A recent report by Strategy& Middle East and Google News reveals the evolving landscape of news consumption in the MENA region. According to the report, a significant 68 percent of consumers in the Middle East and North Africa (MENA) region now rely on social media as their primary source of news. This reflects a notable shift in traditional news consumption habits. Furthermore, 90 percent of respondents prefer accessing news through their mobile phones.
The report, entitled ‘Building a Vibrant News Industry in the Middle East and North Africa,’ analyzed three of the largest news markets in the MENA region: Egypt, Saudi Arabia, and the UAE. Together, the three markets account for 80 percent of advertising spending in the region’s entertainment and media industry.
Financial challenges facing traditional news outlets
While the rise of digital channels presents new opportunities for news dissemination, it also poses significant financial challenges for traditional news organizations. The report highlights a decline in newspaper and magazine revenues in the MENA region since 2018. The forecasted compound annual growth rate (CAGR) for their revenues is expected to reach -4 percent by 2027. Print advertising revenues are also expected to decline sharply by 11.3 percent by 2027. This further exacerbates the financial pressure on traditional media outlets.
“The rapid changes in the news media industry in the MENA region have created real avenues for growth. To successfully capitalize on these opportunities, news organizations will need to digitally transform, adopt sustainable business models, and pursue operational agility, innovation, and productivity,” said Karim Sarkis, Partner at Strategy&, part of the PwC network, and the leader of the media and entertainment sector in the Middle East.
Strategies for growth
To address these challenges, MENA news organizations need to embrace digital transformation and revamp their business models. The report suggests focusing on new content types, formats, and digital engagement strategies to better cater to evolving consumer preferences. Notably, 45 percent of respondents expressed a willingness to pay for high-quality reporting. This indicates a potential revenue stream for news organizations, particularly in popular categories such as entertainment, health, and sports.
The report also states that advertising revenues in the MENA region are expected to grow at a CAGR of 6 percent between 2022 and 2027 compared with 4.5 percent globally.
Moreover, digital ad spending in MENA has significant room for growth. It accounted for 79 percent of the $7.6 billion total ad spend in 2022. In addition, digital ad spending is also expected to exceed global growth by 2027, with a 6.9 percent rise compared to 6.5 percent globally.
Generational divide
The report indicates that the engagement of news outlets consumers must be tailored to specific demographics. Although 61 percent of MENA respondents have increased their news consumption in the past three years, the frequency of news consumption varies widely by age.
The report reveals that those between 18 and 24 access news less frequently than those older than 45. This constitutes a large and mostly untapped audience since the region has one of the youngest populations globally. If MENA region news outlets want to capitalize on that untapped demographic, new strategies to modernize and strengthen the ecosystem are crucial.
The report highlights the need to achieve three objectives:
- Digital transformation
- an updated enabling environment
- a reliable and trustworthy news ecosystem
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Strengthening the news ecosystem
Karim Daoud, Partner with Strategy& Middle East, part of the PwC network, stated: “A thriving news media industry relies on a supportive, updated enabling environment involving all stakeholders in its modernization efforts.” This includes governments, regulators, global tech platforms, advertisers, academia, and news organizations. The report also emphasizes the need for talent development programs and targeted financial support. It also highlights the importance of media literacy initiatives and an updated regulatory framework to support the news ecosystem.
Furthermore, investments in technological infrastructure, including cloud solutions, artificial intelligence (AI), and machine learning tools, can enhance operational efficiencies and improve the quality of reporting.
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