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YouTube forever? SVOD should be next for Australia’s leading Islamic media companies

| 06 April, 2017 | General
Yasir Malik, DinarStandard and Emmy Abdul Alim
YouTube forever? SVOD should be next for Australia’s leading Islamic media companies

Australia’s Muslims spend around $1.8 billion in media and recreation, which is a small proportion of the country’s $36.9 billion media and entertainment industry. But the segment is attractive for local Muslim entrepreneurs and businesses, especially considering its potential to reach the global English-language Islamic-themed media market. Its leading companies are currently growing on YouTube and Facebook. Their next step up is subscription-based video-on-demand. 

Muslims make up around 2.2 percent of Australia’s population, equivalent to about half a million people. As a group, their $1.8 billion expenditure on media and recreation in 2015 is projected to reach $2.47 billion in 2021. Muslim demand for Islamic-themed media and content is growing in Australia, as recognized by the emergence of several media companies. These include Australasian Muslim Times, IslamicMedia Entertainment - United Muslims of Australia, and MuslimVillage Incorporated, and OnePath Network.

Australasian Muslim Times is a print and online multilingual community newspaper that delivers Islamic-themed content, originally founded in 1991 and relaunched in 2014. The company delivers an online subscription for a monthly newspaper and periodic email newsletter. It was a winner of the New South Wales' government's 2016 Premier’s Multicultural Media awards. Since relaunching in 2014, the company has over 2,000 Facebook followers.

IslamicMedia Entertainment is an online platform that offers audio and video lectures of Islamic-themed content operated under the umbrella organization, United Muslims of Australia, founded in 2001. The United Muslims of Australia is a community group dedicated to offering educational and social forums for the Australian Muslim community. IslamicMedia Entertainment opened a YouTube channel in 2006 and today has over 27,000 subscribers.

MuslimVillage.com is an online publishing and non-profit organization founded in 2001. It provides Islamic-themed content including lifestyle and opinion pieces, news, and videos. It currently receives over 7.5 million online visitors annually, has generated 1.3 million Facebook followers and is offered in multiple languages. The company received the Australian Muslim Achievement Award for Media Outlet of the Year five times since 2006 and was awarded the Hitwise Top Ten Lifestyle Religion award three times since 2008.

OnePath Network is the largest Australian Islamic-themed media production organization, founded in 2014. The company raised $1 million in seed funding in 2014 and delivers content through social media, desktop and mobile applications. It has 16,280 YouTube subscribers, 229,270 Facebook followers and 50,000 android and iOS application installs. Its videos have been viewed more than 110 million times. 

CHALLENGES

Islamophobia

A significant challenge facing the Muslim population in Australia is Islamophobia and the rising hostility towards Muslims in mainstream media.

In 2015, a survey by the Western Sydney and Charles Sturt universities and the Islamic Sciences and Research Academy found that 57 percent of the Sydney Muslim respondents had experienced racism in Australia. Two years later, the public sentiment is still a challenge for Muslims as 44 percent of respondents to a Guardian newspaper survey in February said Australia should take similar measures to U.S. President Donald Trump’s executive order to restrict travel and immigration from several Muslim-majority countries.

Reaching financial viability

A core challenge faced by Islamic-themed media companies, whether in Australia or any other country, includes raising funds to sustain operations. Malaz Majanni, CEO of OnePath Network, addressed the difficulty in raising funds: “The hardest part of our story was achieving financial sustainability. We are currently operating on community donations, and advertising revenue.” 

To help achieve financial viability, One Path has generated revenues through offering advertising slots to small and medium-sized enterprises.

Seeking out new genres that appeal to the next generation

Emerging companies need to address the needs of millennial and Gen Z viewers. There is especially the need to move away from traditional formats of preaching and lecture-style sermons as second or third generation Muslims in Western countries have more sophisticated media tastes and habits.

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SVOD OPPORTUNITY

Of the four leading Islamic-themed media companies, OnePath Network and IslamicMedia Entertainment have the potential to scale to reach the bigger global English-language Islamic media audience. 

Each regularly produces original content, with videos driving viewership. This is important if the two companies are to continue to reach the global millennial and Gen Z Muslims where they are online, and especially on their mobiles. Each company has sizeable followings on global platforms YouTube and Facebook that they use to distribute their content and OnePath Network also has the advantage of reaching mobile users with its app. Both companies are where they should be right now: YouTube has over a billion users and video consumption is growing on Facebook.  

A next step up for them lies in selling original content to subscription video-on-demand (SVOD) platforms. The next bigger opportunity would be scaling up to become SVOD platforms themselves.

SVOD is relatively new in Australia but it has already left a dent in the media sector, which is a very positive signal of consumer appetite. In the first quarter of 2015 three services were launched: Netflix, Presto TV, and Stan. A year and a half later, more Australians had SVOD than pay TV – 28 percent versus 27 percent, and Netflix clearly dominates. Globally, Netflix ended 2016 with 93.8 million members and $8.3 billion in revenues. 

If OnePath Network and IslamicMedia Entertainment want to look to the dedicated Islamic media segment, then Alchemiya is its biggest SVOD success story. Launched in 2015, it was eventually picked up by Amazon Prime’s Amazon Channels in January 2017 alongside more than 70 services including HBO, Comedy Central, and Showtime.

Other notable Islamic media SVODs are British Muslim TV and Malaysia’s Al Hijrah channel.

However, OnePath Network told Salaam Gateway earlier this year that while it is aiming for a higher volume of production as well as broadening into other verticals such as comedy, satire, young adult, and programs for children, it wants to "become the world's best advertising medium to reach a Muslim audience," which is typically the profile of an open ad-supported platform. 

In the most mature paid and free video-on-demand market, the United States, the rise of multi-channel networks have moved free VOD platforms up the scale. A recent example is Fullscreen, which after only five years launched its subscription service around this time last year. A notable move into paid services is YouTube Red that launched in October 2015. 

CONSOLIDATION

Another opportunity for Australia’s Islamic-themed media companies is to consider partnerships or mergers as ways to expand and consolidate resources. Small or medium-sized content companies are frequent acquisition targets for bigger firms but this is rare in the Islamic-themed segment.

A notable movement was in the United States in 2012 when Altmuslim joined the Patheos platform. It was a win-win for both as Patheos could add Islam to its coverage of faiths, and Altmuslim could leverage Patheos’ much bigger readership for more exposure.  

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