What happened in 2012? A cursory glance would suggest that 2012 was a year like any other in the MENA television industry. By Nick Grande The number of pan-regional free to air channels went up yet again, taking the total to over 700. As usual, the increase had little or no correlation with increases in […]
What happened in 2012?
A cursory glance would suggest that 2012 was a year like any other in the MENA television industry.
By Nick Grande
The number of pan-regional free to air channels went up yet again, taking the total to over 700. As usual, the increase had little or no correlation with increases in the revenue pie. It is as hard as ever to find profitable broadcasters in the Middle East, but that doesn’t seem to stop new entrants from flooding the market further.
Dig a little deeper though, and there are signs that the TV advertising industry year might be about to turn a major corner. To the surprise of many, a group of the industrys most powerful players managed to cooperate to launch the region’s first people meters project “tView” here in the UAE. Lack of high quality audience measurement data has always been a limiting factor on advertising rates, but since October 2012 we have had a regular weekly diet of detailed UAE ratings information from tView. The indications are that Saudi Arabia may be launching something similar in 2013.
The most dynamic TV activity in the region was taking place in Egypt, where the Arab Spring has sprung several new television networks, taking TV in the region’s most populous country in new directions and offering a much-needed commentary on this fledgling democracy. We can reasonably expect Advertising revenue growth in Egypt next year.
The big channel launch of the year was Sky News Arabia, a joint venture between BSkyB and Abu Dhabi. ChannelSculptor was proud to play a role in the distribution strategy for the channel, as it went live on numerous satellite, IPTV and OTT platforms around the world on 6th May. The ratings data I have seen suggests that it already occupies a credible third place (behind Al Jazeera and Al Arabiya) amongst the 30 or so news channels in the region.
I have to admit that I wasn’t immediately convinced by the merger of Showtime and Orbit back in 2009, but now the dust has settled on the deal, OSN is starting to make sense to me. The 2012 launch of their “OSN Play” OTT service may be a copy paste of Sky Go, but it firmly places the network years in front of its competitors in the region. Perhaps more importantly, by securing OTT rights with major Hollywood studios OSN has dented MENA market entry prospects for Netflix, Amazon and the like.
Over at MBC, Sam Barnett completed his first year following his promotion to CEO, launching the new Egypt-focused channel MBC Masr and announcing MBC’s intention to build major new production facilities in Dubai Studio City. TV professionals working in Dubai Media City cannot fail to notice the 10 foot high security fence recently erected around MBC’s headquarters: a reflection perhaps of heightened focus on Al Arabiya news channel as a result of the Arab Spring.
There were a couple of interesting developments at the state-funded level. The Saudi Ministry of Communication and Information has started the process of “corporatising” Saudi TV, presumably echoing the semi-commercial models created by Dubai Media Inc. and Abu Dhabi Media in the last decade. The same Ministry has threatened to shut down domestic TV broadcasters that instigate sedition in Saudi society or threaten national unity. Over in Qatar, a major new earth station was launched in 2012 to compete with Samacom Dubai, Jordan Media City and Egypt Media City.
Al Jazeera’s intention to consolidate its global expansion by becoming a powerful force in US media became ever more evident. Its beIN Sport network launched on all the major US TV networks, describing itself as North America’s premier sports network and carrying La Liga, Serie A, Ligue 1 and English Championship at launch. Al Jazeera then followed up with the acquisition of Al Gore’s political commentary channel Current TV, leading inevitably to extensive media commentary and negative press amongst right-leaning publications. Surprisingly, the renamed “Al Jazeera America” channel apparently wont be streaming its programming on the web.
There were some high profile leadership changes in 2012: Noura Al Kaabi took over as CEO of twofour54 in April. Her predecessor Tony Orsten had always made it clear over his four years at the helm that he could be succeeded by a senior Emirati, so his move to a board advisory position was not a surprise. By contrast, the departure of Malcolm Wall from Abu Dhabi Media after only six months in the role of CEO was a major shock to the regional industry. He was replaced by ADM board member Ayman Safadi on 11th March.
At Dubai Media Inc, Sami Al Qamzi (previously Director General at the Dubai DED) was appointed Vice Chairman and MD in November, taking over from Ahmad Al Shaikh. The restructuring creates greater autonomy in the various DMI media units, with Ahmad Al Mansouri, (former head of Sama TV) now heading up Dubai TV.
Former Showtime Arabia boss Peter Einstein joined Rotana Media Group as deputy CEO in Q4. Showtime was jointly owned by Viacom and the Kuwaiti royal family during his time in office, so he will presumably find Rotana’s shareholder combination of Prince Al-Walid bin Talal and NewsCorp a familiar experience.
What didn’t happen in 2012?
At least once a week, I get a phone call or an email asking me if I’ve heard anything about MENA EPL rights. Back in June 2012 when Richard Scudamore announced the BSkyB and BT deals, he hinted that all the international deals would be completed by September. Still no announcements though, and the Al Jazeera vs. Abu Dhabi Media rumour mill has now been running riot for at least a year. Perhaps the EPL isn’t going to do a MENA rights deal at all.
If I cast my mind back to 2011 for a moment, one of the big stories was the launch of MBC’s high definition channels encrypted on the new Technosat ICHD network, supported by a $10 million advertising campaign. Industry strategists were abuzz with expectation of a monster new low-cost Pay-TV network reaching 15+ million homes in the region. Now, at the beginning of 2013, MBC’s HD channels are available on every regional Pay-TV network, and ICHD seems a distant memory.
What to watch out for in 2013
People meters in Saudi Arabia could well be the MENA industry story of 2013, particularly given the early success of tView in the UAE. A lot depends on the backing of MBUs and sales houses, but the region’s TV industry is crying out for greater transparency on viewership in order to give greater confidence to advertisers and to boost advertising rate cards.
Towards the end of 2013 we can expect another major news channel – “Al Arab”. Funded by Prince Al-Walid bin Talal’s Kingdom Holdings group, the channel will be headquartered in Bahrain and will carry content from Bloomberg as part of its programming line-up.
We will see another serious attempt at low-cost high penetration Pay-TV in 2013, in the form of the “MyHD” network. MyHD has already entered into a capacity partnership with Abu Dhabi’s YahLive HD hotspot at 52.5°E, and is expected to develop a low cost portfolio of encrypted HD channels based on equivalent free to air SD channels, as regional broadcasters upgrade to MPEG4 HD and seek to claw back some of their technical investment through subscription revenue shares. Apart from having a good range of content, the price point will be critical to MyHDs success. Its essential in particular that their set top boxes are the same price or cheaper than free to air equivalent boxes if they want to achieve mass penetration.
On a personal note, ChannelSculptor will be broadening our focus this year beyond the major regional networks to support and develop some of the many middle-tier regional broadcasters with the potential to become big regional players.
Nick Grande is Managing Director of ChannelSculptor.