TV Middle East & Africa MIPTV 2012

MEA_412_COVER _FOR_1008_COVER 3/12/12 1:59 PM Page 2

Pay-TV Channels OSN Network’s David Butorac www.tvmea.ws

MIPTV EDITION THE MAGAZINE OF MIDDLE EASTERN & AFRICAN TV

APRIL 2012

WS_0412_BRIGHTCOVE SPREAD_Layout 1 3/12/12 5:48 PM Page 1

WS_0412_BRIGHTCOVE SPREAD_Layout 1 3/12/12 5:48 PM Page 2

ASIA_0412_MONDO TV_Layout 1 3/5/12 1:51 PM Page 1

AFRICA_412_UPFRONT_EUR_1006_ELLENDER 3/15/12 10:24 AM Page 2

TV MIDDLE EAST & AFRICA

FremantleMedia Enterprises www.fmescreenings.com • The Wedding Band • Hidden • Anthony Bourdain: The Layover

IN THIS ISSUE

Hidden

Channeling Arabia Major international channel brands are stepping up their efforts in the Middle East 6

Business has been increasing in the Middle East and Africa for FremantleMedia Enterprises (FME). “In recent years, these regions have proven to be tremendous growth areas for FME, so much so that last year we even opened our first Middle Eastern office, in Dubai, to help facilitate the continuing [expansion] in our business,” says Jamie Lynn, the senior VP of distribution for the Middle East, Southern Europe and Africa at FME. He adds, “In Africa it has been equally exciting, and we anticipate growth in the more established markets while expanding our business in the developing sub-Saharan markets.”

The company is offering up its brand-new drama The Wedding Band, as well as the series Hidden.Anthony Bourdain returns in his new series Anthony Bourdain: The Layover, which features the renowned chef exploring an unexpected destination in less than 48 hours.

Interview OSN Network’s David Butorac

12

Ricardo Seguin Guise

Publisher

Anna Carugati

Editor

Mansha Daswani

“We are continuing our

history of bringing some top hit content to the market and will continue to do just that.

”

—Jamie Lynn

Executive Editor Kristin Brzoznowski

Managing Editor

Marissa Graziadio

Editorial Assistant Simon Weaver

Online Director Meredith Miller Lauren Uda

Production & Design Directors Phyllis Q. Busell

Art Director

Televisa Internacional

Cesar Suero

Sales & Marketing Director

www.televisainternacional.tv

Terry Acunzo

Business Affairs Manager

• Abyss of Passion • CQ • Little Giants

For MIPTV, Televisa Internacional is highlighting telenovelas in English, French and Portuguese for broadcast in Africa.The novela Abyss of Passion is a story about four friends whose destinies and happiness are seriously damaged by resentment, ambition and betrayal. Little Giants is a family-friendly reality competition series.The light-entertainment format features eight teams of children aged 4 to 12 showing off their talent in singing, dancing, acting and stand-up comedy. Also on offer is the original series CQ, which Televisa co-produced with Cartoon Network Latin America. It is a live-action comedy series about eight teenagers who attend a unique high school, experiencing life’s challenges and adventures together.

Televisa is working on co-productions with Turner, Nickelodeon, Record TV in Brazil, MTV, Lionsgate and Sony, according to Mario Castro, the company’s director of new businesses.

Vanessa Brand

Sales & Marketing Assistant

Ricardo Seguin Guise

President

Anna Carugati

CQ

“ MIPTV is a very

important market that will have a great impact on [our] sales for the year.

”

—Mario Castro

Executive VP & Group Editorial Director Mansha Daswani

VP of Strategic Development

TV Middle East & Africa © 2012 WSN INC. 1123 Broadway, #1207 New York, NY 10010 Phone: (212) 924-7620 Fax: (212) 924-6940 Website:

www.tvmea.ws

5

MEA_412_CHANNELS_MEA_1010_ARAB SPRING 3/12/12 5:22 PM Page 10

10 6

TV MIDDLE EAST & AFRICA

Sky News Arabia presenter Nada Al-Shaibani.

P

olitically, the Middle East remains in turmoil, and on the ground there are some very real challenges to be solved. But overhead, the 600 or so satellite channels continue to make progress. The past year has also seen high-definition television catch viewers’ imaginations, and major infrastructure projects, like Abu Dhabi’s twofour54, starting to make a real impact on the market.

