The pay TV market in the Middle East and North Africa (MENA) has seen growth in 2016. According to a new analysis from IHS Markit, pay TV households topped the five million mark for the first time in the region’s history, growing 8 percent year-on-year. Revenues rose 15 percent to USD 2.27 billion, double digit growth year-on-year.

“MENA is one of the fastest growing regions for pay TV, in both subscribers and revenues. The launch of services such as Netflix and Amazon Prime is fueling the market and is a good sign for further growth,” said Constantinos Papavassilopoulos, Senior Analyst, IHS Markit. Countries such as Saudi Arabia only second to the US in terms of time spent per person watching videos on YouTube.

IHS Markit expects that growth will continue, with pay TV homes reaching seven million in 2021, while revenues will almost double to USD 4.03 billion in 2021.

Two satellite operators, beIN Media Group and OSN, dominate the market controlling over 60 percent of subscribers and over 55 percent of revenues for the last seven years. 2016 marks the first full year that beIN Media Group and OSN competed directly against each other.

Total online video market revenues in MENA stood at USD 500 million in 2016, a year-on-year growth of 51 percent from 2015.

Advertising remains the most successful business model for monetizing online video – representing over 65 percent of total revenue in 2016. “The prevalence of advertising is corroborated by YouTube’s huge appeal in the region. Countries such as Saudi Arabia are second only to the US in terms of time spent per person watching videos on YouTube,” said Mr Papavassilopoulos

However, IHS Markit forecasts that the subscription business model will gain ground in the MENA region at the expense of advertising, with almost half of total online video revenues coming from online subscription services by 2020.

It predicts that subscription for video will drive revenue growth. “Subscription services in the region saw 137 percent growth in 2016, spurred by the launch of Netflix and strong performance from local players,” said Mr Papavassilopoulos.

Subscription accounted for over 30 percent of the total online video market in 2016, and is expected to contribute 45 percent of total market revenues by 2020.

IHS Markit expects total online video revenues to grow by more than USD 1.5 billion by 2020.