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

Email

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