Indeed, twofour54 is already providing a comfortable home to international media groups such as Turner Broadcasting (with CNN’s latest pan-regional bureau as well as the Cartoon Network Animation Academy),Viacom (Comedy Central Studios Arabia), News Corporation’s BSkyB/Sky News Arabia, the games house UbiSoft, and local initiatives such as Tropfest, a short-film competition.

The progress also extends to the pay-TV sector. The much-maligned Orbit and Showtime platforms are now finding that as a merged entity, OSN Network, they are helping solve signal piracy as well as pushing the pay-TV envelope with high-definition channels, and tapping into advanced technology such as VOD services, in a deliberate attempt to differentiate themselves from the free-to-air players.

Viacom is a perfect case in point. Its Indian joint venture with Network18, Viacom18, is extremely busy in the Middle East, pushing its top-rated Colors network into the Gulf as well as providing feeds such as MTV India’s energetic Bollywood content alongside the established MTV International and MTV Middle East signals.

EYES ON THE GULF

Channeling

Gaurav Gandhi, Viacom18’s head of distribution and international business, says that in the five years since the joint venture was formed it has enjoyed remarkable success, first in India and now in the Middle East.

“The JV now has six broadcast brands, a couple of HD brands, the movie arm, and other projects under way. These include expansion into other nearby regions, including the Gulf,” he says. “There is a huge [South Asian population] outside of India and this is our initial target audience. Around the world this equals about 25 million to 30 million people, but the big pockets are the U.K., the U.S. and the Middle East. It’s natural that any Indian broadcaster would want to try and reach this

Arabia

Major international channel brands are stepping up their efforts in the Middle East. By Chris Forrester

378

World Screen

4/12

MEA_412_CHANNELS_MEA_1010_ARAB SPRING 3/12/12 5:23 PM Page 11

TV MIDDLE EAST & AFRICA

huge audience.We get a double advantage. By and large, and unlike many U.S. and European networks, we hold onto our IP rights to the shows. Therefore [the process to] get international channels up and running is much simplified.”

Gandhi explains that Colors’ international efforts started in early 2010 in the U.S. and the U.K., expanding to the Middle East later that year. “Initially we started out on the Pehla pay platform run by ADD”—Arab Digital Distribution, a portion of the old ART bouquet. “Then our focus was to get the channel on air and establish ourselves as a serious contender for viewers. For the first year the Pehla team was selling our advertising. Now we have our own office, focusing on expanding Colors in the region and into Africa, and Africa is now a big market for us given that we are available in many local markets, not least Kenya. [Our second priority] was to set up our own advertising operation. Third, we needed an office to look after our various marketing initiatives.”

Gandhi admits that piracy has been a problem, although progress is now being seen. At the moment, however, free to air is not on his agenda. “The problem with the free-to-air market, at least for us, is the absence of audience measurement.

It means we are very limited as to how we can monetize a free network. For us, a combination of pay-TV [affiliate revenues] plus advertising income works very well. With people meters in place it could be a very different argument. Out of the UAE’s total population of about 8.3 million, almost half 4/12

are South Asian, made up of expat Indians, Pakistanis and Bangladeshis.That’s a good audience, but the advertising cake is minuscule, even for Arabic channels. Once measurement is in place then we will look at free services.”

Viacom18 is, however, firmly behind localization.

“When you look at the Middle East—and India for that matter—the best-performing shows have been localized,” says Gandhi. “We launched Comedy Central India on January 23, and at Abu Dhabi there’s excellent work going on for their Arabic localizations.”

ON THE LAUGH TRACK

Comedy Central Studios Arabia is a joint venture of Viacom International Media Networks and twofour54, led by Sharif Maghraby as managing director, that aims to seek out new comedic talent and bring concepts to the screen. “It is not a channel yet,” admits Wayne Borg, twofour54’s deputy CEO and COO. “However, it is clear that when you have such a strong portfolio of shows in development then it is only a matter of time before one of them gets to air. The team is extremely hopeful about a new weekly comedy sketch show, already with a pilot in development and considerable interest from local broadcasting majors.”

FOX International Channels, meanwhile, has taken a different approach to localization. “Like a lot of foreign players, we used to have a traditional strategy of, let’s take one of our existing feeds World Screen

379

7

Prayer room: National Geographic Abu Dhabi recently featured UAE Marvels, looking at structures such as the Sheikh Zayed Mosque.

