By Richard Fitzgerald, founder and CEO, Augustus Media
Last year was eventful for the media landscape in the MENA region. We listed predictions for 2022 a year ago and most of it happened. Take a quick look here.
We are back with 13 predictions for the media for the year ahead.
- TikTok (Bytedance) will list publicly, most likely in China and we will see under the hood. TikTok is currently valued under Bytedance at $300bn – similar to the valuation of Meta. However, some analytics believe this is a trillion- dollar stock in the making.
- Vertical video is the standard social media consumption trend in any media format – from how podcasts get distributed, to Instagram stories, Reels, Shorts, TikToks, etc. I suspect some of the streaming services will need to think vertically as well. It is no longer the format of one or two platforms; it is ubiquitous – from publishers to influencers. The pivot to vertical in every element of content production is underway.
- The duopoly in digital advertising will come to an end. There were signs of this. Facebook and Google’s digital ad market shares are dropping. Their share of the US ad market was 54.7 per cent in 2017 and it is forecast to decline to 43.9 per cent by 2024. Worldwide, their shares dropped by 1 per cent to 49.5 per cent in 2022, according to Financial Times. This will continue. Apple’s cookie play impacted many digital platforms. Amazon has quietly built a $30bn digital ad business while Apple and Microsoft also grow their respective ad offerings. Snap’s and Twitter’s revenue is not changing much, they are significant players while TikTok has grown a lot. In this region, ad tech companies are fighting harder for what was a $4.6bn digital ad market in 2021 (IAB MENA) and now, CTV through streaming apps will make this even more competitive.
- Digital ad spend in the region will cross $6bn. At $4.1bn for full-year 2021, growing at a 25 per cent rate, with what could have been a much higher growth in 2022, we are probably already almost there.
- A headset wearable device in everyone’s home. The vast majority of us do not have a wearable headset at home currently. In 12 months, it will be very different with many of the biggest tech companies in the world set to roll out more products at competitive prices.
- A breakout viral hit for Web 3. In the digital identity space, something gamified will emerge and it will be a tipping point for tokens, driven by young people’s desire to enhance their digital identity and status online. New apps or devices ‘pop’ very quickly now, and the time needed to reach millions of users is always decreasing. We have seen Open AI’s Chat GPT programme reach 1 million users in less than a week. We can expect something similar in relation to Gen Z adopting a gamification-like service incentivised by the token economy.
- More media M&As. There is a lot of pain in the stock markets and big tech companies are lean. Some of the weaker companies will be purchased or will shut down. Look out for some streaming services being merged or other publishing businesses being acquired. More media mergers and acquisitions in Saudi Arabia are happening – see Koora.com and Football CO. SRMG acquired Saudi podcast platform Thmanyah and have been active in partnerships. There are strong independent media companies such as MICS, Telfaz and more. Watch out for some influencer brands being purchased by media companies.
- Anghami will de-list from the Nasdaq or be taken private. The general stock market downturn in 2022 was not a favorable timing for Anghami, and a price-to-earnings ratio of -207 means it could no longer meet the minimum regulatory requirements of the Nasdaq. As an alternative, an ADX listing might be a possibility.
- MBC will go public on the stock market. The biggest media company in the region will list publicly, something that has been worked on for a while. Following the opening or their new HQ in Riyadh’s Diplomatic Quarter, the sale operations split to MMS and their continued successful Shahid product and content strategy proves focus can turn to this IPO, most likely with a retail subscription element in KSA and available on the Tadawul.
- Consolidation in the streaming space. There have been 55 OTT apps launched in the last 10 years. It is expensive to run video streaming services. You can expect mergers and some smaller companies may be up for grabs. A merger could happen regionally or an international player might acquire to enter the market. Additionally, PIF was linked with a bid for BEIN sports, which is an increasingly attractive asset on the back of their World Cup success, with over 5 billion views and the popularity of their TOD streaming service.
- Disney Plus and OSN Plus will launch ads in the region. From the OTT streamers, Netflix launched ads in the US, Starzplay launched in the region and Shahid’s ad offering continued. Disney has announced that it is launching ads, and we should expect OSN to follow as well. The CTV market will grow significantly in 2023.
- Disney will make acquisitions globally. Bob Iger is back and he does three things: digital, branding content / IP and global strategy. Expect further push with Disney Plus and an IP accusation that could be interesting is Funko, the bobbleheads toy company that he and Peter Chernin, CEO of Chernin Group, are personally invested in. US analyst Scott Gallaway believes that Disney will buy Roblox, a metaverse play. With a current value of around $40 bn, it would be a big one.
- The region will have another global content hit. 2022 saw Dubai Bling go high up on Netflix’s most-watched shows globally. Original content productions are getting better and it won’t be much longer before we have a global hit for the region. The next one could very well be in Arabic. Watch out for what Netflix are doing, or even the likes of Slave produced by Shahid and the Saudi marketing in Q1 of this year.
