Global Digital Media Outlook
An integrated view crossway the media landscape has become as critical in the contemporary world like never before. The traditional media consumption is increasingly under pressure from digital with consumers facing an ever-expanding range of content choices. This swift change is creating key challenges as well as opportunities for the media industry leaders (Berglez 2013). The consumers worldwide endure to spend their hard-earned cash on entertainment and media, from obtaining broadband access to reading books, newspapers, magazines and TV subscription and satellite radio, purchasing music, playing video games and watching in-home videos (Ess 2013). On the other hand, advertisers have never stopped following consumers eyeballs and have continued to spend increasingly on advertising within such media and on out-of-home alongside digital. Accordingly, global media and entertainment spending expanded 5.80% in 2012 despite sluggish growth of economy in several economies. This stood slightly below the surges documented over past 24 months, yet still a remarkable enhancement compared to 2009, where the global recession culminated in a plunges in the entire Europe and North America (Berglez 2013). Spending growth not surprisingly vary broadly among the several regions. A 4.5% surge was recorded in North America in year 2012, albeit falling short of the global average. This was the biggest gain of the previous 5 years. The region gained from the double-digit benefits in the broadband accessibility and digital advertising alongside a TV advertising boost in the US. The latter connected to the Olympics and elections. In its entirety, EMEA surged expending by merely 3% whereby Western Europe witnessed the weakest economy, its media expenditure rose merely 9%. Such an increase remained the worst performance in Western Europe since year 2009, where expenditure dropped 1.6%. In comparison, the entire expenditure in the Middle East/Africa (MEA) surged by 21.30% in year 2012, hugely reflecting surged broadband expenditure in Middle East/North Africa (MENA). Indeed, the broadband comprised 2/3 of the entire media expenditure in MENA in year 2012, nearly thrice the global ratio of 24%. In Central and Eastern Europe, the media expenditure surged 8.50% as strong economies in Turkey and Russia propelled double-digit media expenditure growth, balancing off low-single-digit gains in other economies (Berglez 2013). Expenditure in Asia Pacific surged 8.50% in year 2012, propelled primarily by China’s growth, at 16.40%, which produced almost 1/2 o total gain. Growth in Asia Pacific with an exclusion of China hit 6.10%, more closely in alignment to global average. The best growth tale was provided by the Latin America in the region, recording a 13.30% surge in 2012. The region stays at initial phase of development than other portions of the world and double-digit surges in broadband and in-home video entertainment stood principal propellers of expenditure growth. Over the coming 5 years, global expenditure on media alongside entertainment is projected to expand at a modestly swifter 6.10% compound yearly rate, reflecting an enhancing economic climate (Ess 2013). It is anticipated that Western Europe and North America will stay the slowest-expanding regions, with low-to-mid-digit gains, however, Central and East Europe and Asia Pacific shall continue advancing at higher single-digit rates. Concurrently, Middle East/Africa alongside Latin America shall experience healthy expansion in media expenditure, accomplishing double-digit compound yearly advance to 2017.
Rise of Arab Digital Generation (ADG)
The ADG is a technology-savvy demographic borne between the years 1977 and 1997. This generation denotes 40.0 percent of the population of MENA and has distinguished itself socially, politically and economically (Sabbagh, Mourad, Kabbara, Shehadi, Samman and Insight 2012). The cultural values that have clearly shaped the Arab region remain gradually altering. Based on the latest Strategy & Survey report, it has been indicated that the traditional region’s values-acknowledged as “hospitality,” “dignity,” and “generosity” –have increasingly been supplemented by a slow emergence in “individualism”. This remains particularly true amongst the people aged between fifteen and thirty-five, whom are referred to as the ADG (Sabbagh, Mourad, Kabbara, Shehadi, Samman and Insight 2012). The change is reflected in fledgling individuals’ belief in their rights of pursuing their individual objectives and goals, to being increasingly individually-expressive as well as to value self-reliance and independence. Such a shift really matters to the media players because it changes manner in which young individuals consume- as well as create-media. This generation is growingly looking for personalized contents compared to repackaged content for MENA (Sabbagh, Mourad, Kabbara, Shehadi, Samman and Insight 2012). The generation need content which tackle their corresponding experiences, lives, perspective and where they don’t find such a content, these young people make the contents themselves. Such an impulse-alongside the accessibility ease saves to digital media-has culminated in the content assortment encompassing user-derived videos on YouTube; less-budget, award-winning feature films; alongside a range of games with the local zest.
