Warner Bros Discovery's investment in OSN Streaming last week is a natural alignment, and a chance for the Dubai-based streamer to establish its identity and therefore foothold, in the fragmented yet competitive Arab streaming market.
Multiple players have been vying to claim a leading spot in the difficult-to-capture region for years. MBC Group's Shahid VIP from Saudi Arabia and Netflix from the US already claim a significant slice of the market share.
New entrants are also hedging their bets seeing untapped potential. Entertainment streamer Yango Play, owned by Russia's international brand Yango Group, made its debut in the Middle East streaming market last year with offerings that include ad-free access to popular Turkish dramas, Japanese anime and even originally produced Arabic shows and movies.
Old or new, all of them face ongoing challenges to attract loyal audiences. Disney+ from the US attempted its break in the market in 2022 with family-friendly content, yet faced struggles in capturing enough subscribers from competitors. Kuwait telecommunications company Zain faced similar obstacles after it partnered with Malaysia's iFlix in 2017. Two years later, it decided reduce its Middle East operations and shift focus to Southeast Asia.
So what do streaming companies need in order to rise above the fierce competition in the Middle East streaming market? That's the multi-million dollar question, and one that is shared in global markets similarly.
The streamers that survive will likely be the ones that have a clear identity of who they are and what they offer their customers to gain their attention, and subscription. OSN, which already has a brand for access to premium content resources with its Warner Bros and HBO Max partnership, can take it to the next level by crossing over into localised originals of the same caliber.
The $57 million investment by the American global media conglomerate Warner Bros for a one-third stake in OSN Streaming last week, is the latest agreement solidifying their partnership and synergy spanning about three years. In 2022, Warner Bros' HBO teamed up with OSN to exclusively broadcast and stream a multi-year licensing agreement. Then last year, they established exclusive film catalogue rights.
The alignment lies in their appreciation for premium content, which can be defined as exclusive high-end shows that are well written with compelling characters and usually more expensive to produce.
Think Succession, The Wire, Sex in the City, The Sopranos, or Game of Thrones – they're all award-winning shows offered by HBO Max that have exported globally and remain household names to many.
Although OSN has not created premium content originals that have definitively broken into global markets, Warner Bros' executive vice president and managing director for Central Europe, Turkey and the Middle East, Jamie Cooke, said in a statement last week that OSN has the potential and is the right partner to invest in high-quality, locally produced content to distribute globally.
As OSN Group's chief executive, Joe Kawkabani, told The National, Warner Bros' investment is an endorsement in OSN's story. One that can be told as the rapid evolution from a pay TV network, to streaming, then the launch of OSN Plus and the separation of OSN TV - all in the span of three years and with the constant of selective and quality content.
Why is creating original and localised premium content an opportune path to success for OSN? It gives it an edge of brand identify over its competitors. MBC Group's Shahid is like the Netflix of the Arab world, known to viewers for its easy to watch mainstream and entertaining content that appeals to a wide audience.
OSN could establish its own brand to attract a particular type of viewer with premium, localised content that also carries global appeal.
In the region, Turkey has successfully achieved its own title from a production standpoint as the third-largest seller of scripted shows, according to data firm Parrot Analytics in early 2024. These exports are dramas that appeal especially to female audiences and that have earned Turkey $600 million in 2022, the Istanbul Chamber of Commerce estimates.
Israel is well known for developing TV formats on a low budget that are successfully picked up and adapted internationally. Most notably is the Homeland series on Showtime in the US, which is an adaptation of Israeli drama Prisoners of War, by the Keshet Media Group.
The UAE is heavily investing to build its own homegrown, original content with Arabic language productions. STARZPLAY Arabia is an SVOD service provider that is majority owned by the entertainment arm of Abu Dhabi's E& and sovereign wealth investor ADQ. They have injected significant capital to boost STARZPLAY's content with original series such as the high production value crime/drama Baghdad Central in 2020, and horror anthology series Kaboos in 2023.
Producing this type of premium quality local content that is exportable internationally is easier said than done, and requires a level of industry infrastructure that is not readily available, nor accessible, in many Arab countries. This has generally led the regional companies to invest large amounts in the production end of titles, but not necessarily on the development that's needed to create successful originals from the region. MBC studios has aimed to do this with its invested originals, but has yet to create content that travels outside the region.
OSN has an opportunity here to leverage its partnership with Warner Bros and HBO to utilise their agencies and bring in needed talent to give them that upper edge, and create localised original content that's up to par with the US's higher end genre of content. This includes using writers, executives to identify quality storylines critical to clicking with audiences, and global celebrity actors to star in original localised productions.
It could also work with other film and show creators such as US entertainment company Miramax, co-owned by Paramount Global and beIN Media group, already known for its recognised brand of award-winning premium content for years, is conducting initial steps to utilise resources from its Los Angeles home to develop premium quality content that is localised from the region.
Warner Bros already has a commercial office in the UAE, said Mr Kawkabani, and told The National last week that OSN's deal with them involves "transfer of knowledge in a lot of areas, in particular with streaming and growth". Warner Bros is counting on OSN "for everything related to localisation", he added.
So it begs the question, what will that look like? Will it prioritise writing and development? And will OSN find a way to use this deal to achieve the ultimate goal of creating localised premium originals that can one day travel globally, sealing its brand as the region's exporter.
