THE BUSINESS OF DIGITAL CONTENT DELIVERY
BUCKING THE TREND How MBC is raising revenues despite the advertising slump
An ITP Business Busi Publication
BOXING CLEVER Next-gen STBs and their role in driving ARPU
SHIFTING SANDS Could Saudi Arabia prove the next major Middle East media hub? VOLUME 2 ISSUE 12 DECEMBER 2009
Welcome to the largest Arab community in the sky — only from Arabsat In a world getting more and more interconnected, Arabsat is helping to bring people closer and make the world a smaller place. As the largest satellite operator in the Arab world covering the Middle East and Africa—as well as Europe and beyond—only Arabsat offers the full spectrum of broadcast, telecommunications and broadband services. With the youngest satellites in the region, plus more satellites launching every year until 2012, this capacity will continue to grow and provide unprecedented reach, superior reliability and unmatched flexibility for broadcast and telecom operators. Indeed, Arabsat gives you the most powerful way to reach and connect with the largest Arab community in the sky—and much more. Join our premium neighborhood now.
www.arabsat.com
COMPANY PROFILE
www.ar abs at. com
Arabsat. Youngest fleet. Highest reliability. Maximum flexibility. Founded in 1976 by the 21 member-states of the Arab League, Arabsat has been serving the growing needs of the Arab world for over 30 years. The Arabsat world now covers millions of homes in over 100 countries across the Middle East, Africa and Europe, including over 164 million people across 21 Arab countries. Serving the Middle East & Africa
Telecommunications Sector
Arabsat’s main coverage area spans the Middle East and North Africa including Sudan. However, in the last 5 years , the telecommunications sector in the north and south of Africa has experienced huge demand. Arabsat has thus started expanding its reach to bring all of Africa within its coverage area. To achieve this, Arabsat has added its 5-A, 5-C and Badr-5 satellites to cover Africa, complementing its original Middle East coverage. These satellites are located at the Arabsat orbital positions of 20º, 26º and 30.5º East . This vastly expanded reach will lead to the following enhanced offerings in Africa:
The current Arabsat 2-B satellite at 30.5º East and Badr-6 satellite at 26º East provide C-band coverage for two-thirds of the African continent. To expand its African coverage and reach all of the continent, Arabsat 5-A will be located at 30.5º East, replacing Arabsat 2-B by the end of 2009. Arabsat 5-A will provide higher spot power over the eastern and western parts of Africa.
Broadcasting sector Arabsat has started C-band transmissions of its Digital TV bouquets from its 30.5º East orbital position, creating a TV Hot-Spot for DTH TV services for all of Africa. Two bouquets are currently carrying over 20 TV channels. These bouquets will be transferred to the new Arabsat 5-A satellite planned for launch by end of 2009 to the same orbital position. Once launched, Arabsat will have 100% coverage of the African continent with excellent downlink power allowing dishes of just 1 to 1.2 meters to receive these TV channels. Additionally, Arabsat will launch its Badr-5 satellite in the first quarter of 2010. Badr-5 will cover the whole Middle East and North Africa, supporting its existing Ku-band TV Hot Spot at 26º East. It will act as an in-orbit hot backup satellite for the existing Arabsat fleet (Badr-4 and Badr-6) and provide expansion capabilities. On board the new Badr-5 satellite, a steerable Ku-band beam can be directed toward any area in the west of Africa—from Morocco in the north to South Africa in the south—to provide DTH services in Ku-band over specific target areas.
In addition, Arabsat has deployed another beam covering two-thirds of Africa, the Middle East and Central Asia. This beam operates in a planned C-band spectrum of 6.7 to 7.0 Ghz uplink. This new addition—which also covers Europe’s main Internet backbones—will provide vastly enhanced capacity for various telecom services, GSM backhauling, Internet and other VSAT or dedicated networks across the expanding Arabsat world. Towards the end of 2011, Arabsat will also launch its 5-C satellite and position it at 20º East, an ideal orbital position to cover the African continent. Arabsat is launching one satellite every year until 2012, vastly expanding its coverage across all of Africa. With its enhanced capacity, the Arabsat fleet will be a vital contributor to African development, opening new business opportunities in the telecommunications and broadcasting sectors, generating new jobs and stimulating the business environment with new tools for developing and growing the African economy.
For further information, please contact: Arab Satellite Communications Organization, P.O. Box 1038, Diplomatic Quarter, Riyadh 11431, Kingdom of Saudi Arabia Fax: +966 1 483 0940 Email: info@arabsat.com
CONTENTS
20
4 WEB HIGHLIGHTS Spot poll: Which film fest impressed you the most?; top web stories; editor’s choice: Yasalam.
8 THE BRIEFING UAE prepares for iTunes; GV sale talks continue; Nokia claims DVB-H is key for mobile video.
12 ONLINE ADVANCES Could the internet overtake TV as the region’s advertising medium of choice?
20 COVER STORY: SHIFTING SANDS Digital Broadcast looks at Saudi Arabia’s emergance as a Middle East media force.
40 MARKET ANALYSIS The world’s top earning and fastest growing teleports revealed.
ALSO IN THIS ISSUE...
28
32
36
EXCLUSIVE: SAM BARNETT
AUTOMATION FOR THE PEOPLE
BOXING CLEVER
The MBC chief reveals what the FTA network has done to thrive in the recession.
Why smaller can also mean better in the world of broadcast automation.
The STB technology looking to meet consumers growing expectations.
www.digitalproductionme.com
DECEMBER 2009 03
DPME.COM ROUND-UP
The online home of:
MOST POPULAR STORIES M
2 3
PAY TV CHIEF BACKS GULF PIRACY BLITZ Orbit Showtime CEO Marc-Antoine d’Halluin, has welcomed the recent crackdown by authorities in Bahrain on websites enabling the Dreambox satellite TV receiver. digitalproductionme.com/news
READER COMMENT: “Banning the Dreambox because it can perform an illegal function would be like banning knives because they can be used to murder people...” Andrew, Riyadh, KSA.
4 5
Google plans ‘iPhone killer’ release in Q1, 2010 Thomson reopens GV sale talks Killers call time on bench warmers Handsets could be next security threat: expert MySpace CEO jumps ship to France
DATE: November 24
1
EDITOR’S CHOICE IN PICTURES
YASALAM
ALSO ON THE DPME SLATE THIS MONTH...
QATAR RISING
INTERVIEWS
How Qatar is pioneering the implementation of cutting edge AV technology.
NEWS BREAKERS
Al Jazeera reveals its pioneering approach to new media.
Beyonce, Kings of Leon, Aerosmith and Jamiroquai star in Abu Dhabi’s Yasalam concert series.
SPOT POLL
digitalproductionme.com/analysis
digitalproductionme.com/interviews
WHICH REGIONAL FILM FEST IMPRESSED YOU MOST?
TECHNOLOGY
HAVE YOUR SAY
33%
CABLE TIES
DPME explores the relationship between IPTV and broadband services.
digitalproductionme.com/technology 04 DECEMBER 2009
FILM FESTS: BIG ON NAMES... 27% ...short on substance? Are the local fests doing more harm than good for the industry? digitalproductionme.com/haveyoursay
20% 14% 6%
MEIFF, Abu Dhabi. Tribeca, Doha. Cairo Film Festival. Gulf Film Festival. Others.
DATE: November 24
ANALYSIS
www.digitalproductionme.com
OFFSET & PRIME FOCUS SATELLITE ANTENNAS Gessat Offset and Prime Focus antennas offer the best quality and performance for a perfect reception quality. 19 models in its product list which has been growing in parallel with the newest technologies meet all the requirements.
MULTIFOCUS SATELLITE ANTENNAS Gessat multifocus satellite antenna systems provide a reception of multiple satellite broadcasting through only one satellite dish. Enjoy the technology with this new system to be used for the first time in Turkey.
FIBER SATELLITE ANTENNAS Wholly imported Fiber satellite antennas offer solutions for high requirements in broadcasting reception with its advanced production techniques and high qualified materials used during the production processes.
