Arab Information and Communication Technology Organization

Open Forum: Development of the Arabic Content Facing the Future Internet
Vilnius Lithuania, 15 September 2010

Overview

The communication and information sector in the MENA region have experienced
significant growth over the past few years; mobile population penetration is
exceeding 100% in many countries (e.g. QATAR, UAE, KSA, Kuwait, Bahrain,
Oman) and internet household penetration is exceeding 30% in some countries (e.g.
Qatar, Bahrain, UAE). Despite the fact that more end-users are now connected and
levels of e-inclusion have been enhanced, the digital content industry is still in its
infancy. Currently, only 1% of all online content is in Arabic and apart from a few
cases, most MENA region countries score quite low in NRI (Network Readiness
Index) index of accessibility of digital content.

The MENA region has all the characteristics needed to enable a burgeoning digital
content market; macroeconomic, demographic and ICT policy enablers are all there.
Fast growing economies, young and vibrant population, mature mobile markets and
exponentially rising broadband markets are key strategic attributes that regional
markets should capitalize on. Regional ICT industry stakeholders should coordinate
efforts to unlock digital market potential and serve latent demand.

However, a set of key challenges hinder timely and effective development of the
digital content market. Factors such as shortage of skills and talent, inadequate
financing, outdated regulatory frameworks and lack of innovative business
models/revenue streams, restrict opportunities for start-ups/ entrepreneurs, while
impeding development of comprehensive digital media service offerings.

In this regard, several imperatives need to be implemented to foster the

development of digital media in the region. These imperatives include enhancing
access and use, introducing and supporting required incentives models, developing
human capital, modernizing policies and regulations and ensuring development of
adequate infrastructure.

ictQATAR, similarly to every national policy maker, is expected to play an

instrumental role in driving change and be the catalyst for enabling effective
development of the regional digital content industry. As part of its ICT2015 strategy,
ictQATAR has set out clear priorities and initiatives to drive the development of a
sustainable and self-reinforcing ecosystem; the objective is to promote the
development of rich and open Arabic digital content that will be disseminated
regionally and globally.

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A. Regional Context

1. The MENA region has all fundamental macroeconomic, demographic and ICT
policy enablers that could drive growth in the digital content market:
– Arab nations population count around 358 million; extremely young and
vibrant population as over 50% of population is under the age of 24
– Total nominal GDP reached around US 1.6 trillion, representing 2.8% of
global GDP
– MENA region mobile and broadband penetration expected to reach 112%
and 41% respectively by 2014

2. Consumers behavior patterns are shifting, as users prefer digital over traditional
media:
– Regional digital media sector net advertisement spend is expected to grow
at 33% CAGR over the coming 5 years, as compared to 5-10% CAGR in
traditional media
– In a survey conducted in the region, it is found that in the GCC,
percentage of traditional media users significantly decreased between 2007
and 2008, while mobile and smartphone users considerably increased over
the same period

3. Emerging new digital media segments demonstrate differentiated ICT needs and
preferences
– Four digital media users segments have been identified: youth (34%),
professionals (4%), female socialites (32%) and leisure males (30%)
– Segments ICT needs and preferences span across digital media ecosystem
categories: infotainment, social media, commerce, communication, search
and applications
– In summary, digital segments’ underlying preferences are:
o Youth is more interested in recreation and entertainment (games),
blogging and education/ knowledge
o Professionals show preferences in information / work,
communication and knowledge
o Female socialites are more interested in amusement, lifestyle /
fashion and communication content
o Leisure males preferences are focused around amusement, news
and sports and personalization

4. Regional digital content market potential has attracted international players

(supply dynamics):
– International internet players, such as Google, Yahoo, Facebook already
dominate the traffic within every country in the region
– Yahoo recently clinched deal with Maktoob to enhance its online portal
offering (e.g. business news and finance headlines, games, sports, online
community)

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 – Google and the Egyptian Ministry of Communications and Information
Technology signed an agreement focusing on growing digital media start-
ups, incubation venture capital, angel funding of the ICT sector and
training students in online advertising

5. There is currently limited availability of Arabic content, despite the reported

relative high demand for online Arabic content :
– Currently, only 1% of all content online is in Arabic
– In a recent regional study, 62% respondents quoted Arabic as the
preferred language for browsing the Internet
– Given reported shifts in consumers’ behavior patterns, there is a risk that
end-users will not become aware of national properties currently offline
(e.g. university and museum archives)

B. Key Challenges

A set of challenges hinder the effective and timely development of the digital media
market in the region:

1. Shortage of skills and talent in digital media negatively impacts pace of

development:
– Media companies operating in the region need a consistent supply of local
talent
– There is a shortage of creative and innovative talent in the region
– Most regional media companies lack good quality local Arabic content

2. Inadequate financing limits opportunities for start-ups and entrepreneurs to

innovate in digital media:
– Lack of financial support to incubate and grow new “innovative” concepts
and ideas
– Lack of growth capital for small and medium enterprises for diversifying
or consolidating their position in new media market
– When examining the top investment funds in the region, it becomes clear
that focus is mainly on real estate, as total funds reached USD 2.3 billion,
compared to USD 1.6 billion for technology, communications, and media

3. Existing regulatory frameworks are considered outdated, as they do not

effectively address intellectual property rights and data protection issues, while
in most cases e-commerce laws are still to be implemented:
– Most countries in the region still do not provide an adequate regulatory
environment to attract international and regional players (e.g. lack of
transparency, censorship, intellectual property rights, SPAM laws, e-
commerce regulations etc.)
– Current regulatory environment does not specifically promote digital
media production nor influences the quality of content being developed

