Dubai: Are you a video-on-demand (VOD) subscriber only for the first free month? Or someone who creates multiple email aliases or identities of family members to keep getting that free access? Or are you the sort who having signed up keeps coming back for more and willing to pay for it?
VOD providers are hoping to create more of the latter in the UAE and elsewhere in the region, as web streaming services become the fastest growing category within the entertainment space. And this is where “monthly active users” will become the benchmark of how these seen as being successful or not.
Some providers are even creating micro-content packages to make it enticing enough for viewers to come back for more... and keep paying for it. This way they don’t get to rely exclusively on per month subscriptions. A monthly subscription typically averages between Dh30-Dh50.
“We have a video platform that is based on a daily subscription model and costing Dh2-Dh3 a day,” said Sherif Dahan, regional director for over-the-top (OTT) services at Vuclip, which launched its services in the Gulf markets last October.
“These are mostly short form video content, averaging anywhere from 2 minutes to 30 minutes. These could be on cooking, fashion or music videos.
“Given the viewer mix in the region, VOD providers cannot just rely on pushing the same content for all of them. The content needs to be tailor-made to fit each viewer profile. Even if it means less of Hollywood. and more of music videos with 60-70 per cent Indian content. The nature of this market is such.”
Over the last 20 months, a handful of VOD apps — including of course, Netflix — have been vying for the Middle East viewers’ attention. With its galaxy of global hits — ‘House of Cards’, ‘Stranger Things’ (whose second season kicked off late October), and ‘Orange is the New Black’ — Netflix has muscled its way to the top of the charts.
So, will it be a case of fighting for the second spot for the others? “As Vuclip, we are not fighting for No 2... and our ambitions are justified,” said Dahan.
“Netflix has been in the business for 10 years and has a global presence. And yes, Netflix is the market leader, but it would be unfair to make comparisons.
“We started out in the emerging markets only five years ago and are there in 13 countries. Our subscriber retention rates are healthy, and even in the Gulf where we have been active for nine months.”
There is also the ever constant threat for the viewers’ entertainment needs from YouTube, and more so from the premium subscription service under the YouTube Red avatar. The service has not been launched in the UAE as yet.
Vuclip’s Gulf strategy is more or less similar to how it went about building a following in the Far East territory — make sure there are enough pricing and viewing options apart from varying the content.
Unlike the competition with their insistence on ad-free viewing, Vuclip is not averse to aligning with advertisers.
“Our Viu services are available on the app as well as on web/mobile browsers, and part of the content comes as ad-supported,” said Dahan. “And part can be viewed only behind the paywall of a monthly subscription service. We have found such a hybrid model has worked well for us.”
The numbers seem to prove so. The Gulf roll-out helped boost its overall tally of monthly active users to 6 million in March from 4 million in November last year.
“We now have 11 million quarterly paying subscribers overall,” said Dahan. “And where possible we have managed to enter into mutually beneficial alliances with telcos.
“For an OTT provider like ourselves, it is vital to have these partnerships — first it gives us the immediate reach that on our own would have taken much longer. Plus, it helps us with those subscribers who would prefer to make their payments through their telco billing rather than directly. We are fine with that.
“Telcos need us for their value-add services, and there are different telcos picking this up at different speeds. But it’s getting there.”
And then there are the benefits from ‘white-listing’. In this arrangement, telcos exclude the data consumed by the subscriber for any content provided by the OTT.
“The means the subscriber can consume any amount of data on Viu — it’s a model used widely worldwide, but not that much in the region,” said Dahan. “We have had a breakthrough with Ooredoo Oman, and hope to do the same with other regional telcos.”
One hurdle that still needs to be crossed
* Video piracy remains one of the biggest obstacles to the spread of over-the-top (OTT) service in the Middle East. “The culture of paying for digital content is slowly growing among Arabs... but we’re not fully there,” said Sherif Dahan of Vuclip. “More efforts are also being made by the community of content producers and distributors in some Middle Eastern countries for a collaborative effort to fight piracy. The rise of e-commerce has definitely played a role in establishing the notion of online payments. The same applies to in-app purchases.”
