By Bhaskar Khaund, regional head of TV & Multiscreen MEC MENA 

While free-to-air (FTA) TV continues to remain the single most consumed media type in the region (Fig.1), the viewership growth of the past in the largest and heaviest TV viewing market of Saudi Arabia even in the face of exponential growth in digital consumption appears to be behind us now.

2016 roundup

Looking at the years between 2009 – the start of a new economic environment post the oil boom years – and 2016, ratings grew at an average of 5 per cent per annum in the first four years to 2012 but has since dropped by an average of 1 per cent per annum in the following three years since. Meanwhile, viewership in the UAE and Kuwait, the other two key markets in the GCC, has been declining consistently right through the entire period. (Fig. 2)

In fact, these toplines belie the decline in practical terms. The decline at a Prime Time programme level (where budgets are placed) is significantly greater than the overall average. For example, between 2014 and 2016, the average ratings of the top ten and top twenty programmes have dropped 9 per cent and 6 per cent per annum respectively compared to the overall 3 per cent average drop overall (Fig. 3). Moreover, the measurement methodology based on respondent recall may also be overstate true viewership.

The viewership drop cuts across all demographic segments but is notably higher among Arab youth 15-24 the largest by size and the heaviest TV viewers and Arab women 20-44 a significant target audience especially for FMCG advertiser (Fig. 4).

The drops can be attributed to increased time spent on digital media in general and specifically to the easy availability and consumption of quality ‘TV’ content across a wide range of online platforms – from Over The Top (OTT) services through You Tube to piracy. For example, Views on market leader MBC’s free OTT platform Shahid has grown at 35 per cent per annum rate between 2013 and 2016.

Additionally, Pay TV too has grown on the back of aggressive content acquisition, including live sports and fresh seasons of western entertainment and ‘TV Everywhere’ digital distribution. IPTV has been rolled out successfully in the UAE and Qatar although penetration is low in the rest of the region.

All this renders the existing FTA TV fare unattractive by comparison – something which is reflected in the long term decline of genres such as News TV and Western movies and series. What drives viewership on traditional linear FTA TV is content not easily available elsewhere – first run Big Ticket reality shows and Arabic drama series, both of which albeit are also being viewed at lower levels than before. The one gainer has been Indian content, mainly Bollywood movies, which has resonated with the Saudi audiences and is the only genre that has grown over the last few years. (Fig. 5)

2017 outlook

We expect these viewership drops to accelerate into 2017 as the digital video ecosystem develops further. TV however will still remain the top media especially across less digitally developed markets in the region. Content will remain a significant challenge for FTA TV industry especially with less-than-ideal market conditions against which to monetize their content acquisition.

In this environment, ad pricing will need to be more aligned with viewership. The growth of online video and Pay TV will continue – although like their FTA counterparts, the latter will have to confront the challenge of competing online options.

Standalone digital-only ‘skinny bundle’ products will be an important part of their offering. IPTV is expected to gain some traction in Saudi Arabia this year and with such options the issue of direct Set Top Box measurability is likely to enter the conversation in 2017 as it has over the last couple of years in more developed markets.

Implications for brand marketers

It is important to take a nuanced and balanced approach to the ongoing dynamics. While the viewership drop is very real and, as explained above, effectively greater than the topline would suggest TV still remains the top medium for scale and impact.

Brands need to arrive at the optimal point between pulling all the eggs off the TV basket and overinvesting in it. This requires both in-depth analyses beyond the numbers – through consumer research, sales effectiveness studies, etc – and an understanding of the environment that TV is being consumed in today.

Whether it is in the sense of using one’s smartphone while watching TV or in the sense of watching one’s favourite show on the TV set as well as on that phone at some other time, multi screening is increasingly becoming the norm. This calls for an appropriate response on both the creative and planning fronts.

The need is to take a “Total Video’ approach to ‘TV’ planning, using offline and online channels to complement and reinforce each other. For example, given the lower and faster declining TV viewership in the Lower Gulf, a Pan Arab Satellite TV plan can be optimised through online video boost in those markets without compromising on linear TV deliveries in Saudi Arabia.

Also, brands need to get into the direct-IPTV measurement game early as and when opportunities arise. Although this base will still be low in 2017 and into the foreseeable future (Fig. 5), it will be a critical ‘learning curve’ move for the future especially for brands targeting more affluent consumers.

In conclusion, the above dynamics are not inherent to TV specifically but are part of the bigger picture of technology driving media-behavioral change in the Attention Economy where the consumer’s attention is fragmented across ever growing options. Our response needs to reflect the rest of the digital-led ecosystem in addressing the challenges and grabbing the opportunities.