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4. Underdeveloped and inefficient advertising market directly impacts potential
revenue streams for digital media market:
– Undisciplined and asymmetrical advertising market as well as predatory
and non-transparent commercial practices
– Absence of common and reliable media consumption rating methodology,
leaving advertisers without proper tools to make efficient media buying
decisions
– Outsourcing of media representation
– Online net advertisement spend per capita is USD 2 in the MENA region,
compared to USD 96 in UK, USD 44 in US and USD 22 in France

C. Required Imperatives

A variety of different imperatives are necessary to foster the development of a digital

media ecosystem in the region. Imperatives could be focused on:
– Enhancing digital access and use, as well as raising awareness among end-
users
– Providing required incentives model, in terms of funding mechanisms,
rewards and recognitions
– Developing human capital and bridging skills and capabilities shortage
gap
– Modernizing policies and regulations, protecting end-users digital
interests and attracting investment
– Ensuring development of adequate infrastructure (e.g. high-capacity
broadband access), as well as digital content standards interoperability

1. Access and Use:

– Define rules and guidelines for granting permission for accessing online
content
– Develop innovative tools that would support Arabic and local digital content
proliferation (e.g., Arabic character recognition, web search engine, automatic
translation engine, etc.)
– Run campaigns to educate people on the value of using digital online content

2. Incentives Models:
– Subsidize digitization process by funding specialized companies/experts to
deliver high-quality digitization in a timely manner
– Establish venture capital funds to ensure that the right ideas and talent have
access to funding and can be translated to viable commercial opportunities
– Attract international venture capital investments
– Encourage exploration of new business models in the digital content industry
and drive implementation of sustainable models through engaging industry
stakeholders
– Establish prestigious award institution(s) to develop regular well-publicized
competitions related to digital content

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3. Human Capital:
– Organize and promote digital media trainings targeting both students and
professionals in ICT or media industry
– A training institute could be set up to deliver dedicated training courses
across several topics such as digital preservation, digital content development
and marketing, etc.
– Cooperate with educational stakeholders to integrate digital media courses in
university curricula; courses should cover accessing, using and creating
content
– Cooperate with educational stakeholders to instill a digital participation and
blogging culture among all students
– Promote international exchange programs with innovative regional and
international digital media educational institutions and centers, mainly
targeted for ICT professionals and creative youth
– Encourage and facilitate internship opportunities for students with leading
digital media companies

4. Policies and Regulations:

– Protect intellectual property rights through piracy regulation
– Win users trust in digital content and provide them with more control over
the way their personal data is handled through data protection and privacy
regulation
– Harmonize rules of online business and boost user confidence by finalizing e-
commerce regulation in line with international trends

5. Infrastructure and Standards:

– Support national broadband network initiative to promote high speed,
ubiquitous, affordable broadband, addressing gaps in fixed or wireless
coverage
– Provide free wireless Internet access in convenient locations (e.g. libraries,
schools, community centers)
– Improve web hosting through subsidies and collaboration with telecom
operators
– Encourage adoption of open standards for digital content production and the
development of standard-based tool

D. Role of ictQATAR

Qatar is well positioned to lead development of localized digital content, given its
common and unique strategic attributes:
– Freedom of content: no content filtering, empowering citizens and
businesses to self-regulate access to information and satisfy curiosity for
knowledge
– Strong media track record: Al-Jazeera success story

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 – Understanding of local, Arabic and Islamic requirements: focus on
maintaining cultural roots supported by strong understanding of Arabic
and Islamic requirements (e.g. Museum of Islamic Arts)
– Availability of financial resources: strong funding potential to support the
development of a knowledge-based economy
– World-class ICT infrastructure national broadband network and
international connectivity enabling creation and dissemination of digital
content in the region and globally

ictQATAR, as every national policy maker, is expected to play an instrumental role

in driving change and be the catalyst for enabling effective development of regional
digital content industry.

ictQATAR, as part of its ICT2015 strategy, has clearly set out priorities and initiatives
in developing a sustainable and self-reinforcing ecosystem that promotes
development of rich, open Arabic digital content, disseminated regionally and
globally.

Key initiatives include:

1. Digital Content Incubation and Digitization:

– Develop digital content incubator, aiming to unlock digital content
potential in Qatar and the region, focusing on innovative new media
services and applications for the Arab world
– Encourage conversion of content (textual, image, audio format) that is in
print or analogue format to digital format, publish it online and preserve
(focus on university research, national heritage, laws/ decrees)
– Support enactment of digitization plan across government entities and
private sector

2. Access and Use:

– Market and promote content available online, through targeted awareness
campaigns and trainings

3. Incentives Models:
– Support establishment of content digitization funding mechanism
(government subsidies, grants, VC funds)
– Facilitate development of new business models for digital content industry
(e.g. ad-funded, “digitize-on-demand”) and establish reward and
recognition mechanisms

4. Human Capital:
– Support incorporating digital media courses in university curricula and
encourage internships and international exchange opportunities

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 5. Policies and Regulations:
– Establish digital content regulatory framework enabling open content
access (intellectual property rights, SPAM regulation, data protection and
privacy, e-commerce regulation)

6. Infrastructure and Standards:

– Ensure an open, affordable and ubiquitous infrastructure access to digital
content
– Support development of conducive standards for content digitization
6.54
6.41
E. Conclusion 6.33
6.32
6.32
The underdevelopment of 6.28digital content in the region calls for immediate action by
all relevant stakeholders. 6.21 Coordinated efforts are required to ensure that key
6.16
enablers are in place to6.11foster the creation of a sustainable digital media ecosystem.
ictQATAR is committed 6.06to play an active role in nurturing this ecosystem, as clearly
articulated in its ICT2015 strategy that emphasized the need for Arabic digital
6.01
5.85
content incubation and
5.63
national content digitization.
5.57
5.20 *********
5.15
4.79
4.76
4.41

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