11

MEA_412_CHANNELS_MEA_1010_ARAB SPRING 3/12/12 5:23 PM Page 16

8

TV MIDDLE EAST & AFRICA

Delicate balance: A+E’s HISTORY, delivering originals like IRT Deadliest Roads, is using subtitling as one way of localizing its MENA feeds.

and throw some Arabic subtitles on it and beam it in from Europe or Asia and sell it to the pay-TV operator,” says Ward Platt, the president for the Middle East and the Asia Pacific at FIC. “We changed that approach about four years ago.We started to launch free-to-air satellite channels and we invested further in our payTV channels. We have a Fox Movies free-to-air Hollywood movie channel, we have a FOX free-to-air international TV series channel, all dubbed in Arabic. We have FX, another free-to-air channel with edgy TV series, all subtitled in Arabic.We have Nat Geo Abu Dhabi, in partnership with Abu Dhabi Media, 100percent dubbed in Arabic, and we’ve launched Nat Geo Farsi. At the same time, we’ve been able to grow our pay-TV business.

We focus much more on the HD strategy there.”

Another company that operates a suite of services in the region is BBC Worldwide Channels, which distributes BBC Entertainment and BBC Lifestyle exclusively on OSN, and the more widely available BBC World News.

“The BBC has a long-established reputation for innovation, quality storytelling and high production values,” says Ian McDonough, the senior VP and channel manager for EMEA at BBC Worldwide Channels, who also oversees a five-channel bouquet in Africa. “By segmenting a portfolio along genre strands, we have provided a one-stop shop for the entire family.”

A core area of focus for BBC Worldwide Channels has been investing in distinctive programming for the portfolio. “A key part of our strategy is to provide our viewers with events that unite audiences worldwide,” McDonough says. “The broadcast of the royal wedding last year across our global networks was a huge success and we plan to air several more events of this nature during 2012.”

are working on new concepts that are being examined by the network. Fifteen new students started their studies in January.

“Our project at twofour54 is essential to the long-term ambition for our business in the Middle East,” Musa explains. “The Cartoon Network Animation Academy enables us to identify and incubate the creative talent that exists in the Middle East; our Cartoon Network Studios Arabia then allows us to nurture this talent through development, mentoring, and hands-on experience in developing concepts from ideas to story board, pilot and, hopefully, full series.The final part of this particular journey is the ambition to create full series that will feature prominently on Cartoon Network Arabic, and possibly internationally.The consumer and commercial success of these local productions will then enable investment back into the talent pool that exists in the region and continue the cycle of creating content.”

Musa says that the start of the process has delivered up two pilots. “Both are underpinned by the creative talent that we have identified in the Middle East—how exciting is that!”

Borg from twofour54 adds, “There’s a change taking place here, where Abu Dhabi is being recognized as an ideas capital, and we want to increase that role. We want to encourage talent, of course, and get young people excited about media and in doing so overcome certain local taboos about working in TV and its related services.”

Borg explains that, as is true everywhere else on the planet, every Middle Eastern youngster wants to be a soccer, movie or pop star, and sometimes all three! But there is very little exposure to the real needs of the broadcasting or production community. Over the next five to seven years estimates are that about 9,000 media-related positions will need to be filled

ARABIAN TOONS

Turner Broadcasting, too, has a number of channels present in the Middle East: Cartoon Network, Boomerang and Turner Classic Movies, all in English, are on pay TV with OSN, while CNN is free to view. Alan Musa, Turner’s VP and general manager for the Middle East and Africa, adds, “Within the free-to-air space we have Cartoon Network Arabia, which has all been either dubbed into Arabic or produced in Arabic.”

In many respects it is Turner’s activity within Cartoon Network Arabia that is the most interesting. With twofour54 it has formed an animation academy, and its first batch of students not only graduated (toward the end of last year), but 380

World Screen

Redrawing the future: Turner Broadcasting aligned with twofour54 for the Cartoon Network Animation Academy.

4/12

ASIA_0412_VIACOM_Layout 1 3/15/12 10:32 AM Page 1

MEA_412_CHANNELS_MEA_1010_ARAB SPRING 3/15/12 10:25 AM Page 17

10

TV MIDDLE EAST & AFRICA

Eastern appeal: Food Network is bringing its British originals to the Middle East, such as Reza, Spice Prince of India.

locally. And as part of that mix they anticipate that an abundance of new talent will emerge.

