mr. marwan maarouf's presentation at qitcom 2011 | session 3 | day 1
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May, 2011
Digital Content ClusterIncubation Center
2ictQATAR 2
Digital Content Eco System
Defining Digital Content
The Need for a Localized National Digital Content Strategy
Economic Indicators of Digital Content & online Advertizing Revenues
Qatar’s Arabic Digital Content Cluster
ictQATAR Digital Content Incubation Center
3ictQATAR3
Digital content is any content created, used, shared, accessed and preserved in a digital format
Digital Content Definition
Infotainment
Information: News and finance Education Culture and
heritage Religious Health Government Directory
Entertainment: Lifestyle Sports Community Gaming Audiovisual Youngsters Personalization
Commerce
Shopping
In-store applications
Transactions
Micro and macro payments
Government services (transactions)
e-Banking
Communication
Messaging (text and multimedia)
Chat / Instant messaging
Voice and video telephony
Social Media
Social network
User generated content
Blog
P2P
Forum
Search & Applications
Search engine
Productivity applications
– Maps / navigation
– Calendar
– Online storage
– Remote surveillance
4ictQATAR 4
Digital Content Eco System
Defining Digital Content
The Need for a Localized National Digital Content Strategy
Economic Indicators of Digital Content & online Advertizing Revenues
Qatar’s Arabic Digital Content Cluster
ictQATAR Digital Content Incubation Center
5ictQATAR5
Less than 1% of content in the world is in Arabic, while the Arab World is the fastest growing internet user segment
International players are not serving the MENA region with targeted and customized content,
Regional players are still embryonic and not sophisticated
International benchmarks and offline needs analyses suggest that many potential users are not yet connected, because their needs are not currently being fulfilled on the digital front
Gap Analysis by Segment
Main Needs Current PlayersLevel of Compelling
Offerings
Youth Users
Professional
Leisure Male
Female Socialite
Infotainment: Sports, Games, News & Audiovisual
Heavy consumers of UGC, Email/Chat and Social Networks
Business/Finance, News & Productivity Apps
Biggest Digital Spenders
Sports, News, Tech/Gadgets & Autos/Motors
Fashion, Celebrities, Health and Fitness
Heavy Shoppers and Social Media Users
Regional players: low quality & bad customer experience
Social media is covered by int’l players only
Needs served by regional players
Finance/Business players still small
Low quality regional offering (except for News)
Lack of comprehensive digital offering to cover female needs
Opportunity for Digital Content Cluster
Low High
Digital localized needs are not being met by current regional offerings
Less than 1% of world digital content is in Arabic
Source: Booz & Company analysis
6ictQATAR 6
Digital Content Eco System
Defining Digital Content
The Need for a Localized National Digital Content Strategy
Economic Indicators of Digital Content & online Advertizing Revenues
Qatar’s Arabic Digital Content Cluster
ictQATAR Digital Content Incubation Center
7ictQATAR7
1,171
2,350
1,538
2,837
2010
2,753
+20%
1,411
172
2015
6,725
16%
14%
CAGR(2010 - 2015)
1) Commerce values include the cost of goods soldSource: Parc, Zenith Optimedia, Standard Chartered Global Focus, Madar Research, Booz & Company analysis
1,477
990
1,360
Online
134
Advertising Sales
Mobile
Sales of Goods
and Services
2,467
2,837
2,703
Content Sales
1,422
61
MENA Digital Content Revenues Split(2015) (In US$ Million)
Mobile
Online
55%
Digital content revenues are expected to more than double in the next few years, driven by content sales and advertising
Broadband Connections
(in Mn)13 188
Mobile Connections
(in Mn)237 364
Commerce1
Mobile
Online
57%
7%
Total MENA Digital Content Market Projections
(2010 - 2015) (In US$ Million)
8ictQATAR8
MENA Online Advertising Revenues1
(2009 - 2014) (In $ Million)
953
614
395
255
164106
2009
2014
+55%
2012
2011
2013
2010
1.6% 2.2% 3% 4.1% 5.7% 7.8%
% of Total Ad
Market
Online Advertising Growth Drivers
Spend per internet user is still far behind the world average, leaving significant room for growth
Continuing growth in internet penetration (especially broadband penetration) is expected to boost the share of online advertising
Development of creative agencies for Online advertising
Digital advertising and marketing know-how is increasing in the region
Increased measurability of ad exposure, and efficient use of audience targeting tools
Growth in Arabic and regional content
Economic downturn resulting in greater focus on online as a more efficient and targeted media
1) Prior to the recent global economic developments, online advertising was expected to reach 6% of the total ad market by 2014Source: Madar, Zenith Optimedia, Parc, Booz & Company analysis
Online advertising in the MENA region is lagging behind developed markets, but is expected to reach over $950 million by 2014…
9ictQATAR9
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
Year 1
Year 2
Year 3
Year 7
Year 6
Year 5
Year 4
France
Netherlands
MENA
Poland
Average
Internet Advertising % of Total Advertising Market (2007)
US Europe MENA
11.9% 11.8% 0.67%
Average Advertising Spend per Internet User (2007)
GCC/Levant World US
$1.97 $27.27 $58.76
Comments
For selected international countries (Poland, Netherlands, France, Australia, China), we plotted the online vs. total advertising spend starting the year when they had a ratio similar to the current MENA region
A comparison of the average growth of the selected countries to the projected growth in the MENA region reveals that the forecasts are in line with historic growth in more developed markets
Online Advertising as % of Total Advertising
(Selected Countries) (In %)
Source: Madar, Group M, Parc, Booz & Company analysis
