Saudi Report 2021: A bright future, by Nielsen’s Sarah Messer

Nielsen’s managing director Sarah Messer examines what Saudi Arabia’s Vision 2030 means for the media industry.

Changes are afoot in Saudi Arabia. This is not, of course, a surprise to anyone who has been in the region for a while. When King Salman ascended to the throne in 2015, and Crown Prince Mohammed Bin Salman (affectionately known as MBS) was appointed later, in 2017, a series of decrees and announcements quickly followed, bringing change within the kingdom that would start to transform the entire landscape with historic and monumental developments.

The modernisation within the country is evident. As a resident of the UAE, I’ve been a regular visitor to Riyadh and Jeddah since 2012. Whilst pockets of conservative Saudi still exist, the excitement and anticipation from the people on the street has increasingly been there to hear for anyone who cares to ask. The Saudi taxi driver from the airport who is so happy when he considers what the changes mean for his children’s future; the Arab-expat small business owner who has spent her whole life in KSA, and who now sees new business opportunities opening up; the teenage boys and girls who can socialise at events together for the first time; and the women who have been elevated to the highest positions within government and corporations. Nielsen, as a leading market insights company, has been talking to nationals and residents of KSA, young and old, for many years on many topics, and the change in dialogue and tone is palpable. This is the new Saudi Arabia, and we’re proud of and engaged with what comes next.

The pivot point was in 2016, with the announcement of the Saudi Vision 2030. Vision 2030 is a strategic framework developed with the aim of reducing the kingdom’s reliance on oil, driving economic diversity, and developing public service sectors. There are three pillars at the heart of the Vision: to make the country the heart of the Arab and Islamic world; to become a global investment powerhouse; and to leverage the geographic positioning of the country as a hub connecting Afro-Eurasia.

More interestingly for those of us in the media business, one of the core objectives of Vision 2030 is to develop media industries and strengthen their competitiveness internationally.

The investment from the Saudi government into the sector is earmarked at SAR 3.3bn ($880m), a significant sum. Additionally, many media companies will also benefit indirectly from an expansive government-led digitisation strategy, as well as investment in new high-tech infrastructure including high-speed broadband. SMEs and entrepreneurs wanting to invest in media start-ups are encouraged to apply for financial support, with special funds allocated specifically by the Ministry of Commerce and Investment.

There are some fairly ambitious targets accompanying these goals, which have been defined for each of the years leading up to 2030 – tangible evidence of the Crown Prince’s commitment to the Vision roadmap. The goals for 2020 included an increase in the number of media and creative jobs from 10,000 to 16,000; GDP growth of media businesses from SAR 5.2bn to SAR 6.6bn ($1.8bn); and an increase in revenue contributions to the Saudi economy from 17 per cent to 42 per cent (according to the Oxford Business Group). I think we can safely assume that the year that was 2020 meant these KPIs were not fully reached, but the size of these expected achievements tells us how seriously the growth of the media industry is being taken. 

Heard of Saudi Media City? You will. Saudi Media City is located in the Diplomatic Quarter of Riyadh and is a space run by GCAM (The General Commission for Audiovisual Media) built to provide a high-tech, centrally positioned area for growing the creative and production ecosystem by attracting local and foreign talent and investment into one place. This is not a real estate project; it is designed to provide a hub for media businesses to establish themselves and grow from. It will enable cross-pollination of ideas and creativity from media organisations that want to co-exist in the same space.

So, when we look at Saudi today there is investment and opportunity opening up everywhere, directly and indirectly. The country has a young population (two-thirds of the Saudi population is under the age of 35) who are excited about their future, and who are engaging both from a business and personal perspective. The media industry has been asked to organise itself to be a player on the international stage.

Media owners and agencies are looking to innovate and reinvent themselves to stem revenue losses and return to growth. The last 14 months of the Covid-19 pandemic has been the catalyst for significant increases in digital video consumption and consumer behaviour online. Digital consumption is rapidly becoming ubiquitous. In this swirling maelstrom of activity, there are positive and exciting opportunities emerging that will
drive our industry forwards.

What does all this mean for us on the ground today? What has changed and what will it mean for the media industry?

The momentum for change is building, as can be seen by a number of recent international deals and local initiatives. Last year Netflix announced major new deals to buy Saudi content, including a five-year deal with Saudi animation studio Myrkott and a series of short films made by Telfaz11 Studios. StarzPlay saw a rapid growth in subscribers in the last 12 months, of course in-part fuelled by the pandemic, but also driven by its focus on Arabic content. Discovery has announced a multi-year strategic partnership with Saudi Telecom’s Integral Media unit for its OTT service Jawwy TV, involving some 4,000 hours of premium on-demand content. MBC has been investing in its production capacity in KSA to increase its local content creation and encourage Saudi talent. Local radio has been a hot topic in corners of the industry, as broadcasters consider the largely untapped audio market and ears to be won. Pre-lockdown, cinemas were opening up across the country and were largely packed out with viewers eager to see the latest local and international films, a trend that we expect only to grow as services on the ground open up again.

Globally, the growth of digital platforms has resulted in the fragmentation of advertising spends, and KSA has not been immune to that trend. In fact, KSA is one of the most important global markets in terms of users for the digital publishing giants. However, the growth of digital ad spend has, in turn, led to advertisers demanding accountability for the investment they are making, so even the “new” media (and it’s not really so new anymore) are coming up against a fundamental truism of media trading: a thriving media industry demands an independent, high-quality, industry-adopted audience measurement currency on which agencies can plan advertising campaigns and convey the effectiveness of those campaigns to their advertiser clients. This need has been recognised as key to supporting Vision 2030’s media ambitions.

One thing is for sure.  Now is not the time to be caught snoozing. Across industries, leaders and entrepreneurs are looking towards KSA with optimism and interest to understand where their opportunity might be. The media industry is on an upwards change trajectory. Now is the time to be curious, skill up your teams to innovate, and both drive and adopt change. The future of the media landscape in KSA looks bright.