David Butorac

Tell us a bit about yourself and how you came to be in the Middle East.

I’m a humble cameraman who started his career in television as a camera operator and at some point, they gave me a desk to drive and I ended up on the corporate side of things. This is the only industry I’ve ever worked in and I’ve worked my way up from the shop floor so I’ve had the opportunity to be a part of the operations side of things.

At the same time, I’ve also had the privilege of being a part of some large-scale operations particularly as television modernised. For instance, I was head of operations at BSkyB at the time when we launched the digital platform, which actually revolutionised TV throughout the world. Likewise, I’ve had great opportunities with Astro in Malaysia and WIN Corporation in Australia.

I have been in this industry at the most amazing period in the industry’s lifecycle. And that’s one of the most exciting things about coming here now — to lead OSN through its next phase. This region and this company is geared to do in terms of multi-channel subscription television what has happened in every other major region of the world. If you look at the Annual Media Survey from PwC, their prediction is also that the Middle East and North Africa (MENA) region is going to be the fastest growing region in terms of entertainment spend which includes both consumer spend and advertising as well as broadband penetration.

 Tell us about your days as a cameraman. Have you covered any important moments in history?

Yes, I was in China covering the aftermath of Tiananmen Square; I covered the aftermath of the Berlin wall coming down and the elections that saw the unification of Germany. I also had the opportunity to cover the war in Yugoslavia for Sky News and the first Gulf War from both Saudi Arabia and Kuwait. I also covered live the funeral of Diana, princess of Wales.

 You were here during the Gulf War?

Yes; I covered the first Gulf War for Sky News from Saudi Arabia and Kuwait. My first day in Kuwait City was the day after its liberation. In fact, in my office in Malaysia, I used to have photographs that I had taken from the War on my wall. A journalist once asked me why I had these photos on my wall and I said they were there to remind me of the times when I had a real job.

 I hear you turned Astro and WIN Corporation around from loss-making operations to profit-making ones?

I don’t think I can take credit on my own for doing anything. WIN Corp was already making profits when I joined it but it was the only broadcast company that improved its margins during the crash of 2009.

Astro Malaysia did become significantly profitable. But no one person can do that to a company. We had a fantastic team as we do here. So I have been privileged to work for some companies, where we have been able to make a material difference to the financial performance of the business.

What was the secret to making these corporations more successful?

The best example to use is Malaysia as it is most akin in terms of the industry to this region. Malaysia, like this region, is a multi-ethnic and multi-lingual market and what we had to do to improve the business was make our programme offering relevant to all sectors of the community, and also, send that message out not just to our customers but also to those who were not our customers. Ensuring we had the right content for all sectors of the community and not just catering to one sector was key.

We also changed our marketing strategy. We stopped selling set-top boxes (STBs) and started marketing the services that the STB delivered instead. I will never forget standing in front of around 250 sales guys we had throughout Malaysia. Their job  was to sell STBs. I told them I had worked out how we need to move forward and the first step in that direction was to stop selling STBs. They thought this new CEO who had just come in was crazy. But selling the services instead — the channels, the content, the entertainment information and the education — helped us eventually to significantly improve the business.

 Will there be any strategic changes at OSN?

It’s too early to say. Marc-Antoine and his team have done all the hard work of bolting the two businesses together and for me, I have no legacy from either of the platforms. I am the CEO of OSN and so we have a clear focus of where we are going. I don’t see any great revolution in terms of strategy and structure. Certainly, I see evolution. What you will see in the weeks ahead as I settle into the role is that the business will continue to grow and evolve. Today, we are just over a 1000 employees and hopefully, we will grow further. When I joined Sky TV in the UK, we had 400 employees. When I left, we had 11,000 employees.

 That’s quite a positive comment at a time when we were expecting to hear about more job cuts?

The reality is that we’re running a business. Our shareholders have invested a lot of money to get where we are today. The content providers and technology providers have all been paid a lot of money over the last few years by OSN. The people who haven’t had a great return so far are our shareholders and they deserve that return. We need to run this business as a modern professional business and that means sometimes taking hard decisions and I don’t shy away from any of that. Having said that, the best way to grow our business is to invest in our people. I have only been here a couple of weeks but I can see that we have a dedicated and confident team. What I intend to do as I have done in every other business I have worked in is to invest in those people so we can get the best out of them and grow the business.

And the reason I do this is because I was just a cameraman when I started with News Corp. And when I left there, it was to run a multi-channel business and the reason I was able to do that was because I worked for a company that was prepared to invest in its employees, and that is my intention with this company. To recognise the quality of what we have got, to work with our fantastic team within and to grow the business.

 How many people does OSN have right now?

Our total staff is just over a thousand and that’s after the consolidation.

 Will the departure of your CTO Mike Whittaker put OSN at a disadvantage?

Mike was a very capable CTO but he also had a fantastic team that still exists. Mike’s team is now being led by Xavier Willame, who is a very experienced CTO and someone whom I have worked with previously at Sky.

 What’s your take on the free TV versus pay TV debate?

If you look at the history of multi-channel television in every market that it was launched in, free-to-air (FTA) competitors thought it would never work. It happened in America and it happened in Britain. In the United Kingdom, when subscription TV was launched, the dominant FTAs said it would never work and today, Sky TV has revenues in excess of £3 billion and they are a pretty big broadcaster. Even in Asia, the FTAs thought that subscription TV wasn’t really going to work but it took off and I think this region is geared for that to happen now. No doubt, FTA broadcasters have been very dominant and powerful and did not really see that there was going to be a role for pay TV to eclipse that but things have changed.

