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Middle East & North African Pay TV Upside

Approximately 61 percent of Middle East and North African (MENA) TV homes currently have a multichannel TV service, according to the latest market study by Informa Telecoms & Media.

Their report forecasts that by 2013 a further 14 million homes will have signed up to a multichannel service, resulting in a penetration rate of 72 percent. This growth is the primary stimulus for a major increase in the region's TV advertising revenues, which will grow by 73 percent in this forecast period, from $1.9 billion in 2007 to $3.3 billion in 2013.

The report also forecasts that the MENA pay TV market will grow by 38 percent over the six years to 2013. Informa expects the region's 5.1 million pay TV subscribers at end-2007 to grow to more than 7 million in 2013.

Much of the growth will come from Israel and Turkey, who will account for 4.3 million pay TV homes between them at end-2013.

Adam Thomas, Informa's media research manager and author of the report, said "Middle East TV benefits from several encouraging factors, such as the common language and culture for much of the region and a tradition of high TV consumption. Macroeconomic factors are generally positive too and an expanding and young population is creating a media-positive environment."

While the picture is generally positive, there are also several factors hampering even more impressive growth -- such as the disparity, across much of the region, between the disposable income of a wealthy minority and the rest of the population.

As a consequence pay TV operators are often restricted to targeting only a relatively small proportion of wealthy locals, while also catering for a sizeable expatriate community. This limited target audience is restricting the prospects for profitability.

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