TX / RX ANTENNAS TX/RX antennas as part of indispensable VSAT applications make a strong impression with its stability, easy installation advantage, and resistance to harsh environment conditions.
www.gessat.com.tr
COMMENT
Registered at Dubai Media City PO Box 500024, Dubai, UAE Tel: 00 971 4 210 8000, Fax: 00 971 4 210 8080 Web: www.itp.com Offices in Dubai & London ITP BUSINESS PUBLISHING CEO Walid Akawi Managing Director Neil Davies Deputy Managing Director Matthew Southwell Editorial Director David Ingham VP Sales Wayne Lowery EDITORIAL Senior Group Editor Aaron Greenwood Tel: +971 4 435 6251 email: aaron.greenwood@itp.com Deputy Editor John Parnell Tel: +971 4 435 6271 email: john.parnell@itp.com ADVERTISING Commercial Director Fred Dubery Tel: +971 4 435 6339 email: fred@itp.com Sales Manager Gavin Murphy Tel: +971 4 435 6369 email: gavin.murphy@itp.com N.American Advertising Representative Michael J. Mitchell Tel: + 1 631 673 3199 email:mjmitchell@broadcast-media.tv Japan Advertising Representative Mikio Tsuchiya Tel: + 81 354 568230 email: ua9m-tcy@asahi-net.or.jp STUDIO Group Art Editor Daniel Prescott Art Editor Simon Cobon PHOTOGRAPHY Director of Photography Sevag Davidian Chief Photographer Khatuna Khutsishvili Senior Photographers Efraim Evidor Staff Photographers Leila Cranswick, Lyubov Galushko, Thanos Lazopoulos, Jovana Obradovic, Ruel Pableo, Rajesh Raghav PRODUCTION & DISTRIBUTION Group Production Manager Kyle Smith Production Manager Eleanor Zwanepoel Managing Picture Editor Patrick Littlejohn Image Retoucher Emmalyn Robles Distribution Manager Karima Ashwell Distribution Executive Nada Al Alami CIRCULATION Head of Circulation & Database Gaurav Gulati MARKETING Head of Marketing Daniel Fewtrell ITP DIGITAL Director Peter Conmy ITP GROUP Chairman Andrew Neil Managing Director Robert Serafin Finance Director Toby Jay Spencer-Davies Board of Directors K.M. Jamieson, Mike Bayman, Walid Akawi, Neil Davies, Rob Corder, Mary Serafin
DREAMBOX ON TRIAL
A
n interesting debate took place last month sparked by a news story that we ran on Digital Broadcast’s online home, DigitalProductionME.com. The story was about the recent activity in Bahrain to block pay TV signals to illegal set top boxes. The user comments that followed gave some interesting insights into how the piracy debate is played out on the ground. Firstly, there was an allegation that pay TV prices are so high in the region, piracy is almost inevitable. An understandable point of view but not necessarily a valid one. An enlightened DPME reader pointed out that an average package with Sky in the UK costs in excess of US $80. The equivalent (EPL included) offering in the Middle East would be closer to $60. The next logical step of the argument is ‘but most people in this region cannot afford $60 a month’. Again, this is a fair statement, but if someone can afford a Dreambox and an internet connection to stream keywords from, pay TV is not far from their reach. Another branch of the debate surrounded the legality of the Dreambox itself. One contributor commented that “banning the Dreambox because it can perform an illegal function would
be like banning knives because they can be used to murder people”. I’d like to point out that in most countries carrying certain types of knives – namely those with no clear function other than to intimidate, cause injury and generally create trouble – are very much illegal. It is perfectly acceptable to brandish an 8-inch butcher’s knife in a kitchen, but less so in the middle of a mall. So the pertinent question should be, is the Middle East market place a kitchen or a mall? I would argue that it is the latter. Pay TV operators and their security partners select STBs carefully in order to protect their content. The Linux nature of the Dreambox means it can be programmed to perform many functions, including illegal ones. With so may non-programmable satellite tuners on the market the only gap in the market the Dreambox fi lls is the one labelled ‘mischief’.
JOHN PARNELL Deputy Editor john.parnell@itp.com
Circulation Customer Service Tel: +971 4 435 6000 Certain images in this issue are available for purchase. Please contact itpimages@itp.com for further details or visit www.itpimages.com. Printed by Color Lines Printing Press
The online home of:
Subscribe online at www.itp.com/subscriptions The publishers regret that they cannot accept liability for error or omissions contained in this publication, however caused. The opinions and views contained in this publication are not necessarily those of the publishers. Readers are advised to seek specialist advice before acting on information contained in this publication which is provided for general use and may not be appropriate for the reader’s particular circumstances. The ownership of trademarks is acknowledged. No part of this publication or any part of the contents thereof may be reproduced, stored in a retrieval system or transmitted in any form without the permission of the publishers in writing. An exemption is hereby granted for extracts used for the purpose of fair review.
Published by and Copyright © 2009 ITP Business Publishing, a division of ITP Business Publishing Group Ltd. Registered in the B.V.I. under Company Registration number 1402846.
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TO SUBSCRIBE please visit www.itp.com/subscriptions DECEMBER 2009 07
THE BRIEFING
GOOD MONTH ACTIVISION BLIZZARD The games publisher saw its Call of Duty: Modern Warfare 2 title become the biggest entertainment release of all time. In its first five days of release it grossed US $550 million, according to company. The previous record, also set by a computer game, Grand Theft Auto IV, was $500 million in five days. “Call of Duty: Modern Warfare 2 has become the largest entertainment launch in histor,” said Robert Kotick, CEO, Activision Blizzard. “Millions of consumers have chosen to play rather than engage in other forms of media.”
BAD MONTH ELECTRONIC ARTS While Activision Blizzard was celebrating last month, it was a different story for rival publisher Electronic Arts. In addition to earlier job cuts this year of 1100, the company announced that it was to cut a further 1500 positions. The move – which will save the company $100 million per year – will see 900 developers, 500 game publishers and 100 corporate positions lost.
08 DECEMBER 2009
BROADCAST BUSINESS
ITUNES MUSIC STORE COMING TO UAE: TRA Talks over Sony and Amazon electronic reading devices also underway Popular online services provided by Apple, Amazon and Sony could soon be available in the UAE as part of new talks with the country’s Telecommunications Regulatory Authority (TRA). The TRA is in discussions with a view to allowing residents access to new services to download music, books and fi lms. The proposals could mean that the Apple iTunes Music Store and electronic reading devices such as the Amazon Kindle and the Sony Reader could soon be available in the UAE, The National reported. “We are working with Amazon so they can sell the Kindle here and they can allow users in the UAE to use the [device]. The same thing with iTunes,” Mohamed al Ghanim, the director general of the TRA told the paper. “We have contacted them. We have reached an advanced stage. I hope that soon we will have it here soon.” While there are no fundamental roadblocks stopping their introduction in the country, sort-
ing out the digital rights for each stakeholder could take some time, the paper added. More than six billion songs have been downloaded since the iTunes store was launched in April 2003. UAE internet users can currently download music through services launched by Nokia, Etisalat and Getmo, a joint venture between Abu Dhabi Media Company and Sony BMG. While the Amazon Kindle and Sony Reader are not commercially available in the UAE, they can be bought at a number of grey-market retailers.
Mohamed al Ghanim, director general, UAE TRA.
MONTH IN NUMBERS
57%
Percentage of people surveyed in UAE that would switch telco given the chance.
79%
Percentage of those surveyed citing Etisalat as their main service provider.
THOMSON RE-OPENS GV SALE TALKS Thomson is aiming to tie-up the sale of Grass Valley and is currently in “active discussions with a number of buyers”, according to a source close to the deal. The company had stated in July that it had entered into exclusive negotiations with a potential buyer, thought to be a US-based technology investment fi rm, Platinum Equity. The identity of this company was never confi rmed by Thomson.
In October, however, the company said that it was continuing with non-exclusive discussions for the sale of GV, sparking claims that the Platinum Equity talks had collapsed. The Thomson Group is also selling off its PRN digital signage unit as looks to focus its attention on its services for content creators including its set top box business and the Technicolour fi lm processing business. www.digitalproductionme.com
THE BRIEFING
PLATFORMS
DVB-H KEY FOR MOBILE VIDEO FUTURE, SAYS NOKIA Mobile broadcast standard is the only way to support large audiences for special events
Bjorn Bunte.
Linear broadcast transmissions are essential to support mobile video services with DVB-H best suited to the Middle East, according to Bjorn Bunte, senior business manager for broadcast TV at Nokia. “The Middle East is a strong market for DVB-H, there are no indications that
other terrestrial broadcast TV standards will take hold in the region,” said Bunte. “We see streaming based TV services in more or less every market worldwide but as these become more popular we also see the drawback of these, which is network capacity,” claims Bunte. “We have seen cellular mobile networks collapse because so many people have been trying to watch mobile TV at the same time. This tends to happen during sporting events.” According to Bunte, DVB-H networks can be integrated with the existing GSM network infrastructure. He proposes a service using DVB-H to support large-
scale events such as international sporting events with other niche content available via streaming. “The consumer doesn’t need to worry which format they are using. These services should be unified in one application. If the viewer strays outside the DVB-H network they should be able to receive the same content via streaming,” he said.
ON AIR A consortium including Etisalat, du, DMI, MBC, ADMC and Tecom will launch DVB-H services in Dubai early next year.
QUOTE OF THE MONTH
The important point is that the key Saudi players will come back to the Kingdom and that will change the dynamics of the region. MATTHIEU DE CLERCQ, Project manager, A.T. Kearney.
Peter Einstein, CEO, Eclipse Digital.