I agree that the quality of some of the FTA broadcasters like MBC here is fantastic. They have huge brand recognition and a portfolio of programmes that are worth watching. But our intention is to grow alongside the FTA market and to offer a different premium service that the consumer recognises offers good value for their money. FTA will always be there and I am not afraid of the fact that currently, FTA broadcasters in this region have a very big audience and the subscription audiences by comparison are relatively small because I am quite confident that as we grow, we will reach the critical mass where people recognise the relevance of the programming that we do.

 What is OSN’s biggest strength and what are the challenges ahead?

There is no question that for us the challenge here is what exists for a lot of multi-channel television — piracy. This is a big challenge but thankfully, we are able to fix that.

We are shifting our entire subscriber base to a new range of boxes that will allow us to properly showcase HD content and the premium content that we have. At the same time, it will allow us to switch off the illegal reception of our signals. When that happens, we are very confident that the people who enjoy the quality of our services today but have resisted the charm of paying us for it will be compelled to come to us legally. Piracy is an ongoing battle.

Our biggest strengths are our people and our portfolio of channels.

One of the other things that I’d like to achieve with these channels is to gain recognition for the investment we have made in our non-English language content that I suspect our viewers do not yet realise. This will be a focus for us as we grow so that we can ensure that the consumer does not just view OSN as a great TV platform but also sees us a great aggregator and producer of content.

There are a number of channels on our platform that offer exclusive Arabic content that we commissioned but for which, we do not get credit. We specifically commission this content for our platform. Our consumer does not identify those channels with us. We hope to change that.

Is piracy worth tackling?

Yes, of course! We used to have piracy in the UK, in Asia and many other markets but not any more because of a mixture of advanced technology platforms like the one we are transitioning to today and assistance from governments who see intellectual property abuse as a crime. The onus is on us to achieve this from a technological perspective.

But it is for the government to recognise this as a significant crime. Is it something we can tackle? Yes. Should it be tackled? Yes.

 Are your plans for 3D still on track?

3D is part of the roadmap but it is still very niche. When you look at some of the production work that is going on in the UK with regards to sports production in 3D, we realise it is amazing. But we also have to recognise that there isn’t a proliferation of 3D receiving equipment in this region. OSN has a technological platform that can embrace any technological advancement including 3D.

Our STBs are capable of downloading 3D content and showcasing it on a 3D screen. But the reception equipment is not there yet. It’s not such a high priority for me. The bigger priority is to continue to bring in a lot more high quality HD content and a good breadth of SD content. But the advantage we have in this market is that we are actually able to showcase 3D straight away if we want to.

 When’s the last time you held a camera?

Still camera? Very regularly as taking photographs is my hobby. But the last time I used a TV camera was probably in 1992. The last time I did a major news coverage was in the Yugoslav war.

I started my career in Channel 9 Perth, which is part of WIN Corporation. In 1985, I left Channel 9 Perth as a B grade cameraman to seek my fame and fortune in Melbourne, Australia and in 2008, I returned as MD of the parent company. Although the newsroom in Channel 9 Perth had been re-equipped with a lot of new cameras, at the back, they had a little museum sort of area with a whole lot of cameras from the past. I looked at it and realised that I had used all of those cameras when I was a cameraman there. Having said that, one of the joys of being a CEO is that you get to buy all of them. We re-equipped two of our major newsrooms in Channel 9 —Perth and Adelaide and we invested in Sony XD HD cameras, which are phenomenal.

Back in the days when I was on the road as a news gatherer and we travelled to far-flung places, we carried about 16 flight cases and carried a lot of tape-based equipment. Today, a disk-based camera and a laptop is all you need. In our days, we thought shooting video was amazing because you’d see the footage in real time versus the guys who shot on film a generation before us and had to wait three days to see it.

 So you agree that technology has revolutionised production and news gathering today?

Certainly. I think the technology changes have had a huge impact on the news business over the last 10 to 15 years. Disk-based cameras especially have revolutionised news gathering. The scenes out of Chile last month as the miners were being rescued is a great example. It was an amazing TV event that made for compulsive viewing. Not only were there cameras live at the top, there were cameras live at the bottom of the shaft as well. It’s not just the disk-based cameras but also non-linear editing that has changed the face of TV.

News coverage in war especially has seen huge shifts thanks to new technology. In the Vitenam war days, a cameraman went into the field, shot pictures of the conflict, came back, put the film in the canister, sent it off to London or New York, processed the film and two or three days later, it would appear on TV screens somewhere.

Track forward to the first Gulf War. We had massive satellite dish operations  and went live with press conference from Riyadh everyday. We would show everything.

Track forward again to the second Gulf War. Live cameras were placed on tanks as they went through the front so you could actually have live point of view pictures as the battle was unfolding. Technology has allowed that advancement to happen.

 What’s your opinion about acquiring sports rights. Can it be profitable?

Maybe in this region, they don’t make profits because of the ludicrous rates at which they are bought but BSkyB makes a lot of money on sport.

Sports rights have escalated dramatically in the last 10 to 15 years because of the predominance of subscription growth. If you look at the English Premier League, BSky B bought their first set of rights in 1991-1992 and paid £205 million for five years of rights. At that time, it seemed like an exponentially large amount of money. The last EPL global beam which was for three years was sold for about £2.5 billion. So it went from £205 million for five years to £2.8 billion for three years.

And what we’ve seen in some markets  — sadly, this market is one of them — is that rights costs escalate way beyond the economic capacity. So I would argue the money that has been paid particularly for rights like the Premier League cannot be economically returned in this market. What needs to happen is that if businesses are being run purely on economic rationale, the rights costs need to settle into a position that a legitimate business can afford to pay. They are valuable rights and sport is a strong product but ultimately, people want to watch television seven days a week and not just when football is on. Would I like to have the EPL still? Yes. Will I pay a ludicrous amount of money for it? No. Instead, we will continue to showcase great content for seven days a week and not for 90 minutes a week.