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      Home Tech Features

      Cautious optimism from MENA broadcast CEOs at BroadcastPro ME summit

      Vijaya Cherian by Vijaya Cherian
      December 23, 2017
      in Tech Features
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      With initiatives ranging from localisation and multi-platform solutions to diversifying revenue streams, CEOs at the BroadcastPro Summit made a case for growth despite challenges.

      The ballroom at Habtoor Grand was packed as industry professionals gathered to hear some of the most distinguished voices on the MENA broadcast landscape come together for the ASBU BroadcastPro ME Selevision Summit. They discussed issues critical to the survival of the broadcast industry in light of dipping market conditions, the geopolitical issues that have undermined the morale of the industry and the impact of FANG (Facebook/Amazon/Netflix/Google).

      Prior to the debate, Sam Barnett, CEO of MBC Group, issued an informal but potent statement in light of the recent events in the region, declaring that the broadcast network, despite the myriad challenges it was facing at the moment, was firmly forging ahead with its launches.

      Sam Barnett, CEO of MBC Group.

      “MBC is a prized asset, a jewel in any crown … We have several launches planned and intend to go ahead with them. In December, we will launch the region’s largest and safest kids’ VOD. Wizzo, our games portal, has broken all records this year, and in 2018, we will be publishing our own games. Shahid.net has had 10m unique users every month and 26m users during Ramadan. In 2018, we will be commissioning our own exclusive content for Shahid. On TV, we have just finished Top Chef. We have Voice and Voice Kids and we anticipate maintaining ratings at the same level we have had them to date. Our Turkish production company has produced the most successful Turkish TV drama ever. It has now launched on MBC and we will have the largest show in Turkey next year on MBC.

      “MBC is a prized asset … a jewel in any crown … We have several launches planned and intend to go ahead with them” Sam Barnett, CEO, MBC Group

      “So, it’s business as usual and … we will be competing as strongly as ever.”

      Karim Sarkis, CEO of Sync Media, who has traditionally moderated the CEO panel at the Summit, queried if the CEOs in the room were still in favour of an advertising supported business in the region, given the 30%-plus decrease in ad dollars in the last year.

      Zee MENA CEO Mukund Cairae commented that, despite the fact that the industry has lost north of a billion dollars of advertising revenue in the last two years with 2016 being “bad” and 2017 “worse”, he did favour the ad-supported model for running a TV business as “active engagement, and eyeballs is the goal towards which everybody is running”.

      However, he did caution that surviving 2018 would mean being “fiscally prudent” and aiming for “collaboration now more than ever”.

      Barnett offered a more optimistic outlook. While he agreed that in Saudi Arabia, TV advertising on FTA is four times more undervalued per capita compared to countries elsewhere, he added that the launch of people meters would give advertisers the confidence to invest.

      “As the business cycle starts to pick up, particularly in Saudi Arabia, and as the economy diversifies and gets more competitive, advertisers will battle for market share and the ad industry will continue to use TV. With technology able to divide up different markets into North Africa, Egypt and Saudi Arabia, there is a very robust case for FTA with TV. If the market has come down, it will go back up again.”

      Sanjay Raina, VP and GM of the Fox Networks Group.

      A fine example of a media house that has come up the ranks with new commercial strategies is Fox Networks Group under the helm of VP and GM Sanjay Raina.

      “For us, the debate is not FTA versus pay. It is all about content, collaboration and the consumer” Sanjay Raina, VP and GM at Fox Networks Group

      “A couple of years back, we took a call and rolled back our FTA model and moved into pay,” Raina said.

      “We have found some ways of launching more pay-TV products. Last year in April, we launched three Fox-branded channels that found widespread distribution across most of the pay-TV platforms. This year again, we have launched three Foxbranded products, one of which is an Arabic product. We are typically Fox. We are always hungry; we are always hunting. For us, the debate is not FTA versus pay. It is all about content, collaboration and the consumer. We will keep pursuing everything that falls within the three Cs.”

      Sachin Gokhale, who heads Viacom 18, which targets Indian expatriates in the Middle East, commented that the way forward for this brand has been to diversify its business.

      “We have been targeting a niche demographic that forms a large segment of the population in many markets but has historically been under-indexed and under-valued. We have premium content, so we have taken the conscious call of putting that content on pay. Because the pay market itself has not really grown for us, we diversified and set up a successful ancillary operation with localising our content and syndicating it to more broadcasters based here. We have grown from a single channel to a 22-channel operation; we make 30% of our top line from local initiatives like live events and local content. The fundamental appetite for content in the region is growing among that demographic, and you will see us work more in the SVOD space in collaboration with our partners.”