ECLIPSE DIGITAL ACQUIRES VAST WILD BUNCH CONTENT LIBRARY
EUROSPORT AND DU FORM LOCAL PARTNERSHIP FOR WEB PORTAL
HANDSETS COULD BE THE NEXT SECURITY THREAT: EXPERT
Dubai-based Eclipse Digital, a new entrant in digital media, archival and content acquisition management, has partnered with Paris-based production and distribution firm, Wild Bunch. The partnership will give Eclipse Digital access to more than 1000 titles presently held by the French company.
Eurosport and UAE telco du are to launch an Arabic online sports portal in the first development of the organisations’ new partnership. From this month, users across the MENA region will be able to select one of 12 customised Eurosport Arabia landing pages, announced Laurent-Eric Le Lay, CEO, Eurosport (pictured).
Mobile devices could emerge as the next major security threat for the communications industry, according to Tony Gray (above), local business director of the P3 Communications consultancy. “There’s always been the thought around the industry that the next level of threats will come from the handsets themselves,” said Gray.
www.digitalproductionme.com
DECEMBER 2009 09
THE BRIEFING
PLATFORMS
ORBIT SHOWTIME CHIEF BACKS PIRACY BLITZ Operator commends efforts by government and TRA in Bahrain.
The latest Arab Advisors Group survey of the MENA FM radio market has been released showing wide variations across region. The report covered a total of 18 countries.
BY THE NUMBERS B
RIDING THE RADIO WAVES
346
The number of stateowned radio stations.
50
010 DECEMBER 2009
Source: Arab Advisors Group 2009
Number of radio stations broadcasting in more than one country.
Marc-Antoine d’Halluin, CEO, Orbit Showtime.
3.8 million JAMPRO APPOINTS JIM GODFREY TO INTERNATIONAL SALES TEAM
176
8
joining the markets defending IPR holders. This will enable the development of a local movie and TV production industry, a much needed dimension of the region’s progression.”
Number of viewers accessing MBC’s Shahed online VOD platform this Ramadan.
MOVERS & SHAKERS
The total number of FM radio stations.
The number of stateowned radio stations in Algeria.
Orbit Showtime has welcomed the recent crackdown on websites enabling the Dreambox satellite TV receiver by authorities in Bahrain, however calls remain for stronger action against the physical distribution of the hardware itself. “Dreamboxes are outlawed STBs giving illegal access to Orbit Showtime channels,” said Marc-Antoine d’Halluin, CEO, Orbit Showtime, speaking exclusively to Digital Broadcast. “It is theft of intellectual property rights (IPR), and the Middle East is now fast
Broadcast antenna manufacturer Jampro announced that Jim Godfrey will join its growing international sales team. “Jim’s extensive knowledge of the market and the industry will be an invaluable tool for both our customers and our company. We are delighted to have him as part of our team,” said Alex Perchevitch, president of Jampro. Godfrey has previously held senior positions at Tieline Technology and Marti Electronics.
ROSS VIDEO NAMES BRIAN OLSON AS BUSINESS DEVELOPMENT MANAGER FOR XPRESSION Brian Olson has been named business development manager for XPression, the company’s 2D/3D HD character generator. “Brian will work closely with Ross’ regional sales managers and the XPression product manager, and will support our valued channel partners as we build the Ross brand in the Graphics marketplace,” said Kyle Luther, national sales manager, USA.
www.digitalproductionme.com
THE BRIEFING
TWOFOUR54 TO LAUNCH COMEDY CENTRAL ARABIA MTV Networks International (MTVNI) and twofour54 have confirmed a new deal to establish an Arab comedy content production studio under the Comedy Central brand. “We feel that this desire for Arabic comedy content, combined with the Comedy Central brand, portfolio and know-how, affords us an opportunity to provide viewers and broadcasters alike with content that is relevant and funny to Arabs, in their own language,” said Bhavneet Singh, managing director and executive VP, Emerging Markets at MTVNI.
Endemol will launch a free, social gaming version of its international game show Deal or No Deal online at the end of this month on Facebook UK. This will be followed by further launches in other territories and on other major social networks in 2010. This is Endemol’s first venture into the social gaming market and will be funded through advertising and sponsorship. Peter Cowley, global head of Original Digital Productions at Endemol commented that Deal or No Deal is “just one of Endemol’s many global brands that can seamlessly cross over to social gaming”.
BROADCAST BRIEFS
ENDEMOL JOINS THE FREE SOCIAL GAMING MARKET
BAHRAIN SIGNS DEAL FOR ARABIC WEB CONTENT CENTRE Bahrain has launched a major initiative to increase the amount of Arabic online content, which aims to create thousands of new jobs. The initiative, led by Bahrain’s eGovernment Authority (EGA) and the United Nations Development Programme (UNDP) will see Arabic content in websites “increase significantly” from the present one percent, said Cabinet Affairs Minister Sheikh Ahmed bin Ateyatala Al Khalifa. The EGA and the UNDP will finance the creation of the centre equally, with the total investment valued at US $486,000.
TELECOMS MARKET IRAQ SIGNS UP TO GULF FIBRE OPTIC CABLE PROJECT Iraq is set to connect to a fibre optic cable project linking most of the Gulf states, after the country’s incumbent telecom operator, Iraq Telecommunications and Post Company (ITPC), signed a deal with Gulf Bridge International (GBI),
a Qatar-based submarine cable operator. The two companies signed an agreement to establish a landing for GBI’s fibre optic International Cable System in Iraq. The link will be Iraq’s first international fibre optic cable connection. GBI’s International Cable System network, which is due to be operational in 2011, will link together the Gulf states and link the Far East and Europe.
HORNE RESIGNS AS BAHRAIN’S TRA GENERAL DIRECTOR The combative head of Bahrain’s telecom regulator, Alan Horne, stepped down from his role last month and left the organisation entirely at the end of November. “I set out to build competency into the team to ensure that the Kingdom of Bahrain developed into one of the best and most qualified telecommunications regulators in the Middle East,”
www.digitalproductionme.com
Horne said. “By the end of this year, TRA will have achieved this key objective.” Horne took on the role of general director of Bahrain’s Telecommunications Regulatory Authority (TRA) in November 2006.
QATARI MEDIA GROUP LAUNCHES $200M FILM FUND Fledgling Qatari media group Alnoor Holdings staged its official launch at the Doha Tribeca Film Festival with the announcement of a US $200m film fund. The company intends to finance 15 movies for the international market during a five-year period with the stated aim of generating “the best potential returns involving Hollywood talent”. DECEMBER 2009 011
VOX POP
ONLINE ADVANCES
Internet ad spend has surpassed TV in the UK and Sweden with a number of other Western markets set to follow. Digital Broadcast asks whether the same could happen in the Middle East.
FOUAD BEDRAN Co-managing director of online ad monitoring service, Out-n-out Online Xperts (OOX). I was surprised to see online advertising overtake TV so soon in any market, but when I had a look at the figures for the UK in 2007 the gap had already been closed quite significantly. As far as this region is concerned, anything can happen but in reality, I don’t think online will be able to catch TV anytime soon. Television has been used in the region for decades and the advertisers are very experienced with the medium and there is certainly a strong case in favour of TV advertising. TV also has very strong content. In many cases, there is a lot of investment from government-owned channels in high-quality programme offered on free-to-air channels. The result is that for the cost of a TV and a receiver, you can access hundreds of channels showing top-quality programming. Meanwhile, a mid-range broadband connection will cost in the region of US $55 a month. So the cost of entry for TV is far cheaper. Also, in the UK and Sweden, a much larger share of society is middle to upper class. Th is is far lower in the Middle East with some of the Gulf states being the exception. Online advertising will not be able 012 DECEMBER 2009
to challenge TV until this situation changes for the better. I wouldn’t say there is a shortage of high-quality Arabic websites. There has been an investment in online content already. For example ADMC has launched super. ae, goalarabia.ae and the adtv.ae catch-up service and the online version of Zahrat Al Khaleej, which is the second most popular women’s magazine in the region. Maktoob, Jeeran and MBC have also been boosting their respective online content. The growth of online ad spend has been sparked by the lack of inventory. They need to see a growth of traffic from places like KSA and Egypt. If they can grow the traffic [and page impressions] they can keep the price low, which will allow them to be viewed as cost effective. If traffic goes down, the price will increase to compensate. The prices are quite low at the moment. It is possible to run an entire online campaign with a few hundred dollars if you wish. There has been a steady growth in the number of online campaigns. (see box out, next page). There are several reasons for this. www.digitalproductionme.com
VOX POP
ROOM FOR BOTH NICK GRANDE Managing director, Channel Sculptor.
RAISE VOLUME, RAISE PRICE JAIDEEP MERH Account director, Venture Communications.
www.digitalproductionme.com
ONLINE CAMPAIGNS ON THE UP Despite the recession – or perhaps because of the recession – there has been a marked increase in the number of online advertising campaigns in the Middle East. This growth could be attributed to the medium’s lower costs, its higher accountability or the rise in the volume of quality regional websites available to advertisers to invest in. Either way, the pattern is the same as is being seen in developed markets where online ad spend is surpassing TV for the first time.
