The proliferation of digital devices is changing the viewing habits of consumers across the globe, and the UAE is no exceptions to this rising trend.

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The UAE’s Digital Revenue Rising Rapidly

Media reach across the MENA region is slowly but surely gravitating towards online and mobile content, with the rising uptake of internet and mobile digital media. While TV continues to be the most popular medium in the region with a penetration rate of more than 70%, the internet and mobile segments are growing at rapid pace, with their respective penetration rates rising to 46% and 41% in 2013 from just 32% and 23% in 2011.

The growing adoption of mobiles and smartphones in particular has been a major driver for growth in online video content. Nearly 40% of smartphone users in the MENA region use their phones for activities such as watching videos and playing online games. This trend is even stronger in the UAE, where mobile app penetration is 65%, with an average smartphone user spending approximately 13 hours per week on the mobile. In fact, the UAE is expected to lead the mobile advertising market in the MENA region by 2018, with mobile internet advertising revenue estimated to touch $494 million in the UAE, about four times higher than that of the traditional display advertising.

60% of UAE’s internet users streamed videos online in 2013

The penetration of online streaming in the UAE stood at 60% in 2013, and the proportion of users downloading content was 64%. YouTube, in particular, is very popular among internet users in the Middle East. A Google survey of YouTube users found that users in the UAE were among the most active. About 46% of YouTube users in the UAE accessed the site daily, reflecting the highest penetration rate in the MENA region—34% of YouTube users are women and 66% are men. Listening to music (71%), relaxing (68%), and staying up to date (60%) are the top 3 reasons for which respondents in the UAE used YouTube; another 41% use YouTube to look for videos on product information.

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Family-based themes rule online content viewing in the UAE

Family-based themes such as comedy, news, music, food and cooking, and drama are the most popular genres of videos viewed online. Comedy-based content is at the top of the chart, with all age groups preferring it. News videos are more popular among viewers in the above-25 age group. On the other hand, music videos and game shows enjoy the highest patronage from the under-25 age group.

As expected, it is the younger internet users who watch videos more often than their older counterparts and consider them integral to entertainment. In fact, users in the age bracket of 18–25 are almost twice as likely to watch online videos every day compared to those over 45.

It was observed that men spend nearly an hour (est. 2013) watching online videos every day compared with 33 minutes spent by women. In fact, websites providing video content are the second most popular choice among men, topped only by social networking sites. Women on the other hand spend more time on real estate sites, classifieds, and search engines.

The preference for video content also varies significantly by nationality. It was found that comedy is the only common popular genre among people of all nationalities in the UAE. Other than this, all nationality types have their own preference—UAE nationals prefer game shows; western expats prefer reality shows; Arab expats prefer drama shows, while Asians like music videos.

Growth Drivers & Challenges

Growth drivers of online video market in UAE include:

• High population growth rate
• A large percentage of youth population
• Improving quality of internet infrastructure
• Increasing number of digital devices (smartphones, tablets, phablets, etc.) per user
• Growing appetite for international services such as Google Play, iTunes, and Netflix
• Demand for video content on-the-go

Challenge:

• Even with the rising preference for digital content, the ubiquitous TV set still remains the major contender in the video market, with its reach expanding to more than 70% of the population.

Conclusion

We believe that the UAE’s online video market will continue on its strong growth path. A well laid-out telecom infrastructure, strong broadband connectivity, and the rising penetration of digital devices have created an effective delivery mechanism for the online video market. This, combined with a growing population and a large percentage of young people, will result in higher demand for online video services for the foreseeable future.

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Glasgow Research & Consulting clients are Global Fortune 500 companies, regional conglomerates and entrepreneurial ventures.The ability to anticipate competitors’ moves and analyze markets is key to winning in the Middle East & Africa region. Our biggest pride comes from helping international companies to be successful in emerging markets.