The unexploited and ready demand for local, Arabic content is expected to outgrow the MENA regional-media to expand by bounds as well as leaps. The fast-tracked mobile technology acceptance has established opportunity crossways media platforms. The main feature defining domestically generated content is the extent to which it remains Arabic. And this remains factual crossways media, be it TV, movies, digital content or games (Lustyik and Zanker 2013). Younger individuals’ favoritism for Arabic content hugely outstrips that for English, and it remains apparent that such ready demand remains unmet. Albeit Arabic speakers denote five percent of users of Internet globally, below 1% of websites are in Arabic. Media consumers need local content even more than Arabic content: In KSA, for example, the Egyptian and American TV supplies supersede demand, as audiences remain enthusiastic for increased Gulf content. This remains a test for media players because creating domestic Arabic content needs local content availability, consistency as well as sustainability of funding, a broad array of models for financing as well as an extreme level of brand-trust alongside credibility (Lustyik and Zanker 2013).
The mobile-market remains amongst the swiftest-expanding sector in ME. Smartphones’ penetration in KSA alongside UAE has superseded seventy-five percent of populace, with over fifty-five percent of users having access to the internet on a daily basis via their smartphones (Okazaki and Mendez 2013). More significantly, maybe, the quantity of mobile broadband users have exceeded the quantity of fixed-broadband users in this region. Especially for the people that are expanding alongside mobile-media having a lasting implications for habits of consumption. Consumers remain extremely probably to play games as well as have access to social sites already on a mobile gadgets than a laptop or desktop computer. Consumption of video uptake on smartphones has been increasingly inexhaustible. With MENA regional apps-sector already gearing towards games alongside productivities or utility apps like Dropbox and Google Docs, a broad array of activities are expected to ensue on this platform. Media player must ensure mobile is integrated as an integral share of respective strategies as well as accelerate development of mobile-centric propositions (Okazaki and Mendez 2013). Simultaneously, marketers must take into account the need to integrated mobile into advertising campaigns to boots the efficiency, engagement and access.
There has been advancements in both digital and paid media thereby creating novel investment rationales. The share of the paid-media historically remained low in MENA, owing primarily to supremacy of free-to-fair satellite frequencies, lack of competitors in KSA, and absence of a “cinema going” culture in additional dense Arab States. Expenditure on leisure undertakings denote a mere 2.4% of total consumer spending, contrasted to 9% in the United States. Nevertheless, consumer expenditure and recreational activities in ME is anticipated to expand at a 10% rate yearly, substantially greater than the one in several advanced economies. Such a rate shall propel a swift expansion in paid-media. The digital content proliferation, on-the-go content demand, and surged attention on premium domestic content are buttressing its expansion. The emergence of localized, targeted as well as measurable contents remains a benefit on two-folds: Establishes a healthier consumers’ experience, buttressing their payment propensities for such content, already greater in MENA than internationally. Particularly, media spend growth per capita remains higher in several advanced markets. Advertisers are capable of reaching consumers in a more effective manner, especially with digital-content. Further, the ADG are forerunners of such a pattern. ADG remain the initial subscription-oriented OTT sites adopters, the primary demographic embracing electronic-commerce in MENA area, and the paid games primary consumers. The ADG desires a local, Arabic content and shall probably remain the primary beneficiaries of such a pattern.