growth pattern of online advertizing as more developed markets
10ictQATAR 10
Digital Content Eco System
Defining Digital Content
The Need for a Localized National Digital Content Strategy
Economic Indicators of Digital Content & online Advertizing Revenues
Qatar’s Arabic Digital Content Cluster
ictQATAR Digital Content Incubation Center
11ictQATAR11
1234
Infrastructure
Enablers
Digital ContentCluster
Provide bandwidth and connectivity services at subsidized prices
Provide VC funding / grants and incubation services to support innovation
in identified digital content focal plays
Enable digitization and rights management support for tenants and external
stakeholders
Offer one-stop-shop for facilitation of government procedures (business set up services), property management services,
admin and IT support
Coordinate licensing and regulation of companies within cluster and linked
to digital content production and distribution
Source: Booz & Company analysis
The digital content cluster would require the full range of support services while leveraging Qatar’s enabling environment
Digital Content Cluster - Required Services and Enablers
Laws & Regulation
12ictQATAR 12
Digital Content Incubation Center
Defining Digital Content
The Need for a Localized National Digital Content Strategy
Economic Indicators of Digital Content & online Advertizing Revenues
Qatar’s Arabic Digital Content Cluster
ictQATAR Digital Content Incubation
13ictQATAR13
GrowthMarket Development
Digital Cluster Incubation Center tenants should cover the concept to commercialization phases of the innovation value chain
Idea Prototype
Conceptualization Commercialization
Product concept
Testing
Copyrights / patent clearance
Prototype design
Prototype development and testing
Initial product development
Proof of concept
Go-to-market strategy
Business development
Marketing and promotion
Product portfolio growth
Geographic expansion
Ob
ject
ive
Des
crip
tio
n
Foster innovation and creativity in developing local, Arabic content
Ensure content production that can be distributed over multiple platforms (e.g. online and mobile channels)
Provide a supportive environment for ICT entrepreneurs and SMEs during their commercialization phase with an aim to create a digital content sustainable ecosystem, supporting Qatar’s overall knowledge economy
Source: Booz & Company analysis
Digital Content Cluster - Innovation Value Chain
Product Develop.
14ictQATAR14
Plan to launch Incubator service offering, four incubator functions are identified
Incubator Service Offering
BasicServices
3 YEARS
Center of ExcellenceServices
Value-Added Services
Strategy and Business Development
Access to Funding
Market Intelligence
Marketing and Promotion
Pre-sales and Matching Services
Talent Recruiting
Business and IP Consulting
Innovation Platforms
Networking
Telecom / IT Services
Office Space and Conference Facilities
Accounting & Legal Services
Government “One-Stop-Shop”
Tenant Facilitation
Innovation Mgt
Market Development
Strategy & Business Development
Incubator Functions
March 2011
Dec 2011
Dec 2011
March 2012
ExpectedLaunch Date
15ictQATAR
Funding remains one of the biggest challenges Access to different types of funding should be made available
Not preferred option as start-ups/entrepreneurs lack credibility/tract record to secure favorable loan conditions, with high-risk for ictQATAR as guarantor; could be employed for late-stage, growing tenants
Funding Key Considerations
Develop network of local and regional business angel investors to fund start-up and early stage companies (typically 100-200k USD)
Attract equity funding from local, regional and international Venture Capital firms, for early stage and growth companies requiring larger capital infusions (typically 1-5m USD)
Angel Investments
Venture Capital
Debt
Grants
Enterprise Qatar
(EQ)
Provide support to early start-ups and SMEs through dedicated government and industry funds, Enterprise Qatar (EQ)
Explore opportunities to leverage National Research Fund to provide R&D grants for Digital Content research projects for tenants in their conceptualization phase
16ictQATAR
Government entities as key Stake Holders for the Strategic Initiatives to build an Innovation & Entrepreneurship Environment
Support ictQATAR in obtaining funding for ICT companies as part of the Enterprise Qatar Funding Scheme (EQ) to grow the SME Segment
Additional Funding from a newly established.
Strategic Initiatives Actions Required
Approve Anchor Foreign Tenants in the Incubation Center to have 100% ownership
Direct Foreign Investor applications relevant to Digital content to ictQATAR for screening and possible partnership
Enactment of e-Commerce Law launch Intellectual Property Laws covering Digital space (IP) Launch and Implement a Digital Rights Management Framework (DRM)
Capital
Requirements
Consumer &
Digital Rights Laws
Funding
One Stop Shop for
Gov’T Procedures
Foreign
Investments
Setup a Single Window for the Incubation Center to obtain quick registration approvals
Automate & Reduce the number of steps and days it takes to setup a business in ICT sector (Business Support Services)
Reduce Capital requirements for ICT companies and especially those starting in the incubation center
17ictQATAR
FahrasQatar was launched and Qatari Young Entrepreneurs Selected as Pilot & Soft Launch of Incubation Center
Phase I (March 2010)• 35 Applications received• 5 disqualified
30 Shortlisted 5Disqualified
35Applications
30Shortlisted
30
192nd Coaching
Session
221st Coaching
session
4Teams merged
into 2
28
17Submitted BCs
11Withdrew
10Shortlisted
10
Phase II (April 010)• 2 Coaching sessions• 4 days of coaching• 3 Coaches
Phase III (May 2010)• 5 Scorers• Average 3 scores per BC• 10 Shortlisted BCs• 10 presented• 3 Selected• 1 Awarded and Signed Agreement for Incubation
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