2012
Number of online campaigns recorded by OOX in 2008.
2528
Number of online campaigns recorded by OOX in 2009 (until Nov 21).
45% SOURCE: OOX
Online ad rates are much lower than a 20-second spot on any one of the satellite channels, so in terms of spending, it cannot overtake TV. As it is considered a fairly new medium in the Middle East, it is still low priced. It needs to increase its rates to compare itself with the spends on TV but this can only happen if more advertisers come on board for online ads. TV spend would be higher because 90 percent of the households in the Middle East have TV sets compared to an average penetration rate of 34.3 percent for the internet. I suspect it will take time to overtake TV but it can certainly give TV a run for its money, partly because of its
accountability as a media vehicle. Advertisers can quantify its success. In short, it will be considered a serious option, which currently it is not especially in the mass category like soap, shampoo and so on, where TV spend typically represents 70 percent of the budget allocated. A few things need to change. The day the internet becomes widely available and is priced rationally, it [online advertising] will explode. Another issue pertains to language. Web content is largely English, and we know audiences are typically small for any programme or communication in English. In other languages such as Arabic, reach grows exponentially – and that is true of online ads. Advertisers are definitely keen, but it’s still a “nice-tohave” initiative rather than a “must-have” initiative.
DIGITAL ADVERTISING D
Th is change will undoubtedly happen globally, including in the Middle East. Online penetration already exceeds pay-TV penetration in the region, but it’s going to take several more years before online ad spend passes FTA ad spend. The interesting question for me is whether we will actually be able to tell the difference between online and TV media by the time this shift happens. In developed markets, there is a huge move away from linear towards on-demand programming. On-demand usually involves a computer of some kind – even if it’s just a set top box with a hard disk – so the line between TV and online is already blurring. Online penetration is, of course, a big factor, but the biggest factors are inertia. Agencies (and therefore clients) remain
more comfortable with conventional print, outdoor and TV buys. Secondly, the lack of credible market research to effect a change in this status quo is also responsible. Keep in mind that the Middle East is a ‘me too’ o’ market, so changes happen quickly once critical mass is reached. Just look at the explosion of satellite TV stations over the past five years, or the sudden merger mania in the broadcast sector over the past six months. Once a few major household brands go heavily into the online space, the rest of the market will follow. Leaving aside market manipulation by the agencies and sales houses, TV ad spend is ultimately driven by channel viewership. The most important thing any TV channel can do to protect its ratings is to understand and serve its audience. Channel loyalty comes from consistently giving viewers what they actually want, not what you think they want. The growth of online penetration is inevitably going to erode TV viewing hours, and therefore advertising share. Having said this, there is still huge growth potential for TV spot rates and sponsorship compared with international markets. If satellite broadcasters simply concentrate on making their core offering attractive, there should be plenty of upside for everyone.
Projected year-on-year growth in the number of online campaigns from 2008 to 2009. DECEMBER 2009 013
TECH TALK
TAKING STOCK Business news specialist CNBC Arabia is faced with the challenge of combining feeds from nine locations and a tsunami of financial data into 16 hours of live programming every day. Digital Broadcast showcases some of the technology at the Dubai headquarters.
CNBC uses a Barco videowall with Vizrt graphics to display a multitude of data to viewers. The wall is made up of 12 Barco video cubes operated as three four-by-four screens. The tickers are also powered by Vizrt.
LAL NANAYAKKARA Senior broadcast engineer, CNBC Arabia. “Th is is our main facility but we also have bureaux in Abu Dhabi, Riyadh, Jeddah, Cairo, Kuwait City, Doha and London. Each of these has a staff of 10-15 people. “We operate live typically from 9:30 in the morning till after half one the following morning. “We have two studios here. Studio one is the live studio operating for 16 hours a day with just two-minute gaps between programmes. During these gaps, we switch to our Omneon playout servers. “The other studio provides redundancy should we have any problems and can also be used to fi lm longer form programming, that we use when the live show is off air. “We take data from the Thomson Reuters feeds that the news director and the presenter will manipulate for the benefit of the viewer. We have used VIZRT graphics since 2005 and also use their video wall engines. “The production environment is based entirely around Avid and ENPS. “We also take live SNG feeds from other bureaux and have a fibre link to the Dubai International Financial Centre (DIFC) and the bureau in Abu Dhabi. The SNG feeds are co-ordinated by Samacom.”
014 DECEMBER 2009
The main transmission room at CNBC Arabia’s Dubai headquarters. A Quartz Master Control unit takes the central roll. Quartz is now part of Evertz. www.digitalproductionme.com
TECH TALK
The facility has a number of connection to satellites including Asiasat, Arabsat, Eutelsat, Nilesat as well as the UAE fibre links. The Dubai HQ is the central point to tie together the SNG connections from CNBC Arabia’s bureaux.
The facility has a bank of VTRs covering various formats. Hamlet Monitor Scopes are used to track the quality of the ingests. www.digitalproductionme.com
“The entire production workflow is Avid,” says Nanayakkara. This includes MEDIArray and Air Speed modules (pictured).
Above are the ubiquitous professional Tandberg receivers. Tandberg TV will rebrand as Ericsson from January 25, 2010.
Several rack units of graphics engines keep the multiple layers of realtime data tickers and the videowall graphics on air. DECEMBER 2009 015
INTERVIEW
DIGITAL OR BUST
Former Showtime Arabia CEO Peter Einstein tells Digital Broadcast about his journey from pay TV to his new digitisation and content distribution company via a private equity firm and a 24/7 gaming channel. You formed a private equity consultancy after you left Showtime. How has that project developed since launch? Peter Einstein: EMCP is a private equity advisory and investment company specialising in the technology, media and telecoms sector (TMT). In the early days of the company we were building a portfolio of start-ups and early stage investments using our own capital as well as private family wealth funds and other private equity firms. What were the early TMT entities you invested in? PE: During the 2007-2008 period we found it difficult to generate traction for these types of investments because of the frenzy around the real estate sector. Investors in the region were simply looking to make a ‘quick buck’. So we decided to look towards opportunities outside of the region. In 2007 we bought a company called GINX, which is cofunded with several investors mainly from the UK. GINX is a video gaming TV channel and internet portal targeting the ‘casual gamer’. It’s really what I like to call the ‘MTV of video games’. Where is GINX currently distributed? PE: We have distribution deals with various partners. There is a 24/7 GINX TV channel in Asia and we also produce two gaming programmes– Game Face and The GINX Files – for channels like Bravo. We produce video gaming themed content for a number of other channels in Europe and Africa as well. Are there any plans to bring GINX to the
016 DECEMBER 2009
Middle East in one form or another? PE: The company is self sustaining with another round of growth capital being raised to take the business to an even more advanced level and absolutely we’d like to bring it to the region. But like everywhere else we favour partnering with a local company. Video gaming in the MENA region is huge and GINX could easily be customised in Arabic to serve this audience.
We are in negotiations with five or six archives, some are straight digitisation, restoration and archiving for governments to preserve cultural heritage and others are commercial opportunities which will ultimately expand into advertising, sponsorship and distribution. PETER EINSTEIN Chairman and CEO, Eclipse Digital.
What is next for you? PE: The next big project I’m working on is Eclipse Digital. There are three reasons why the company is necessary. Firstly all content from video to works of art will have to be digitised in the next ten years. Much of it is currently stored inadequately and is deteriorating. Much of this material has had limited distribution because of its physical form. Digitisation will make it available everywhere. Thirdly, there is a commercial opportunity to monetise this content that can suddenly be made available all over the world via various distribution platforms. What stage of development is Eclipse Digital in at the present time? PE: Once we have selected our permanent home – in the UAE or Qatar – we will create the facility itself. In the meantime, we will be focusing on closing content deals. We are in negotiations with five or six archives, some are straight digitisation, restoration and archiving for governments to preserve cultural heritage and others are commercial opportunities which will ultimately expand into advertising, sponsorship and distribution revenue.
www.digitalproductionme.com
OPINION
NEW YEAR RESOLUTION The pre-downturn environment was difficult enough, but the leaner, more efficient industry it has created should be in a better position to deal with the challenges of 2010, old and new alike.
A
s the end of 2009 approaches, most TV executives will be glad to draw a line under a torrid 12 months. The question now is whether we go into the New Year with a dull sense of trepidation or with a renewed sense of vigour. Some unfortunate companies will have that decision made for them with previous commitments and a lack of flexibility rendering them unable to adapt to the difficult circumstances. We have already seen this in 2009 and there will be more casualties in 2010. There will also be more success stories. Many pundits have been quick to draw similarities between the effects of a recession on industry and that of a forest fi re – the deadwood is burnt away and the strongest, most resilient remain and can benefit from fertile grounds left behind. Whether this is the exact situation the Middle East media and broadcast industry will find itself in remains to be seen. Ad dollars will aggregate around the most reliable and established entities. Those that remain will more than likely be running at near maximum efficiency and far lower operating costs than 12 months before. The soaring cost of living endured in many Gulf states has levelled-off, giving employers a breather from the annual pay rises needed just to keep staff satisfied, let alone motivated.