Based on particular media segment, the digital media alongside audiovisual content remain poised for the utmost expansion, while regional print companies have begun feeling the pressure thereby affecting the worldwide colleagues for the past ten years. The digital media encompass apps, gaming, infotainment, e-learning, social media and e-commerce-is greatly reaping gains of ubiquitous smartphones alongside mobile broadband.
Gaming is a core driver in digital space. It is anticipated to grow from nineteen percent to twenty-two percent of digital media sector. The gaming niche of media market provides a demonstration of opportunities existing for international participants. The industry is growing more rapidly in the region than international average, surpassing even rapid-expanding emerging economies like South Korea, China, and Russia. Gaming remains the swiftest-growing niche for media in ME, anticipated to almost tripartite in size in coming months-from 1.60B dollars to 4.40B dollars between 2014 and 2022 as seen below:
The growth in boxed games shall slow during between 2014 and 2022 whereas the online and mobile games shall soar due to surged broadband-, smartphone-, Facebook-penetration and ease of purchase via mobile app stores. Over 30% of population in certain MENA region countries like Saudi Arabia, and UAE play electronic games on personal computers, tablets or computers. Particularly, the mobile opportunity in gaming is significance. Albeit console games lead the market today, mobile must become the dominant platform, taking share of the market by 2018.
The growth of online and mobile games for example, will have grown by 2022 because of such penetration as increased broadband, increased smartphones and increased Facebook. The use of purchase via mobile app stores is a factor when it comes to digital and mobile penetration.
The dynamics of Saudi/GCC viewers prefer the local Arabic content and hence have no preferences for international media contents like Netflix and HBO through the audiovisual content new trends, from smartphone to Big Screen. The dynamics dictates demand for local Arabic content, propelled by the Arab Digital Generation (Hanna, Rohm and Crittenden 2011). This has since spurred novel production in GCC outdoor the traditional production centers in Egypt. For example, standalone filmmakers in the film industry are tackling subjects that speak straight to reality of modern life in their respective countries thus winning critical acclaim within and without the region.
The telecom industry infrastructure in Saudi is strong. The internet and mobiles phones is driving the industry. Saves to the rise of Arab Digital Generation and Millennials, the KSA have the infrastructural capabilities to ensure its people get what is needed (Hanna, Rohm and Crittenden 2011). Data penetration has been made possible through increased broadband-, Facebook- and Smartphone-penetration alongside the increased ease of purchase via app stores (Joseph and Lunt 2006).
The shift in platforms is appealing to new consumers could not have utilized a console but shall time playing games online or a phone or tablet since it remains convenient to do so. The evolution in platforms is further a god news for monetization of gaming (Hanna, Rohm and Crittenden 2011).
The gap in the digital media industry market is promising and calls for diversification. The media industry players should diversify by having more of localized contents to help capture the needs of the digital generations including the millennials who are seen as the early adopters who are ready to consume paid media (Hanna, Rohm and Crittenden 2011).
Media infiltrates each aspect of millennials lives and hence it is imperative to unearth millennials behavior and attitudes when it comes to online and media platforms. All Saudi Arabia millennials were all brought up with technology, and never actually experienced a life without internet or mobile phones (Baalbaki, Merhi, Khauli-Hanna and Baalbaki 2014). Accordingly, millennials’ everyday life deeply embeds the use of technology. A great percentage of millennials are curious, tech-savvy and usually look for novel means which shall provide them with convenience and ease. This somewhat more projected among older millennials as see below:
A great portion’s usage of technology remains consistent throughout the day and remain always exaggerated when at home and have free time on hands. They are dependent on internet and cannot go a day without utilizing internet to obtain info, waste time, watch movies and read news (Kilian, Hennigs and Langner 2012). Millennials value immediate access to wealth of info from various sources. They mostly use TV to de-stress, consume time with family and watch channels which provide them a free manifold selection of programs. Millennials are gradually but surely shifting from traditional TV to alternatives which bring additional options as seen below:
KSA”s vision is a strong, thriving and stable Saudi Arabia which provides opportunity for everyone. The vision is anchored on three pillars including KSA’s status, investment power, and strategic location (Fattouh and Sen 2016). The vision anchors three themes including vibrant society, a thriving economy and an ambitious nation. Through the thriving economy pillar, KSA supports entrepreneurship by acknowledging the skills and competence of its children as amongst the most significant and cherished assets (Sait, S., Al-Tawil and Hussain 2004). Thus KSA makes the most of children potential by building an entrepreneurial culture which rewards determination, provides opportunities for everyone and helps everyone acquire the essentials which help boost SMEs. KSA Vision 2030 advocates openness to business by opening KSA for business aimed at boosting productivity and smoothening its journey to becoming one of the biggest economies globally (Fattouh and Sen 2016). This will be achieved by improving KSA’s business environment, restructuring its economic cities, creating special zones and deregulating energy market thereby making it more competitive thus promoting entrepreneurship (Gazette 2016).
