How Saudi Arabia’s MBC came to dominate Middle East streaming

Media group MBC is competing hard with Netflix to become the Middle East’s biggest streaming service, pushing a wide range of Arabic TV shows and films and its offer of free programmes supported by advertising. 

The Riyadh-listed entertainment company, which is majority owned by the Saudi government and is the region’s largest broadcaster, now commands 22 per cent of the Middle East and north Africa $1bn streaming market through its Shahid division. This puts it 4 per cent ahead of regional rival Starz Play Arabia and 5 per cent ahead of Netflix, according to industry analyst Omdia. 

MBC has poured money into streaming in the past four years, pinning its hopes for growth on Shahid, which is not yet profitable, to cater for increasing viewer numbers, particularly in the oil-rich Gulf states. Shahid reported SR900mn ($240mn) in losses between 2020 and the first half of 2023.

Television is “not where we’re going to get the growth from”, MBC’s chief executive Sam Barnett told the Financial Times. “We’re getting similar [TV] viewership we had in previous years. We’re maintaining market share. It’s the media that is changing . . . we are seeing the shift of people to using [streaming].”

Shahid says it now has 4.8mn paying subscribers in the region, while 20mn regularly watch its advertising-supported streaming service, which attracts viewers with long-running dramas such as Love Game, an Arabic version of a Turkish series about a woman’s attempts to marry a rich shoe designer to help her indebted brother.

Barnett said MBC had defied critics who said “the global streamers are coming to eat your lunch. You are this parochial Middle Eastern company. There’s no way you can stand up to . . . Netflix and Disney+ and HBO Max.”

The shift from television to streaming has challenged broadcasters worldwide, but in a region lacking reliable TV audience data, it also presents an opportunity. Viewers in the Middle East’s more than 20 countries are polled only occasionally, often through surveys commissioned by media companies themselves. But streaming services allow media companies to see what customers are watching and how much advertising they are exposed to.

MBC’s streaming bet is also helped by demographics: more than 55 per cent of the Middle East and north Africa’s population are under 30, compared with 36 per cent across OECD countries. They are both digital savvy and keen for content, while expecting the same high production values they see on the likes of Netflix. To meet these expectations, Shahid is funding local talent as well as recruiting foreign producers and directors to make content.

Barnett described management’s approach to making new programmes as “constructively paranoid about everything”, adding that to try to keep spending at reasonable levels “I have all the creatives in the room, and then I sit them down with the accountants. And we have difficult meetings.”

That approach appears to be working. Shahid lost SR6mn in the first three months of this year, but the figure is improving as subscription and advertising revenues rise. Losses for the same period last year were SR102mn. At the same time, revenues rose 72 per cent year on year to SR298mn, boosted by Ramadan falling in the first quarter. Families traditionally tune in to month-long TV series during that time, making it a top period for advertising spending.

Karim Sarkis, a media and entertainment specialist at consultancy Strategy&, said Shahid’s free streaming service and Arabic-language shows and films are helping it compete with Netflix.

Those anticipating that Netflix would commission large amounts of Arabic language content have been disappointed, Sarkis said, while “MBC have also woken up in the meantime . . . if they continue competing in the same way . . . I think the [long term] winner is going to be Shahid”.

Founded in London in 1991 as the Arab world’s first private satellite channel, the Middle East Broadcasting Corporation was an unusual commercial player in a regional media industry dominated by state-owned networks — that are crucial for projecting soft power — and billionaires’ vanity projects.

Its recent history has had TV-worthy moments of drama. In November 2017, founder and chair Waleed bin Ibrahim Al Ibrahim was caught up in an anti-corruption campaign orchestrated by Crown Prince Mohammed bin Salman, where hundreds of members of Saudi Arabia’s elites were detained in the Ritz-Carlton hotel and forced to transfer cash and assets to the government.

Following the incident, Ibrahim’s ownership fell from 100 to 40 per cent of the company while an investment company owned by the finance ministry took the other 60 per cent. It sold a part of that stake in an initial public offering last year and since the listing, MBC’s share price is up about 30 per cent to SR44.

The government still owns more than half of MBC’s shares but Ibrahim retained the chairmanship and is actively involved in the business. Barnett said: “Like many big media moguls, he has strong opinions on content.”

Gauging which shows will work is critical, Barnett said. Many countries in the region have strict content rules and some streamers have been rebuked by regional regulators for showing scenes such as same-sex kissing. In 2019, Netflix was forced to remove an episode of a comedy show after a complaint by Saudi Arabia, adding to concerns about political interference.

MBC and Shahid try “to approach the line, but not fall over it so you are alienating your audiences”, Barnett said, citing this year’s Kuwaiti drama Zawja Waheda La Takfi (One Wife Is Not Enough), which tackled the subject of polygamy.

But some of Shahid’s original content has caused controversy. A mini-series on the 1988 hijacking of a Kuwaiti aircraft was pulled in response to protests from the country’s information ministry. The streamer also delayed showing a major television series in early 2021, based on the true story of a Saudi drug trafficker, after his tribe said it was insulting.

Beyond content, Shahid has tried to cater to the large and often multigenerational families in the region by allowing up to 20 devices to connect to each subscription.

“We are trying to establish what’s the right balance, because like all streamers, we also see abuse of password sharing,” said Natasha Matos-Hemingway, chief commercial, marketing and product officer of Shahid. However, “we’d be hurt very badly if we were to reduce [device allowances] to like two or three”.