OSN+ and Anghami merger brings together binge watching and music streaming
The combined entity will form one of the biggest streaming platforms in the Middle East
ABU DHABI, United Arab Emirates – Binge-watching and music streaming are coming together in a merger of Anghami Inc. and OSN+, the Arab world’s homegrown rivals to Spotify and Netflix.
The combination of OSN+ and Anghami will make it one of the biggest streaming platforms in the Middle East, bringing together movies, television, music and podcasts. The deal is backed by a planned $50 million cash investment in Anghami from OSN. The combined media entity will have some 120 million active users – 2.5 million who are paying subscribers – and $100 million in revenue, according to a joint statement on Tuesday.
“We won’t grow until we climb on top of each other,” Elie Habib, co-founder and CEO of Anghami, told The Circuit. The Lebanese start-up pioneer, who joined OSN’s board of directors a little more than a year ago, will become chief of the newly combined entity.
Habib described the deal as primarily about “achieving scale” in a fiercely competitive media environment dominated by Western players, adding that he hopes the merger will encourage more consolidations among technology companies in the region to take on bigger outsiders.
The deal is expected to close early next year subject to regulatory and antitrust approvals. OSN Group, which is majority owned by Kuwaiti conglomerate KIPCO, will continue to run its linear TV business OSNtv separately, headed by OSN Group CEO Joe Kawkabani.
Kawkabani has made it his focus to bring Western content like HBO and Warner Bros. properties to the OSN streaming platform. Moves to bring And Just Like That – the Sex & the City reboot – Succession and the Barbie movie to MENA markets have been largely successful: OSN+ achieved a 40% year-on-year increase in user engagement.
But rising content costs, the growing adoption of an ad-tier offering and a high amount of churn among customers is creating fierce competition for every single user. The global video streaming market size was valued at $455 billion in 2022 and is expected to grow 25% just this year, according to Fortune Business Insights.
Habib has plans to meet the potential, he said. After the deal is finalized, he said the OSN+ app will be “unrecognizable” to users. He plans to quickly put the streamer on the Anghami technology platform which may improve its content recommendations. The new product will focus more on sound and visual quality with a greater emphasis on 4K and Dolby Atmos content, and to immediately introduce ad-supported streaming, he said.
Anghami was founded in 2012 in Beirut, before moving to Abu Dhabi in 2021. In February last year, it became the first technology company from the Arab world to sell shares on the NASDAQ, which it did through a special purpose acquisition company merger, or SPAC.
Like most SPACs that came out of the pandemic era, its share price has struggled, plunging some 94% since its debut. But pre-market trading indicated investors are positive on the deal, it was trading up 35% early today at $1.58.
“I do believe that at the end of the day, we want to create shareholder value,” Habib said. “Sometimes you have to take a step back to be able to step forward.”