The KSA has been trying to undertake effective alignment of content and at the same time advocate for enhancement of local digital and media ecosystem as dictated by the Arab Digital Generation and Millennials (Fattouh and Sen 2016). This has seen the industry players adopting new trends as opportunities to meet the ready and ever-growing demand for even the paid-media.
There is a decreasing need for theatrical distribution and box office which might attract licence for no apparent reason (Fattouh and Sen 2016). The advancement in technology and internet makes this market unattractive to the Millennials and Arab Digital Generation who are the greater consumers and early adopters.
There are potential opportunities with music, performing arts and others with the surface of General Entertainment Authority in KSA. The industry players should grab this opportunity and benefit from it effectively.
As reflected in the KSA Vision 2030, tourism is acknowledged as a promising sector that has to be launched to enhance KSA international positioning. The KSA aims at creating attractions which are of utmost international standards, improve visa issuance procedures for guests, and prepare as well as develop its historical alongside heritage sites (Fattouh and Sen 2016).
References
Baalbaki, I.B., Merhi, K.H., Khauli-Hanna, L. and Baalbaki, A.M., 2014. Understanding Media Multitasking Behaviour. LISTENING TO CONSUMERS OF EMERGING MARKETS, p.307.
Berglez, P., 2013. Global journalism: Theory and practice. Peter Lang Publishing Group.
Ess, C., 2013. Digital media ethics. Polity.
Fattouh, B. and Sen, A., 2016. Saudi Arabia’s Vision 2030, Oil Policy and the Evolution of the Energy Sector. Oxford Institute for Energy Studies, Oxford.
Gazette, S., 2016. Full Text of Saudi Arabia’s Vision 2030. Saudi Gazette, 26.
Hanna, R., Rohm, A. and Crittenden, V.L., 2011. We’re all connected: The power of the social media ecosystem. Business horizons, 54(3), pp.265-273.
Joseph, P.M. and Lunt, B.M., 2006, October. IT in the Middle East: An overview. In Proceedings of the 7th conference on Information technology education (pp. 25-30). ACM.
Kilian, T., Hennigs, N. and Langner, S., 2012. Do Millennials read books or blogs? Introducing a media usage typology of the internet generation. Journal of Consumer Marketing, 29(2), pp.114-124.
Lustyik, K. and Zanker, R., 2013. Is There Local Content on Television for Children Today?. The international encyclopedia of media studies.
Okazaki, S. and Mendez, F., 2013. Perceived ubiquity in mobile services. Journal of Interactive Marketing, 27(2), pp.98-111.
Sabbagh, K., Mourad, M., Kabbara, W., Shehadi, R., Samman, H. and Insight, I.C., 2012. Understanding the Arab Digital Generation. Booz & Company.
Sait, S., Al-Tawil, K. and Hussain, S., 2004. E-commerce in Saudi Arabia: Adoption and perspectives. Australasian Journal of Information Systems, 12(1).
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