Warner Bros. Discovery is taking a minority stake in Dubai-based OSN Streaming Ltd. in a bid to capture a slice of the fast-growing Middle Eastern entertainment market.
Warner Bros. will pay $57 million for about a third of OSN Streaming, Joe Kawkabani, chief executive officer of parent OSN Group, said in an interview.
The transaction will be done in stages and is still subject to regulatory approvals, according to a joint statement. OSN provides global and local TV series and films, and the unit Warner Bros. is investing in offers streaming services.
The deal will see both firms invest in locally produced content as they seek to court regional viewers, as well as explore synergies, according to Kawkabani.
“Whether it’s a production of content, or expanding our content library, or creating better content, this is really the angle of the deal,” Kawkabani said.
The investment cements a series of partnerships between both firms. OSN inked a multi-year licensing agreement with Warner Bros.-owned HBO in 2022 to exclusively broadcast and stream content from the American pay TV network. It also secured the exclusive rights to Warner Bros.’ film catalogue last year.
“I think now we can look into ways where we can expand that offering,” Kawkabani said, adding that the new partnership would probably facilitate all of these discussions, but they would be done on separate commercial terms.
Entertainment and technology companies are being drawn to the Middle East with the allure of rising disposable incomes and a growing population of young and tech-savvy consumers.
Regional firms such as OSN, Abu Dhabi-based Starzplay and Saudi broadcaster MBC Group are competing with larger international rivals such as Netflix Inc. and Amazon.com Inc. for local audiences.
OSN Streaming has a majority stake in Anghami Inc., a Middle Eastern challenger to Spotify Technology SA and Deezer SA.
For Warner Bros., this is the latest investment into a home-grown streaming service in the Middle East, after it fully acquired Turkey’s BluTV in 2023 following an initial 35% investment in 2021.
The rationale for local partnerships is to avoid more fragmentation in a “very crowded stream marketplace,” said Jamie Cooke, executive vice president and managing director for Warner Bros. Discovery’s Central Europe, Turkey and Middle East business.
For Warner Bros., there is “probably not” going to be more M&A in the Middle East after the OSN Streaming investment, according to Cooke.
“This is for me the final piece of the puzzle for our whole ecosystem in the region, we just need to make them all work together,” said Cooke. “But never say never.”
Content Courtesy – MSN