018 DECEMBER 2009
REASONS TO BE CHEERFUL
25% The price rise of a 30second ad spot from 2004 to 2009.
270% The rise in the number of FTA channels from 2004 to 2007.
28.1% The growth in the number of FTA channels from 2007 to 2009.
SOURCE: Arab Advisors Group
Th is rrationalisation is happening in other areas of the in industry too. Optimisation of bandwidth usage, a more delibOptim erate technology selection process, more scrutiny te for the b business case behind each new enterprise, all in all a more mature, sustainable industry should eemerge. We have seen the brakes put on DVB-H rollouts, pay TV operators have allied, even state sta broadcasters have looked to cut costs and trim back their – often unwieldy – operations. Online-based revenue opportunities are being Onlin exploited with increasing frequency. Advertisers exploite are bein being offered a growing number of quality Arabic websites to sink their budgets into and investment in new media content creation is only going to encourage this further. Th is does not mean 2010 is going to be rosy. The external conditions are unlikely to be that different from 2009, however most companies should now be in a far superior position to deal with them than the same time last year when the recession snuck up on the region. In the meantime, the same old threats to revenue remain. The economic downturn does little to discourage fi le sharers or diminish the popularity of competing forms of media entertainment – legal and otherwise. The next challenge is to combat the same conditions that were choking the industry before the recession, against today’s bleak economic backdrop.
www.digitalproductionme.com
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COVER STORY
020 DECEMBER 2009
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COVER STORY
SHIFTING SANDS Building a media industry requires more than a real estate development. Digital Broadcast explores Saudi Arabia’s King Abdullah Economic City’s (KAEC) upcoming media precinct, which could dramatically shift the powerbase of the Middle East media industry.
F
or many, Saudi Arabia may seem like a strange choice as the location for a new media production hub. International media coverage frequently (and misleadingly) portrays the Kingdom as a vacuum for the media and entertainment industries. In truth, the country has lead the way in the development of some new media platforms, it houses the largest number of pay TV subscribers, broadband subscribers and all the signs suggest that a ban on cinemas is likely to be lifted in the near future. “Th ree of the top five TV media organisations are Saudi owned, MBC, ART and Rotana,” says Matthieu De Clercq, project manager, A.T. Kearney, the consultancy working closely with the Saudi Arabian government on KAEC. “They only need the environment to be correct for them. Regulation is one element, and lifestyle. If those conditions are correct then those major Saudiowned organisations will come to the Media City at KAEC. Whether they move all of their operations or only a portion, is up to them. The important thing is that the key Saudi players will come back to the Kingdom and that will change the dynamic of the region.” The theme of creating a set of conditions under which the media can operate is a recurring one. www.digitalproductionme.com
KSA has made some very strong moves towards becoming a more business friendly environment. It is a long-term play. Look at where Dubai was 20 years ago and where it is now, it just shows that with the right people driving change in the right direction and the necessary infrastructure in place, anything is possible. CHRISTOPHE FIRTH Strategy consultant, A.T. Kearney
DECEMBER 2009 021
COVER STORY
King Abdullah Bin Abdul Aziz of Saudi Arabia (centre) and Syrian President Bashar al-Assad (front right) at the launch of the King Abdullah University of Science and Technology in September of this year.
It is clear that the appetite for media in Saudi is as healthy as elsewhere in the region. The pan-regional pay TV operators see significant portions of their subscriber bases in Saudi Arabia. According to Pyramid Research the country’s communications market is worth US $9.9 billion in service revenue. The country represents around 68 percent of the GCC’s total population. “On a regional level it is agreed that media’s contribution to the economy could be greater. The media sector is experiencing immense growth and the biggest market is Saudi Arabia, the key players are all Saudi. Despite this they all work from outside the Kingdom in order to serve it. So, the concept of the precinct is in part to bring back these Saudi-owned, Saudi-designed operations, which makes a lot of sense,” says De Clercq. When asked directly about the prospect of moving to KAEC, MBC COO and general manager Sam Barnett reveals that the network has already had discussions with KAEC. “We agreed that we would begin with a branch office out there,” says Barnett. “We are producing a lot of Saudi drama and comedy in Jeddah and we will see how things develop there. It would be quite easy to move that kind of production from their present locations into KAEC. “Certainly in terms of the support they are offering, it could prove to be quite an attractive way 022 DECEMBER 2009
MEDIATROPOLIS The number of operational media cities in the Middle East currently stands at eight with a further six either proposed or under construction.
OPERATIONAL Dubai International Media Production Zone Dubai Media City Dubai Studio City Fujairah Creative City Ras AlKhaimah Media City Twofour54 (Abu Dhabi) (All UAE) Jordan Media City Egyptian Media Production City
PROPOSED* Bahrain Lebanon (Beirut Media City) Kuwait Qatar Sudan
UNDER CONSTRUCTION KAEC – Media City *According to Arab Advisors 2009
for us to develop our production infrastructure in Saudi Arabia.” So what is it that has prevented these companies from returning to their domestic market in the past? MBC was originally based in London, when it relocated to the Middle East, it did so to Dubai. Orbit was originally based in Rome and chose Bahrain as the destination for its Middle East headquarters when it returned to the region. “It is clear that the main challenge relates to policy,” explains De Clercq. “At present, foreignowned media entities are simply not allowed to have a license in KSA. The domestic media are highly regulated by the MOCI with a written law that dates from the 1960s and 1970s. Th is is not up to date with modern content or technology, which creates a lot of grey areas. For example, should certain forms of broadcasting be considered as IT activities or media operations? These grey areas are a barrier to the growth of the media in KSA.” So is the answer to strip away the existing regulatory framework entirely? What will be deemed acceptable in one of the region’s more conservative societies and will it be enough to permit a healthy media industry? “Countries such as China and Singapore have a similar level of freedom of speech as you find in KSA, however, with the right legislation clearly www.digitalproductionme.com
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COVER STORY
“Online media is a bit of a paradox,” says A.T.Kearney’s Christophe Firth. “It is seen as the future growth driver in this region and certainly in Western markets. It will take ad revenue and viewership away from traditional media as well as acting as a platform for future growth. On the other hand, it is also by far the hardest medium to regulate. In this region it is necessary to think how to put out regulation for online content and infrastructure that can promote internetbased media, but respect cultural and societal factors in this region.” As broadband penetration improves throughout the region, the immediate benefits for establishing such a system are obvious, as De Clercq points out. “Fifty percent of the population is under 25, connectivity is high, the internet is very open, applications like Facebook and Twitter are flourishing. We shouldn’t underestimate the will of those people to respect their identity but also to replicate the standards that they see in other parts of the world or what they see in other countries in the GCC.”
INTERNET REGULATION
TAMING THE WEB
Jamal al Sharif, executive director of Dubai Studio City. The facility includes sound stages and other infrastructure to lure tenants to the precinct.
“People tend to focus on the 10 percent of the stating what you can and can not do, they are able media that is controversial in the country. Yes to support very strong digital media industries,” says De Clercq. “The key for KSA is not to try to be- there are certain things that you will never be come another Dubai or replicate standards seen in able to do in KSA, but many of these are already catered for in Dubai or Jordan and other locations. Europe or the US. It should continue to respect its Everything from newspapers to books to own culture and identity whilst encouraginternet to video games can be done ing the media. Th is means defi ning on in an environment as open as other paper the kind of media industry that locations in the region and at the you want to develop – sports, family Percentage of same level as any country that has entertainment, business news – and Saudi Nationals created the right environment,” says define the boundaries that they must under the age De Clercq. operate within, then you will see some of 25. “The bad news is that there is a comactivity among those areas.” plex regulatory system needed, which is not Stories in the international press often in place yet. Once these regulations are reformed draw attention to restrictions on certain elements KSA will be able to dramatically increase its atwithin the media, with the actions of a Saudi tractiveness as a location for the media industry,” journalist on LBC recently grabbing headlines claims De Clercq. worldwide.
57%
Christophe Firth, strategy consultant, A.T. Kearney.
024 DECEMBER 2009
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COVER STORY
“Any operator that is not already in Saudi Arabia is not there for a specific reason and it is most likely that this reason is regulation,� he continues. “The last thing an investor wants to do is invest believing that they are within the scope of the regulations, only to discover once they commence that they are not and are shut down. It is better if everything is in writing and approved and then no one can shut you down. I don’t think we are talking about a daunting 600 page piece of regulation. In Singapore they have a 20 page media code. The crucial thing is what is written, not how much. It Total area of KAEC must be sufficiently detailed to give companies the confidence to know what they can and cannot do.� Aside from the regulatory situation, there is also the issue of doing business in the Kingdom. Many companies view Dubai and Doha as the automatic choice to base a regional branch office, often without considering any of the alternatives. They may be surprised to know that Saudi Arabia is actually the easiest place in the MENA region to KAEC will cover an area similar to that of Washington DC once completed. Developer Emaar is attached to the site for 25 years.