      “We make 30% of our top line from local initiatives like live events and local content” Sachin Gokhale, Media & Entertainment Business Head, MEA & Asia Pacific, Viacom18

      Sachin Gokhale, Media & Entertainment Business Head, MEA & Asia Pacific, Viacom18.

      Sarkis turned the discussion to Martin Stewart, CEO of OSN, the channel which lies at the heart of the pay-TV sector. He stressed that one of the big issues with pay is “the lack of respect for intellectual property rights, and I think it is incumbent upon content owners to take the lead for that”.

      He commented that while MBC and OSN have taken the lead on this front “fighting piracy with whatever legal means are at our disposal”, it’s important for the rest of the ecosystem including “content owners, telco operators and the entire marketplace” to come together … to grow our businesses in a profitable way”.

      He cautioned that if steps are not taken with urgency, one would “see uneconomic prices being paid for content which, in the short term, will hugely benefit those content owners, but does not create a sustainable business moving forward.”

      He called for “greater regulation” and stated that “it doesn’t matter if people meters are put in place if most of the viewing is done through illegal means.”

      A slightly different player in the mix was Tarek Mounir, VP and GM of Turner MENAT. Sarkis asked how Turner’s approach to the business has been different, given that it offers “niche content”.

      Turner’s business model over the years has been to distribute its revenue generation between advertising, subscription, merchandising and events.

      “It doesn’t matter if people meters are put in place if most of the viewing is done through illegal means” Martin Stewart, Chief Executive Officer, OSN

      Martin Stewart, Chief Executive Officer, OSN.

      “Having a diversified portfolio of revenues helps,” said Mounir, especially “in the light of 2017 not being a vintage year for the ad sales market”.

      He added: “We have managed to consistently grow our business in the last seven years, and I think while some of our partners don’t necessarily grow as the rest, having a full portfolio helps create a greater balance. Being part of the largest theme park and a big retail industry has paid off. Even with advertising, our partners have delivered for us so we didn’t take the hit people expected us to take.”

      Having said that, he added that the market “remains very undermonetised in several areas, whether it is pay-TV penetration or ad sales undervaluation per capita”.

      Sarkis then moved to a bigger debate that a number of regional broadcasters have been toying with, without much success – collaboration. He commented that Barnett has mentioned collaboration and invited other broadcasters to join the Shahid platform.

      “The next wave of competition in this market is not from here,” clarified Barnett.

      “It is from the international players. The cost of their platform is amortised in another 70 countries, and they are coming with cheap overheads to take the advertising dollars from us. While before we had the luxury of competing between ourselves, we now face an external threat and they provide an opportunity to collaborate.

      “Being part of the largest theme park and part of a big retail industry has paid off” Tarek Mounir, VP, General Manager MENAT – Turner

      Tarek Mounir, VP, General Manager MENAT – Turner.

      “Shahid generates 10 million unique users every month, and if people want to put their content on this platform, they are welcome. We don’t want your money. Come and make your advertising dollars on the platform. Yes, the platform will get stronger, but all of us will benefit from such a collaboration. And on the back of that, I have had three serious approaches and we are trying to work out a model on how we do it,” he explained.

      Stewart seconded this.

      “The great FANGA (with Apple making up the last A) is coming… unless everyone starts cooperating and developing partnerships in such a way that mutually benefits those who have been here a long time, those outside corporations will simply take the eyeballs.”

      When the term ‘joint venture’ was thrown in, the response was mixed. Cairae was sceptical, calling it a “surefire recipe for disaster” and stating that often, there is nothing “joint about a JV”. He said: “I prefer to date first before we engage in a joint venture.”

      Barnett agreed that a JV can be complicated and suggested a simpler contract between media entities to take that first step towards collaboration.

      Gokhale stepped into the conversation at this point, stating that most of the biggies in the US, from CBS and Disney to Showtime and HBO, had all done it individually, and Hulu was an exception. He seemed to suggest that collaboration is still some years away.

      “Active engagement and eyeballs is the goal towards which everyone is running” Mukund Cairae, CEO, Zee Entertainment

      Mukund Cairae, CEO, Zee Entertainment.

