Demand for content on the web stretches, to some extent, to a willingness to pay for content online. However, the latest figures in the Arab Media Outlook (AMO) 2009-2013 report disclosed that between seven per cent and 28 per cent of respondents, who use the internet as a source for news, are willing to pay for that content.
It compares to the international figures in a contrasting manner where more than 40 per cent of the internet users are willing to pay for news content online and close to eight per cent are already paying for it.
In addition, international audiences are catching on the virtual world a lot more than the regional users with almost 60 per cent of the users willing to pay for the most sought-after commercial commodity on the net – theatrical movies. More than 10 per cent of net users are already buying movies online.
Regionally, while there are still a majority of consumers who are not currently willing to pay for content online, "we expect this to grow substantially as the quality of online content improves in the coming years", said the latest outlook report brought out by Dubai Press Club (DPC) recently.
Commenting on the status of internet as a platform for usage and generating revenue, Maryam bin Fahad, Executive Director of DPC pointed out that online advertising would grow in the Arab World substantially in the next five years, from the current $54 million (Dh198.34m) to $266m. Nearly 70 per cent of the industry experts interviewed in the report feel that there is a future for charging for content online in the Arab region. Furthermore, experience in other markets suggests that the current levels of willingness to pay for online content in the region are actually quite promising.
This is explained by the fact that websites do not need to charge all their customers for all their content to operate a successful business model online. Rather they could charge customers just for premium content for which they would only require a small proportion of customers to pay.
Effective monetisation of content on all platforms in the Arab region is not only impacted by demand, but will require several actions to be taken by both industry and government players on the supply side too. For the print sector, the lack of auditing as a common practice in most Arab countries has led to a market, which is not fully transparent, and, in turn, is hindering the potential for advertising revenues, the AMO report points out.
However, the sector does have a significant growth potential in terms of diversifying its products, not only on new platforms but also in the newspapers themselves.
Further monetisation of print content could also stem from diversification of news online. Although the majority of newspapers in the Arab region operate websites, the content that is found online is, on the whole, exactly the same as the content found in print editions.
The report highlights the findings and states that it has been seen from other markets that the websites, which are able to monetise online content most effectively, are those that have adapted their content to the online platform. Furthermore, successful online news content is, generally, more concise and more targeted than print content. From the market research, it is apparent that current affairs, sports and politics are the most preferred newspaper topics among males, while arts and culture, celebrity and personal/self-improvement are more popular among females. Therefore, effective exploitation of a news website could involve ensuring that advertising is targeted around the key segment at which the content is aimed.
Finally, newspaper websites could further exploit the popularity and knowledge of bloggers in the Arab region. One way of attracting users to newspaper websites could be through providing a section of the website dedicated to the aggregation of blogs, states the report.
The benefits of this concept are two-fold.
Firstly, the newspapers are providing an improved customer service to readers who save time by only accessing one website for all their news requirements. Secondly, bloggers could create a viral marketing campaign for the newspaper and its website. While a relatively small number of websites has adopted this strategy worldwide, some companies in the region have had some success by providing at least the opportunity for bloggers to interact with the website.
For example, the CNN Arabic website offers bloggers the opportunity to send in their URL, as well as provide a dedicated blogging segment on the website one day per week. The initiatives not only increase the interest of bloggers in the website, but also enable CNN Arabic to gain useful leads for news stories. This is an opportunity that could be explored further in this region and expanded to newspaper websites.
While demand for local content is high, there remain several barriers to effective monetisation on the supply side. In the TV sector, the monetisation of content faces slightly different challenges and opportunities.
The fragmentation of audiences across almost 500 FTA channels, the lack of accurate and widely accepted audience measurement systems and the inability of satellite to offer targeted advertising are all contributing to an undervalued advertising market.
Furthermore, pay-TV channels suffer from high levels of piracy in the region and strong competition from the FTA sector, which place additional pressure on their ability to monetise content effectively. The opportunities for improving monetisation of original content on TV are, therefore, manifold.
Experts have summarised their findings in the report stating monetising local content on the internet, meanwhile, remains a challenge for media companies globally, but in particular in the Arab World. Although broadband penetration in the region is increasing significantly and consumers are spending more time online, advertising has not yet caught up with consumption trends. From an advertising point of view, the web offers several opportunities for cost-efficient campaigns, particularly given the ability of the online platform to offer targeted advertising.
Web companies in the Arab region are beginning to exploit this opportunity and expect to see an increase in the number of Arabic websites targeted at specific demographic segments going forward.
Another key factor in the monetisation of online content is the lack of credit and debit cards as a popular method of payment in the Arab region. This makes the concept of charging for content online particularly challenging and will require significant developments in banking penetration and a move away from the 'cash culture' in the region.
Therefore, enabling improved monetisation of local content on all media platforms will take time and require significant effort by both industry players and governments. However, it is a key element of the local content virtuous circle, without which investment into further content cannot be made.
LOW BROADBAND PENETRATION
Although advertising on the internet will constitute a minuscule percentage of the overall advertising spend in the region, (four per cent), the AMO report termed it as significant given the low broadband penetration in the region, which is only 12 per cent currently.
The range of broadband penetration across Arab countries is extremely disparate, the report disclosed, ranging from 0-1 per cent in emerging markets such as Syria and Sudan and up to 84 per cent in Qatar.
However, broadband penetration across the board is likely to grow in every Arab country and this growth will be driven by Egypt and Saudi Arabia which together will make up 70 per cent of total broadband subscriptions by 2013.
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