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COVER STORY
Whether they move all of their operations or only a portion, is up to them. The important thing is that the key Saudi players will come back to the Kingdom and that will change the dynamic of the region. MATTHIEU DE CLERCQ Project manager, A.T. Kearney.
to kick start its development however, rather than do business, according to a recent report. as a permanent, long-term instrument to ensure “KSA has made some very strong moves tenants remain. towards becoming a more business friendly “When you build a new city – literally out of environment. The latest World Bank Ease of Doing the desert – and you want to attract a new media Business index ranked KSA 13th globally, which industry, or any other sector for that matter, there is way ahead of anyone else in the region,” says Christophe Firth, strategy consultant at A.T. Kear- needs to be some incentives just to get it started. Investors will realise very quickly that the proposiney. “It is a long-term play. Look at where Dubai tion is good and once this happens the incentives was 20 years ago and where it is now, it just shows can dissipate naturally,” explains Firth. that with the right people driving change in the “The advantage of building from scratch is that right direction and the necessary infrastructure in you start with a clean slate in terms of infrastrucplace, anything is possible. ture. Th is means we do not have to contend with “KSA has another huge advantage in the size of legacy copper wire networks, for example. its domestic market, ” he adds. “In terms of transport infrastructure there is a A key component of Dubai’s strategy in the new national train network on the way connectmedia sector and others, is the development of ing Jeddah through to Damman, airport links freezones with business friendly regulations are already good nationally, when you and incentives. put this all together you start to get “The term ‘Freezone’ is a bit of a very attractive proposition,” aca buzzword,” says De Clercq. “A cording to Firth. freezone in Abu Dhabi does not The long-term aim of the develautomatically replicate the same opment is not to snatch existing conditions as one in the next terjobs from other parts of the region ritory. If you are talking about the Total area of KAEC or to attract expats, says De Clercq. idea of a location that is business media city “One important comment to make friendly, where regulations are more development on the goal of these initiatives it is not business orientated and where incenonly to bring expatriates to work in the tives are available, be it in the form of real specific industry it is also about bringing the local estate or financial help to encourage growth, then talent into the industry. KSA has a, young, strong yes, in that sense, KAEC a freezone.” pool of talent seeking employment. I expect the The support that will be offered to businesses media sector to find its own identity in the region that set up in the KAEC media city are intended
800 thousand sq/m
MEDIA CITY “MUST HAVES” Dubai Media City has been running at capacity for several years now.
026 DECEMBER 2009
SOURCE: A.T. Kearney
THE EIGHT KEY COMPONENTS FOR THE DEVELOPMENT OF A MEDIA CITY T Domestic Market For a steady source of media consumers and a potential audience for advertisers.
Access to financing Public subsidies, sturdy financial system, venture funds and the legal framework to support these.
Proximity to clients Media buyers, PR agencies and advertising firms must be close at hand.
Local talent pool Both foreign and local talent availability plus the intention to train the local population in the skills necessary for a career in the media industry.
Infrastructure Transportation and media specific facilities must be in place.
Costs From raw materials to broadband prices.
Incentive and ease of business Fast and easy visa, registration and licensing procedures, a competitive system of tax and duties and a structured body to settle commercial disputes.
Regulatory environment and lifestyle Identified regulators, simple and explicit censorship rules, transparent licensing, audience measurement and intellectual property rights protection rules.
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COVER STORY
as it continues to develop its own content. We have seen some success in the GCC already. Shows like Freej and Tash Ma Tash, are just some examples of what the Middle East production industry will become as it develops its own talent and grows less dependent on At the foreign content. It is more moment, Egyptian natural for this creation actors are being to happen for the reasked to speak with Saudi gion, in the region.� Arabian accents on sets in De Clercq gives Egypt designed to look like the the example of Saudi Kingdom. It would be cheaper, productions fi lmed easier and better for the Saudi in Egypt with Egypeconomy to do this on tian actors, using sets home soil with Saudi designed to look like the actors. Saudi Arabia. “At the moment, Egyptian actors are being asked to speak with Saudi Arabian accents on sets in Egypt designed to look like the Kingdom. It would be cheaper, easier and better for the Saudi economy to do this on home soil with Saudi actors,� he claims. Egypt currently hosts a number of shoots designed to recreate Saudi Arabia. KAEC’s media city could see some of these return to the Gulf.
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DECEMBER 2009 027
EXCLUSIVE: MBC
BUCKING THE TREND
Channel launches, large-scale marketing activities and no across-the-board job losses. MBC COO and general manager, Sam Barnett tells John Parnell how the FTA giant has fought off the downturn.
M
BC may not have any shareholders to appease during the downturn but it does have to satisfy 106 million viewers everyday. The free-to-air TV network has nine TV channels broadcasting across the Middle East as well as a number of radio stations and websites covering a range of genres from the adrenaline-fuelled MBC Action to its children’s channel MBC 3 and the Al Arabiya 24-hour news channel. With a reliance on advertising revenue and as the largest FTA network in the region, all eyes are on MBC as a barometer for the industry at large. As the probable (harsh) reality of 2009 came clear, the network’s COO and general manager, Sam Barnett launched a two-pronged attack to protect the company’s advertising revenue. “The first decision we made was that we absolutely could not allow ratings to drop,” says Barnett. “We cannot give advertisers any reason to reduce their budgets for MBC. We are realistic enough to recognise that overall advertising budgets will be reduced but as the market leader, our larger channels are the least risky option for advertisers looking to recover their investment. “We are not going to compromise; investment in programming will continue and we will make sure we are disciplined on the ratings.” Rather than relying on advertisers to check the latest ratings figures themselves, Barnett has encouraged the company to actively pursue advertisers with case studies and data supporting the network’s case. “You have to get close to your advertisers,” says Barnett. “We have a good relationship with our media agents, the media buyers and our advertisers. But in my opinion, we now have to try to take this 028 DECEMBER 2009
MBC PORTFOLIO The MBC Group has expanded its activities in recent years on various platforms.
TV MBC 1 MBC 2 MBC 3 MBC 4 MBC Action MBC Max MBC Persia MBC+ (pay channel) Al Arabiya
RADIO MBC FM Hala FM (MVNO in Oman) Panorama FM
OTHERS
further by pushing initiatives like branded content and approaching advertisers about these and other initiatives. For example MBC 1’s morning show, Sabah Al Khair Ya Arab, Galaxy was approached to take the sponsorship of the poetry segment, which proved successful and the agency won an award for the campaign. “The idea is to get advertisers engaged in the programme. This creates hooks rather than just a regular 30 second ad spot that they can place with MBC one week and somewhere else the next.” “The push on branded content, product placement and movie sponsorship has grown over the last three years but going into budget year 2009, we decided to do this in a much more aggressive way.” Barnett gives another example of this on the children’s channel MBC 3. An advertiser’s website address was given during a show and the resultant spike in the company’s online traffic persuaded them to take a sponsorship deal on the channel. “Children’s TV is a more difficult sell than movies, Gulf drama or comedy. The market in the Middle East is not huge and there is a longstanding belief that kids TV wasn’t worth advertising on. We have taken an aggressive commercial stance and approached the market with a proven case study showing that mothers are watching kids TV as well.” MBC may be the market leader but it has by no means presumed
Haya MBC (Print) MoBC (mobile services) Alarabiya.net MBC.net www.digitalproductionme.com
EXCLUSIVE: MBC
www.digitalproductionme.com
DECEMBER 2009 029
EXCLUSIVE: MBC
106 million Average daily audience across all MBC TV channels.
