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Keen interest in the latest happenings favours news services

...out-of-date and often unable to deal with recent developments such as digital TV, the Internet, mobile TV and IPTV.

A major positive for the region is that the youthful demographic skew in many countries minimizes barriers to the acceptance of new technologies. This mindset will help promote demand for important concepts such as convergence and technological upgrading.

Where the broadband infrastructure allows it, over-the-top (OTT) video services are gathering momentum, tapping into the fact that the young tend to spend more of their disposable income on new communication types, so giving these services a good chance of success. Such offerings will also benefit from the strong brands present in the region and a good deal of brand-led convergence into these new areas is anticipated.

In comparison to a start-up business, a brand already strong in one area of the media will find it relatively easier to export that brand into a new media area. Increasingly, companies established in traditional media areas will see themselves being pushed into brand diversification by demand from the growing youthful demographic.

In the longer term however OTT does have the potential to disrupt pay TV growth, particularly bearing in mind the dominance of a youthful demographic that has grown up without pay TV - so perceiving OTT as the 'norm'. Pay TV companies are already reacting with 'TV Everywhere' initiatives, which seems sensible.

Looking at content genres, the pay TV 'staples' of sport and films are important but in this often strife-torn region news is also important. There is keen interest region-wide in the latest happenings in Iraq, Iran and Israel/ Palestine and what the impact of developments in those countries may have on their own country.

The rise of devoted zones, such as the Dubai Media City, and others in Jordan, Syria and Egypt, are improving production values in the region. This will also improve the future prospects for the sector, as better quality TV, both in terms of technology and content, can only have a positive impact.

As mentioned above, long-anticipated consolidation amongst the main pay TV platforms finally took place in 2009, with Orbit and Showtime combining to create OSN, in a deal which should see the company benefit from adding Showtime's Hollywood content deals to Orbit's strength in local programming. OSN has also since added a suite of attractive entertainment channels from ART - so further expanding its Arabic-language offering. While retaining some 'direct-to-home' pay TV operations for now, ART's focus seems to be shifting away from the consumer-facing market to acting as a channel supplier for other operators.

For OSN, the most significant omission from its lineup is the most sought after sports content, particularly soccer. Much of this has been acquired by AJS and ADMC, with their state-backed operations having the financial muscle to outbid OSN, even if the business case for doing so is not there.

This type of 'vanity' operation has been a recurring theme in the region and while the creation of OSN is a move towards a commercially-run sector, there are still services operating where...

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