More deals likely to follow OSN+ and Anghami merger

Imago/Future Image via Reuters Connect

• $50m streaming platform merger
• ‘Rapid growth’ in industry
• More mergers likely

The merger last week between OSN+ and Anghami will lead to more consolidation in the region’s streaming sector, industry experts have said.

Kuwait’s Kipco-Panther Media Group, which operates as OSN, will combine its streaming service OSN+ with Anghami’s music and entertainment business to create one of the Middle East’s largest streaming platforms.

The Europe, Middle East and Africa region, as of September boasted a total of 2,184 streaming platforms with a content library comprising 635,000 movies and series across 137 countries and territories, as per data from analyst BB Media.

• OSN+ and Anghami merge in $50m streaming service deal
• The Gulf has a rich musical heritage – it needs an audience
• Saudi media company MBC Group to float 10% in IPO 

“Given the rapid growth of both the industry and the region, it’s highly likely that we’ll see more mergers and acquisitions,” said Elia Mssawir, CEO of UAE-based music label GXR Records.

Anghami CEO Elie Habib even hinted at more merger deals in a social media post.

Welcoming the congratulations of rival streaming service Starzplay, he said: “We would love to see more consolidation to create giants from our region.”

Homegrown video-on-demand service Starzplay was acquired by e& subsidiary E-vision and Abu Dhabi holding company ADQ last year. It has 2.9 million subscribers across 19 countries in the Mena region and Pakistan.

OSN is set to invest $50 million in Nasdaq-listed music streaming platform Anghami as part of the merger deal.

The company has undergone an extensive period of restructuring over the last five years, as it caught up on the transformation to digital. There have been several changes at the helm of OSN, now fronted by CEO Joe Kawkabani.

OSN+ is available in 22 territories across the Mena region.

In March, the company extended its deal with Warner Bros Discovery, giving it continued exclusive rights to HBO content in the region. Its content stable also includes Paramount+, as well as Sky Studios and Peacock Originals produced by NBC Universal. OSN also has deals with Arabic and Turkish studios.

Kawkabani said the new offering will “change the face of the regional streaming landscape”.

A survey of more than 1,000 UAE residents by advertising technology company The Trade Desk earlier this year found that 65 percent of UAE residents watch streaming content daily. 

In April 2021 Abu Dhabi-based Anghami became the first Middle East tech company to list on the New York stock exchange after merging with SPAC Vistas Media Acquisition Company. The deal valued the music streaming service at $220 million.

The music streaming market in the Middle East and Africa is expected to grow from $1.5 billion in 2019 to $3.2 billion by 2027, a compound annual growth rate of 9.5 percent, according to Research and Markets.

“In the past, Amazon’s acquisition of [e-commerce platform] Souq.com happened as a result of Amazon’s rapid growth, where they didn’t feel the need to compete with local entities,” said Mssawir. “On the contrary, when Spotify entered the market, there were discussions about acquiring Anghami, but Spotify ultimately chose to compete vigorously after establishing its local presence.

“The interesting aspect of the current merger is that it originated within the region, preserving and enriching the local culture.”

The merger brings together 120 million registered users and more than 2.5 million paying subscribers, and more than $100 million in revenue at closing.

In August, SRMG Ventures, the venture capital arm of the Saudi media company behind brands such as Asharq Business and Arab News, invested $5 million in Anghami.

Meanwhile, Saudi Arabian media company MBC Group last week announced plans to float 10 percent of its share capital in an initial public offering on the Saudi Exchange.

Chief executive Sam Barnett told Reuters the proceeds of the listing would go towards repayment of outstanding debt, enhancing liquidity and investment in the company’s online streaming platform Shahid, as well as new initiatives.