The idea is to get advertisers engaged in the programme, this creates hooks rather than just a regular 30-second ad spot that they can place with MBC one week and somewhere else, the next. SAM BARNETT COO and general manager, MBC. 030 DECEMBER 2009
that it could sail through the recession picking up advertising budgets that have been pulled away from other channels. Neither has there been any need for wholesale redundancies or the jettisoning of any of the company’s other operations. In fact, Barnett reveals that the company has sought to protect its revenues during the recession by increasing spending in certain key areas. “We have spent even more on research this year and the speed with which we are reacting has gone up. If programmes are not working, they get changed. If things are working, we expand them. We are also conducting more experiments.” One such experiment was the introduction of a second audio channel on MBC Max offering Arabic dubbing as an alternative to subtitles. “We had a hunch that this would work, we tested it in the market and now we are pushing it out. Gulf comedy, is another example, it seems to be working so we’ll do more of it. So we are making decisions more quickly and pushing them to their logical conclusions.” In addition to the Arabic dubbing and the Gulf comedy, MBC has also continued to push content onto its online video portal, Shahed Online. Despite this, Barnett is under no illusions about the company’s role in the development of platforms. “What we have done with the new media products over the last three to four years is experiment with a variety of different platforms and follow the market. We don’t want to make investments in technology platforms, that’s a mug’s game,” claims Barnett. “We will let others invest in the technology. When it works, we will ensure we make our content available on that platform. It seemed to us that video on demand (VOD) was something that people wanted and it does seem to be working. Shahed Online generated 3.8 million viewers this past Ramadan.” The shift from TV to new media platforms such as internet TV and mobile TV has been held up in the region compared to other markets, however they are now beginning to find some traction locally. Despite the new sources of revenue that they can offer, Barnett is confident that more traditional TV will continue to play the lead role. “Our take on the shift from TV to new media is that it is important to monitor, but it is TV advertising which is the dominant force and it is likely to remain so for a long time. “It is still traditional TV that is the focus. We won’t be sucked into putting our money into the
platforms. We will invest in content that people want to watch. Currently, they want it on TV, but we’ll make it available on other platforms as and when the viewers shift to them,” says Barnett, dismissing any notion of panic in the company’s regular TV business. “It’s not a case of suddenly saying ‘there is a recession on, TV advertising is down. Let’s get out of TV and do something else instead’. That would be a mistake.” The company hasn’t come through the past 12 months completely unscathed. Barnett believes that these changes are the result of good business sense, rather than a consequence of the recession. “Some business units that were not productive or were losing money have been cut, but these are business decisions made on an ongoing basis. The recession facilitates this because it puts underperformers into focus whereas at other times, they can be more difficult to spot.” The situation at MBC remains healthy, assures Barnett, who is confident the company will emerge from the recession in better shape than it entered. “We’ve had seven years of consecutive growth [prior to the downturn]. The result has been that we have not had to change our cost base in a radical way. We told staff it was going to be a tough year and we asked people to look for savings and to tighten their belts. This has allowed us to continue to invest in content. We have an efficient machine. It works well, we’re commercial, we’re profitable, we’re cash-flow positive and we get the ratings.”
MBC now offers content for radio, TV, print, online and for mobile phones. www.digitalproductionme.com
AUTOMATION
AUTOMATION FOR THE PEOPLE
A small, centralised approach to automation can offer broadcasters an increased degree of flexibility and ease the path for future expansion in a changeable market, writes Rob Leishman, as broadcast engineers look to take on a future with moving targets.
W
ith the switchover to digital transmission the new range of television and set top boxes (STB) rely on a lot of specialised computing and software technology, the only thing different from a PC architecture is the keyboard and mouse are replaced by a remote control. The future generation of viewers will treat the television screen as a display for multiple information sources as they do at present with their PC. Broadcasters need to ensure that the television channel being dis-
played as an application holds the viewers attention. They will have to use the large volumes of multi-format content they will handle in a sophisticated way. To ensure that the viewer’s attention is captured and maintained conventional broadcast material will require a level of interaction or perhaps be offered in HD, providing additional value to the advertisers and sponsors. By failing to evolve, broadcasters will lose out to competitors that address these demands and offer a more compel-
ABIT
COMPACT IS KEY Playout specialist Abit offers a cost effective automation platform capable of supporting three transmission channels. “Customers wanted an option to take advantage of the wide range of functionality and expertise Abit has developed, but without the need to control a large number of devices in a multi-channel architecture,” explains Richard Thomas, software development director, Abit. “Our solu032 DECEMBER 2009
tion gives them access to the full power of the application software in a much smaller non-redundant platform. “The main benefit of this approach is that Abit will continue to develop and maintain a single source of software configured to run on its existing systems, which allows customers for the new compact system to take advantage of future product enhancements.” www.digitalproductionme.com
AUTOMATION
OMNIBUS
THE IT STANDARDS APPROACH The iTX software based transmission and production tool by Omnibus includes automation with a host of plug-ins available to expand the feature set. These include the addition of graphics, logos, vision effects, voiceover, live events and audio effects, claims the developer. An integrated character generator allows the operator to create CGs or load and modify templated material. The system also supports open and closed subtitles and multiple audio tracks, according to Omnibus. In addition to these features a drag and drop function simplifies the process transmission enabling a single operator to work on multiple channels if desired. The iTX system uses only standard IT hardware.
ling experience for viewers and advertisers alike. For some small, start-ups or emerging broadcasters, accommodating these likely demands may seem like a daunting prospect. They need to match plans for growth with scalable, futureproof technology for the successful development of their station. However, the good news is – from an automation point of view – that bigger is not always a better way to manage these multiple technology challenges. The key point when selecting any automation system is to choose one where the underlying design comes from a top-down approach. Th is means it is possible to confi gure and easily change workflow and there is the ability to logically link any type of device at a conceptual level. In other words, the system incorporates a range of templates to allow the addition of any new device like a server, mixer or router for example, at anytime. Tight real-time integration of a particular brand of device is incorporated in software modules that operate in real time, close to the external communication link. A base design that encompasses top-down development techniques will therefore, work with www.digitalproductionme.com
any other device regardless of whether that is a media management, storage or archiving system for example. Each type of device is represented by a standard framework or ‘Logical Device Template’ with its own unique data structure allowing the characteristics of the device to be stored, ensuring the top-down arrangement is essentially future-proof. Logical templates are assigned to each physical device and any upgrade to the template is automatically reflected down to the applications it interfaces with, making any necessary changes to peripheral equipment a simple process. The logical device templates are configured into the required workflow and maintain information flow with a heavily optimised database providing real time information and control. The Protocol Device for communicating with each specific brand of device is maintained separately and operates at or close to the external physical connection. Integration is simplified as no control logic is included at this level and as a result, the system can manage and control any current system or one that is yet to be created. This set up also ensures that commands such
Accommodating [HD and interactivity] may seem like a daunting prospect. They need to match plans for growth with scalable, futureproof technology for the... development of their station. ROB LEISHMAN Marketing manager, Abit. DECEMBER 2009 033
AUTOMATION
Software-based automation has allowed broadcasters to adopt a scalable approach that can keep pace with their growth and the changing requirements demanded by the industry and audiences alike.
OASYS (formerly On Air Systems)
NEAT AND TIDY The full OASYS software workflow is based on standard PCs, meaning it can be commissioned in days and requires minimal training and maintenance. According to the manufacturer, the Player module offers a number of features as standard that mark it out among rival automated software-based playout systems. These include “on the fl y” schedule creation and timeunlimited advance scheduling, trim, edit and transition effects, and a number of configurable error and alert options. As expected Player is compatible with third-party systems including routers, MXF, storage and editing systems.
034 DECEMBER 2009
as; ‘play a particular movie’ for example, are received at the device level, ready to be triggered on the frame boundary. To operate frame accurately in accordance with the broadcast schedule, the command either needs to include time stamping or, if there is latency, be transmitted to arrive at the device activating the required action a predefined number of frames beforehand. To achieve overall frame accurate broadcasts, the communication to all of the devices needs to be synchronised and to utilise a centralised architecture with a real time operating system. This allows each interface to operate in accordance with the high-level control algorithms rather than trying to get devices to work together by changing the timing of control signals to one device to work specifically with another device. A centralised architecture provides single control reference to ensure that all facets of a multi-channel environment can be synchronised. The control reference must not only use a recognised time source to synchronise events but also ensures that any off set required to cater for the characteristics of each individual device attached is still relative to the control reference. The combination of high bandwidth and guaranteed low latency ensures that frame accuracy is provided consistently and independent of any changes in the characteristics of the broadcast environment itself. In the past, large computer systems were required utilising a real time operating system (RTOS) such as OS9 to provide sufficient processing power and memory to accommodate the software needed to control a multi-channel system.
Nowadays, new and faster CPU processor boards are available. These can be linked with additional processor boards acting as communication servers using an internal bus, which provides high bandwidth and guaranteed low latency for interprocessor communication. Configured like this in a centralised architecture, the computer system no longer needs to be large. A typical small centralised architecture would find the integrated broadcast automation software running on a master control processor while the communication servers communicate over LAN, Serial and GPI signals controlling the peripheral equipment over physical connections The centralisation of all system resources such as recording, playout and duplication along with the immediate availability of associated metadata and state information allows a high level of automation to be achieved in a multi-channel broadcast environment. In the future, the viewer will have the tools to set the agenda and request media from the broadcaster acting as a giant media server. The centralised automation system is well positioned to service the existing business model providing scheduled playout and the future business model by becoming a gateway to the media server. Increasingly compact automation systems are now available but with differing levels of functionality. In a centralised approach the software is easy to confi gure and support providing a flexible yet highly scalable solution to the demands of current and future automation, proving that bigger is not always better when it comes to broadcast automation. Rob Leishman is marketing manager at Abit. www.digitalproductionme.com
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BOXING CLEVER
From simple DVR capability to interactive ad serving there are several new revenue opportunities for broadcasters fed through the set top box (STB). Digital Broadcast looks at the hardware’s growing role.
