

By leveraging telco infrastructure, platforms like 1001 bypass the need for credit cards and instead rely on bundled mobile payments.

Eddie Maroun, co-founder of Anghami, once summed the relationship up perfectly:

“The relationship between telcos and streaming platforms is instrumental… Through one bill, where you pay for your landline or broadband, you can also access streaming services, creating more traction for these over-the-top (OTT) players.”

4. Creating local Arabic content 🇸🇦

Content localisation is one area where local platforms have an undeniable advantage.

While Netflix has increased its focus on Arabic originals, with shows like Dubai Bling and Perfect Strangers, it still trails behind the depth and resonance of local offerings.

Shahid has invested heavily in Shahid Originals, producing series like AlRawabi School for Girls and Casa Street, Morocco’s first local series on the platform.

StarzPlay, meanwhile, used viewership data to guide the production of Baghdad Central. By analysing billions of minutes of consumption data, StarzPlay identified the genres, storylines, and formats most popular with MENA audiences.

This data-driven approach led to the production of Baghdad Central, a political thriller set in Iraq and shot in Morocco.

The series, which featured Hollywood actor Corey Stoll alongside prominent Arab actors, was a hit with MENA viewers and demonstrated StarzPlay’s ability to produce content that felt both local and globally relevant.

The demand for Arabic content is growing fast — Arabic shows now account for over 25% of total content demand in MENA, nearly double the figure from 2022.

5. Hybrid business models 📊

Local platforms have thrived by offering hybrid business models that combine subscription-based (SVOD) and ad-supported (AVOD) options.

Around one-third of regional platforms provide free content supported by ads, allowing them to reach both paying customers and those seeking free, ad-supported content.

For example, Shahid has 3.4 million SVOD subscribers but reaches 16 million active users through its AVOD service. By offering both models, Shahid and other regional platforms have gained an edge over global competitors like Netflix, which relies more heavily on subscriptions.

🍿 What’s next?

Grab your popcorn, and get ready.

SVOD is expected to grow at an 18.5% CAGR, reaching $1.6 billion by 2027, while AVOD will grow at 15.3% CAGR, reaching $1.2 billion by 2027.

It’s worth bearing in mind that the opportunity isn’t just restricted to the region.

Local platforms also have the potential to expand beyond MENA, tapping into the 40 million Arabic speakers living in the diaspora.

However, with global players ramping up their efforts in the region, the road ahead will be competitive.

Local platforms will need to continue innovating and localising to maintain their slender lead.

The question remains: will platforms like Shahid and StarzPlay continue to outpace global giants, or will Netflix and Disney+ fine-tune their strategies enough to close the gap?

We speak for the local guys when we say:

“Netflix, chill.”

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