How Saudi Arabia’s MBC Became the Leading Streaming Service in the Middle East

Media group MBC, majority-owned by the Saudi government and listed on the Riyadh Stock Exchange, is aggressively positioning itself against Netflix to become the premier streaming service in the Middle East. Through its Shahid division, MBC commands 22% of the $1 billion Middle East and North Africa (MENA) streaming market, surpassing Starz Play Arabia and Netflix by 4% and 5%, respectively, according to Omdia.

Over the past four years, MBC has invested heavily in Shahid, banking on the platform for future growth despite its current unprofitability. Shahid reported losses of SR900 million ($240 million) between 2020 and the first half of 2023. MBC's CEO, Sam Barnett, underscores that television alone won't drive growth as viewership remains steady; instead, streaming is the future. Shahid now boasts 4.8 million paying subscribers and 20 million regular viewers of its ad-supported service, featuring popular dramas like "Love Game," an Arabic adaptation of a Turkish series.

Barnett asserts that MBC has defied skeptics who doubted its ability to compete with global giants like Netflix, Disney+, and HBO Max. The shift from television to streaming presents both challenges and opportunities, particularly in a region with unreliable TV audience data. Streaming platforms, however, provide detailed insights into viewer habits and advertising exposure.

MBC's strategy benefits from the region's demographics: over 55% of the MENA population is under 30, compared to 36% in OECD countries. These younger viewers are tech-savvy and demand high production values akin to those on Netflix. To meet these expectations, Shahid is investing in local talent and collaborating with foreign producers and directors. Shahid's financial performance is improving. Losses in the first three months of this year were SR6 million, down from SR102 million in the same period last year, while revenues rose 72% year-on-year to SR298 million, bolstered by increased advertising during Ramadan.

Karim Sarkis of Strategy& notes that Shahid's free streaming service and Arabic-language content give it a competitive edge over Netflix, which has not met expectations for commissioning Arabic content. Founded in London in 1991 as the Arab world’s first private satellite channel, MBC has navigated significant challenges, including the 2017 anti-corruption campaign in Saudi Arabia, which saw founder Waleed bin Ibrahim Al Ibrahim detained and forced to transfer assets to the government. Post-IPO, MBC's share price has increased by about 30% to SR44.

Navigating strict content regulations in the region, MBC aims to balance creativity with compliance, producing content that resonates without alienating audiences. For example, this year's Kuwaiti drama "Zawja Waheda La Takfi" (One Wife Is Not Enough) tackled polygamy sensitively. However, some content has sparked controversy, such as a mini-series on a 1988 Kuwaiti aircraft hijacking and a series about a Saudi drug trafficker.

Shahid also caters to large, multigenerational families by allowing up to 20 devices per subscription, despite challenges with password sharing. Natasha Matos-Hemingway, Shahid's Chief Commercial, Marketing and Product Officer, emphasizes the importance of finding the right balance to prevent abuse without alienating customers. In conclusion, MBC's strategic investments and focus on Arabic content position Shahid as a formidable competitor to global streaming giants, leveraging regional demographics and viewing habits to drive growth and market share.