Video On Demand Increasingly Popular For Gen Z In The Middle East

Published November 22nd, 2010 - 08:58 GMT
Zoran Vasiljev
Zoran Vasiljev

According to recent studies by Value Partners, a leading management consultancy firm in the Middle East, streaming Video on Demand (VOD) in the region is set to be the next most common mode of video consumption for Generation Z (Gen Z: 16 – 24 demographic) after broadcast TV, more so than using Personal Video Recorders (PVRs), watching DVDs or downloading video.
“In order to reach the internet savvy Gen Z in the Middle East, all layers of the value chain in the industry to pay attention to new usage patterns of the new generation, and how to reach them,” said Zoran Vasiljev, Managing Director, Value Partners Dubai, Value Partners, Dubai. “Like most other parts of the world, Gen Z in the Middle East is moving away from other forms of video and moving towards streaming VOD. The on – demand model should soon gain more popularity in the Middle East.” 
A recent survey done by Value Partners in the UK indicated that Gen Z are fairly open to paying small amounts (approximately c. £0.50) to watch TV content, particularly if this enables them to avoid advertising and guarantee a good picture quality. 11 per cent had paid for movies or TV content online in the past. Genres respondents were willing to pay for were films (91 per cent), sport (36 per cent), drama / soaps (30 per cent) and comedy (30 per cent).  64 per cent cited ‘you can watch in better quality’ and 59 per cent cited ‘you can skip ads’ as reasons for paying.
Value Partners suggests that Gen Z in the Middle East will be open to paying for selected VOD content, particularly if this enables them to avoid advertising and guarantees a good picture quality. Although Gen Z has not yet established a pay TV habit, they are leaning towards a more self-directed, self-selecting, ‘a la carte’ approach using micropayments. Value Partners suggest that the micropayments model can succeed in becoming significant revenue stream if VOD providers can develop sufficiently attractive services, in terms of content, price point and functionality, to attract a paying audience.
The study also shows that traditional TV stations are beginning to use social media tools to drive ratings. Audiences have always been influenced by their peer group about what to watch. For Gen Z, social networking sites are a natural place for this to occur. 
“In the Middle East, with 55 per cent of the population under the age of 25 and 70 per cent of internet users on social networks , social networking sites are an important tool for content creators and broadcasters. It is a near-instantaneous audience insight channel that opens up the opportunity to influence programme popularity through engaging with ‘opinion leaders’ and through maintaining compelling fan pages,” said Emmanuel Durou, Sr. Engagement Manager, Value Partners Dubai.
Gen Z is increasingly deserting linear TV, and multi-tasking their way through advertising breaks, making what advertising they do see less effective. This is likely to include new forms of advertising such as branded entertainment, product placement, interactive campaigns and VOD advertising. VOD CPT (Cost per Thousand) currently commands a significant premium to linear CPTs, largely due to the scarcity value. As the level of inventory increases, providers of VOD will need to develop improved targeting to maintain a premium CPT.
Value Partner recommends that traditional TV stations should further compete for the attention of Gen Z with an increasing range of interactive communication and entertainment forms, “Social networking is just the latest of these. Some broadcasters in the Middle East have jumped on the VOD bandwagon, for instance, Rotana joining forces with Yahoo! for content streaming on the online player's VOD portal. Content creators in the region and broadcasters will have to innovate to maintain viewing levels, and technology advances such as 3D and virtual reality could help to hold the attention of Gen Z,” concluded Durou.

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