F
rom the perspective of the viewer, the set top box (STB) sits at the heart of TV and telco convergence. Audiences are more concerned with services than the technology that enables them. In the recent past the volume of these services has dramatically increased and the STB has assumed a number of additional roles during this time. Originally just a receiver and tuner, the role of the STB has evolved so that it is now an integral component of any digital TV service. As IPTV rollouts continue and satellite pay TV offerings continue to push VOD services, more questions are raised about the way Middle East audiences will react to their widespread adoption. “A study has found that 54 percent of DVR users would rather not watch adverts,” says George 036 DECEMBER 2009
There has been a dramatic shift in how people view content. Consumers want a complete entertainment experience and the STB has had to evolve to deliver these new services. FREDERIC MAIZERET Group account director, telecoms and retail, Pace.
Dabaghi, regional director, Motorola. “However, if you can offer some kind of incentive – a voucher for a pizza or discounted VOD content – then there is a good chance that this figure would be more like 24 percent.” “At the moment most of the IPTV services in the Middle East are ‘plain vanilla’, simply delivering the FTA channels in IP to end users. What operators need to do is begin trialling the technology – which is already in place – in partnership with the advertisers.” Increasing use of the STB in this way also creates new opportunities for operators to combat the threat from illegal online content sources with ad funded (or subsidised) services like those suggested by Dabaghi. “Content creators need to take their head out of www.digitalproductionme.com
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DOUBLE STANDARDS
AMINO HARNESSES POWER OF THE ATOM Set top box developer Amino demonstrated its new range of hardware powered by the Intel Atom Processor CE4100 at the Intel Developers Forum. The media processor combines leading-edge consumer electronics features for HD video support, home theatre quality audio and 3D graphics, according to Amino. “The CE4100 is a powerful media processor that is designed specifically for home entertainment and enables a greatly enhanced consumer experience,”
claims Dominique Le Foll, CTO, Amino. “As one of the first IPTV solutions providers to demonstrate its capabilities, we are very encouraged by the response from customers and partners particularly to its over the top capabilities. “This builds on our relationship with Intel and we are delighted to have worked closely with them to showcase the benefits that CE4100 can bring to the performance of STBs in the IPTV world,” added Le Foll.
MOTOROLA SUPPLIES DU WITH VIP SERIES BOXES Motorola has supplied du with two models from its VIP range of IPTV STBs. The VIP1200E and VIP1216E can support both HD and SD, DVR capability with client scheduling, media sharing and music on their TV. “Consumer trends show an appetite for personalised media experiences. Key features of Motorola’s
latest set-tops enable du’s customers to enjoy customised viewing experiences, such as recording and playing back high-definition IP-based video content,” said Ali Amer, vice president, Middle East, Africa and Pakistan, Motorola Home & Networks Mobility. Du is estimated to have between 70,000-100,000 IPTV subscribers in Dubai
the sand and start thinking of innovative ways to add value for the consumer,” says Jeremy Foster, marketing director, Ericsson Middle East. “The Spotify music service is the classic example of how some people will tolerate ads if they can stream music for free, At the same time though, Spotify recognises that some people would rather pay to avoid advertising and they are catered for too with a subscription based, ad-free service. “Flexibility in payment options is the answer. IPTV allows for this, it can create a unique experience for each individual. IPTV gives far greater insight to what users are interested in and offers enormous benefits to advertisers but there is a lot of discussion and there could be some pain required to find the best way to approach this change in the business model,” claims Foster.
While operators and advertisers in this region stall their use of the full capabilities of modern STBs, globally consumers are becoming more aware of what the market can offer. “There has been a dramatic shift in how people view content,” says Frederic Maizeret, group account director, telecoms and retail, Pace. “Consumers want a complete entertainment experience and the STB has had to evolve to deliver these new services and meet consumers’ expectations. The public are defi nitely becoming much more aware of the different technologies available to them.” Maizeret believes that hybrid capabilities have become a must have function as broadcasters continue to make more content available online.
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OPEN OR CLOSED? A report by Arthur D. Little on the case for open standards in IPTV STBs makes some compelling arguments for consumers, operators and the device manufacturers themselves. The report cites the differing fortunes of the open cellular network standard GSM versus the proprietary CDMA standard. According to figures quoted in the report, GSM had an 89 percent global market share in mid-2009 compared to nine percent for CDMA. The study notes that while the STB manufacturers would “benefit from open standards through boosted volume sales and greater ability to exploit direct retail channels”. However, the report also notes that open standards would make it hard for them to “lock in” operators as customers. An open standard environment would also increase price competition and so lower profit margins. Operators and consumers would feel the benefit of these reduced costs and increased choice. The ease of transfer from one operator to another is increased by open standards, which could lead to higher churn rates.
DECEMBER 2009 037
PRODUCT FOCUS
“We are adding the technology of IPTV and adding social networking applications, for example, as you watch you see your ‘buddy list’ and who is viewing what,” says Bilal Saleh, director EMEA apps. and mob TV services, Motorola (below). “Then you can synchronise what you are watching and send messages to each other.”
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TV CHAT APPLICATIONS
SOCIAL TV
“The Le Cube box we developed for Canal+ (main picture, page36) is France is a great example of this. It’s one of the world’s fi rst hybrid satellite and IP HD PVR devices which uses the Ethernet port for VOD. And in Dubai, for example, enabling access to IP services is crucial as there’s an increasing number of DTH providers.” With the increasing merging of delivery platforms and consumers looking to view this material on a number of device,s the STB is spreading its wings beyond the TV set. “There’s defi nitely a need for media storage in the home, and the STB will sit at the heart of this, becoming even more intelligent than it is today. We’re seeing a lot of demand for home content solutions where the set-top box and the gateway work closely together, and we’re working on delivering content around the home, both wired and wirelessly,” says Maizaeret.
PACE: PUSHING HYBRID MODEL Deployed by Modern Times Group’s Viasat Broadcasting in late 2009, the TDS855NV is a HD PVR with built-in hybrid functionality. Supporting both MPEG-2 and H.264 content, the TDS855NV HD PVR has 320GB storage capacity and allows users to record up to 80 hours of HD or 160 hours of standard definition content. The set-top box has dual DVB-S2 tuners so the user can record and watch content in a combination of different ways to maximise the time they spend viewing television. As a hybrid box, the TDS855NV comes equipped with an ethernet connector which allows IP content to be delivered over low-bandwidth connections using NDS’ Progressive Delivery (PDL) technology, which removes buffering problems associated with slow broadband download speeds, according to Pace.
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DATA
150
SERVICES: CHANGE IN CONCENTRATION (PERCENT OF REVENUE)
120 90 60
Bro adc ast Ent . vi deo
30
-30
Con ten td ist. Ent . ne tw or k Int . ba ckb on e Int l. v oic e Mo b. b ack
0
DATA
SOURCE: World Teleport Association
TELEPORTS ON TOP M Global teleport rankings revealed as local players make top 20 and growing diversity of services uncovered. iddle East teleport facilities Jordan Media City (JMC) and du’s Samacom are among the top 20 highest earning independent operators, according to the World Teleport Association’s (WTA) Top Teleport Operators of 2009 study. The WTA also released its Inside the top operators report, which has shown a diversification in the services offered by teleports and a geographical swing away from North America and Asia towards Africa, Europe and the Middle East. Samacom was named the twelfth largest grossing independent operator with JMC nineteenth, which was also named the sixth fastest growing teleport globally. The Amman-based facility experienced a growth of 50.62 percent, according to the figures from WTA. A number of other operators serving the Middle East also fared well. Cyprus-based Europe Media Port, which has coverage C-band coverage across the Middle East was named the fastest growing teleport in the world (by revenue). Luxembourg’s SES was crowned the number one operator globally. SES is a partner in Abu Dhabi’s YahLive satellite operator. Stratos Global, in the US, was named the top independent teleport.
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TOP INDEPENDENT TELEPORT OPERATORS
1 2 3 4 5
Stratos Global (USA) GlobeCast (France) Arqiva Satellite & Media (UK) Telespazio (Italy) CapRock Communications (USA)
12 du (UAE) 19 Jordan Media City (Jordan) SOURCE: World Teleport Association
Diversification of services is on the up among the world’s teleport operators with non-broadcast based content distribution leading the way. The range of services offered by teleports has expanded dramatically during the last three years, according to a report released last month by the WTA. The number of teleports receiving 25 percent or more of their revenues from non-broadcast based content distribution has seen risen by 143 percent. There has also been a swing towards supplying enterprise networks (up 54 percent) and internet backbone (up 29 percent). Europe and the Middle East has emerged as the largest geographic market for teleport operators. Two thirds of those surveyed expected to retrieve at least a quarter of their revenues from these regions and 47 percent expected to see at least half of their revenues generated in Europe and the Middle East. During the course of the next three years Africa will under go the greatest increase in importance to operators with a 14 percent rise in the number of teleports taking a quarter of their business from the continent. By comparison, Europe and Middle East will rise by only two percent and North America will decrease by 18 percent.
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