Netflix Must Invest in Arabic Content to Woo Middle East

Netflix this year hit the 100-million-subscriber mark. Growth has outstripped expectations seeing its share price rise from $158 to almost $190 in the past month. Although the company might be doing well in some parts of the world, figures show it is lagging behind in the Middle East and Arabic speaking world.

According to estimates, at the end of 2016 Netflix had only 137,000 subscribers across the whole Middle East and North Africa region (Arab News).

Why such a poor showing? Commentators see many reasons behind the low numbers.

Internet speeds in some countries will be a turn-off for any internet based entertainment company for one. Piracy is another issue, with movies, etc often being available on DVDs or to download via torrent websites. Free-to-air content is also very popular reducing any demand for paid services. Where paid services are available, local operators like OSN and beIN are attracting the most business. A larger hurdle for Netfilx though are other Over The Top (OTT) services — internet-specific entertainment providers — already working in the market including Starz Play Arabia, icflix, Shahid Plus and Seevii.

Despite the uphill challenge, the market is still seen as potentially lucrative should the right localization strategies be adopted. Arabic content is key.

“Pay-TV operators that have invested in acquiring and producing local content (such as OSN) have seen a huge increase in viewership for this particular content from their subscribers. Netflix has no option but to invest in local content in the region,” says IHS Markit analyst Max Signorelli in his interview with Arab News.

“Considering the scalability potential of Arabic content, we expect that Netflix will eventually roll out content-investment plans for the region.”

Within the industry there are expectations are that Netflix will invest some of its $6 billion content budget on Arabic content as founder Reed Hastings said publicly in April this year that the region is a “great market” and “there is strong interest in Internet video of all sorts.”

A stream of recent reports all predict the region’s market to grow over the coming years. The TV market in MENA is forecast to grow by 30 percent from 2016 to 2021, according to a report by digital economy think tank IDATE. AT Kearney predicts that the Middle East’s OTT sector could grow to $1.06 billion by 2020 were it to gain mass-market acceptance. Research conducted on behalf of (MESA) Europe expects media content localization across the EMEA region is to increase from U$2billion this year to $2.5billion before 2020.

Global entertainment companies are waking up to the fact that there are huge markets to be gained in regions such as the Middle East and North Africa; however, in order to properly access them and create a loyal, subscribing fan base, they must localize content, whether this be in the form of subtitles, voice overs or crowd-sourcing translations for games and other forms of online entertainment.

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