      “Everyone’s doing their own B2C venture. While we recognise the need for collaboration, as content owners we have always traditionally been in the B2B space, where we have relied on other parties to make that last mile possible. And now, we are in a scenario where we suddenly see that there is limitless potential to reach the consumer directly and create that value for your business by being B2C. So I think it will take a while before serious players come together to collaborate.”

      Sarkis asked if Turner would consider a collaboration with MBC, given the latter’s plans for a kids’ VOD launch in December.

      “Collaboration sounds much more appealing than doing it on your own,” Mounir said, although he added that Turner prefers to launch its product with a number of platforms rather than go for an exclusive tie-up.

      Raina added at this point that Fox was launching Nat Geo Kids Abu Dhabi “and if Sam says let’s go ahead with it, we will go ahead with it”.

      But he also cautioned: “Like in India with arranged marriages, it’s all in the stars. If they don’t mix, typically you don’t have a match.” OSN’s Stewart suggested they “go to the back room”.

      “I even have a pen,” he quipped.

      On a more serious note, Stewart seemed less optimistic that a regional collaboration would happen soon. “I guess we will do more deals with FANGA before we do anything here.” Clearly, there was an urgency for collaboration in the room. As Raina pointed out: “Netflix goes to 121 markets and has 100 million subscribers. The ability to distribute globally is what makes them a threat to our business. How can we create that universality and versatility in our distribution within the region and be part of it?”

      Reiterating the urgent need for collaboration, Barnett pointed out: “We have less time here, because the market does not have the degree of regulation that most other markets have. This market has been anarchic in the past, and what has happened across the region in the last weeks and months leads me to predict that governments will try and become more protectionist. FANG then can come here and dump cheap advertising on this market.”

      The discussion then turned to the other big issue – going digital.

      Stewart said OSN is rolling out short-form content on its web platform, Wavo.

      “We are not sure how it will pan out, but we are trying to take the opportunity to bring that sort of content into the platform, given the type of demographic that we are going after. Bringing it into Wavo is an interesting experiment to see how it develops.”

      One of the big discussions around digital was the choice of content, the technological infrastructure and what makes the platform so successful, and if it was indeed overtaking linear platforms.

      “It has definitely lowered VPN usage, and this was evident when Netflix launched here,” Stewart pointed out.

      Gokhale cited the example of Voot, a product from the Viacom 18/Indiacast stable.

      “Voot is an AVOD play service which collates around 40-45,000 hours of content that we run across our group channels. 90% of the content consumption comes from the top 5% of the content. OTT players have tapped into this. One of the big things that OTT is bringing to the table, apart from the convenience of accessing content, is lower ARPUs, easier subscription models and lesser lock-ins. Given how people consume content, OTT will take away from linear consumption and our traditional pay-TV platforms. We should try to get out of the channel business and truly be in the content business.”

      Karim Sarkis, CEO of Sync Media has traditionally moderated the CEO panel at the Summit.

      Bernett disagreed, saying the market remains strong. ”We are not seeing the decline that we see elsewhere. There is a positive story about FTA in the region, and linear TV continues to be popular. It is an economic fact and we will continue making money out of it for the next few years.”

      Mounir pointed out that shortform content is getting a lot of traction but has a short monetisation life. “If you really want to be in the business of monetising content and premium content, you need to know whom you’re really after and know what to deliver to them, whether it’s FTA, pay, OTT or linear.”

      He added that despite the many challenges and adjustment periods that broadcasters will have to face, eventually premium content developers will stay, regardless of the technology that delivers it.

      The panel agreed and concluded with positive notes from everyone. Barnett declared that MBC had its busiest week in early November, while Mounir pointed out that the Middle East and Turkey remain “high-growth markets” for Turner.

      Cairae said his focus would be on localisation, multi-platform solutions, reaching the consumer and getting the eyeballs, while Raina added that “there’s still a lot we can do on pay-TV platforms as differentiated content”.

      Gokhale advocated localisation, diversifying revenue streams, getting out of the channel business and sticking to content. Stewart concluded by saying that OSN’s aim is to produce better content and grow its reach.

       

      Tags: ASBU BroadcastPro Selevision Summit and Awards 2017CEOs panelFox Networks GroupKarim SarkisMartin StewartMBC GroupMukund CairaeOSNSachin GokhaleSam BarnettSanjay RainaSync mediatarek MounirTurnerViacom18Zee MENA

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