A new report from PwC highlights how online platforms are starting to fill the huge demand for youth-oriented Arabic content that is not being met by the traditional film and TV industries across the Middle East.

Launched at Dubai Film Market (DFM), PwC’s ‘Global Entertainment & Media Outlook’ report found that filmed entertainment in the Middle East & Africa is growing at a rate of 7.2%. But growth in the film industry is being held back by a lack of cinemas, available talent and financing across the region.

Starting from a very low base, Saudi Arabia is the fastest growing market – not just in the Middle East – but also globally, with a compound annual growth rate (CAGR) of 36%. But as the territory doesn’t have any cinemas, the growth mostly stems from the rapid take-up of electronic video.

Meanwhile, Saudi-based online entertainment networks such as UTURN and Telfaz 11 are witnessing huge growth in subscriptions, compared to traditional media.

Subscriptions to Telfaz 11 grew by 26% in 2014 compared to the previous year, while UTURN experienced subscriptions growth of 17%. In comparison, subscriptions to satellite TV grew by only 2.3% over the same period, while pay-TV was up by 10%.

And while Arab youth may be turning en masse to online videos, the report also found that demand for local-language movies remains high across all age groups in the biggest markets in the region.

In Saudi Arabia, 89% of respondents said they preferred Arabic movies to Hollywood (46%) or Bollywood (15%). In Egypt, demand is even higher with 96% of respondents preferring Arabic movies, compared to Hollywood (42%) and Bollywood (15%).

However, demand is not being met - Saudi Arabia produces very few films, while production volume in Egypt, traditionally the largest producer in the region, has been declining during the past few years of political turmoil.

The report also found that Lebanon is the most heavily screened territory in the region, but still only has 45 screens per million inhabitants, followed by the UAE with 39 screens per million and Turkey with 26 screens per million.

“While Egypt has been the traditional leader of Arabic films, the UAE has played an active role in recent years, with the government fostering the infrastructure and providing assistance for film and TV production to nurture a local media industry,” the report stated.

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