Borg says that of the 2011 CN Animation Academy trainees, three went on to join Cartoon Network. The graduates are helping develop their own projects, and working closely with those who are now submitting ideas into the Cartoon Network ideas pool.

Turner’s Musa says he envisions more of these strategic relationships emerging. “I see long-term partnerships being established within the region that will encourage the growth of local productions—whether it’s in the news genre, general entertainment or kids’ space. I imagine the topic of research, and a more industry-wide, region-wide metric being an option for the future that will give all parties within the media business the clarity and currency that is needed.”

good, Food Network’s managing director for EMEA, who notes that the Middle East is “a key focus for growth” for the channel.

A+E’s Possenniskie is bullish on the pay-TV model because of its subscriber revenues. He remains cautious about free TV because of the absence of accurate audience measurement in the market. Nevertheless, he admits that A+E remains open to developing new concepts for local free-to-air channels.

However, he says, “the greatest barrier to those [concepts] is the investment, and it would be a significant investment. There’s a huge problem with measuring viewers.When I first got involved in the Middle East, the worry then was the lack of audience measurement and here we are, six or seven years later, still complaining about the same issue. It is really a major concern that has yet to be cracked. It’s good that we now have more proactive interest in this from people like Abu Dhabi Media and we wholly support any initiative that can start measuring this audience.

Until that happens, we will stay with pay TV.” Dubai has its busy Media City, and it is fair to say that despite the political problems in Egypt, Syria and Lebanon, the local production houses have never been busier. And new entrants like twofour54 are nurturing the talent of tomorrow.

Borg says that during three of the worst financial years on record, the Abu Dhabi initiative has grown beyond expectations to permanently host some of the biggest world media names in the industry.The fact that the likes of Turner,Viacom, Disney, News Corp., Discovery and other key players are investing in the region shows that, as elsewhere on the planet, they are thinking globally, but quite definitely acting locally.

LOCAL CURRENCY

Dean Possenniskie, the managing director for Europe at A+E Networks, who also oversees the company’s business in the Middle East, shares that sentiment. “Almost all of our content is localized, usually with subtitles, and OSN looks after that for us. Sometimes they include a Farsi option for that audience, which we see as being critical to reaching the market and building a broader subscriber base. From our point of view, we are focused on bringing the best of our international content to the Middle East. So we are not commissioning local programming, but at the very least subtitling is very important.

With the networks that we currently run, we remain loyal to pay TV.” For Food Network on OSN Network, meanwhile, localization efforts have included on-theground events. “We attended the Taste of Dubai food festival [in Dubai in March] and had one of our newest chefs, Aarti Sequeira, participating in cooking demonstrations for us,” says Nick Thoro382

The main event: BBC Entertainment has made some high-profile acquisitions for its feeds in the Middle East and Africa, including ITV’s Titanic.

World Screen

4/12

MEA_0412_FIC_Layout 1 3/14/12 10:22 AM Page 1

MEA_412_BUTORAC_EUR_1006_ELLENDER 3/12/12 5:26 PM Page 2

12

TV MIDDLE EAST & AFRICA

we’re no longer Orbit Showtime Network, we’re OSN; it’s a much easier, articulated brand.

TV MIDDLE EAST & AFRICA:

OSN’s

David Butorac

By Mansha Daswani

In 2009, after a 15-year battle for supremacy in the pay-TV landscape in the Middle East and North Africa (MENA), Orbit and Showtime merged their operations to become OSN Network. Shortly after the combination, OSN chose pay-TV veteran David Butorac as its new CEO. With a career that includes positions at the pan-Asian STAR, Malaysia’s Astro, BSkyB in the U.K. and FOXTEL in Australia, Butorac is tapping into his extensive experience to build out OSN’s business in the rapidly developing MENA region. He speaks to TV Middle East & Africa about his focus on original content, shorter windows on imported shows and driving HD and DVR rollouts.

TV MIDDLE EAST & AFRICA: When you came to OSN, what was your strategy for the recently merged platform?

BUTORAC: If you look at the history of pay TV all over the world, there were often competing platforms; I was around in the Sky days before the merger [with BSB] and lived through that. The difference is that BSB and Sky competed with each other for two years and Showtime and Orbit competed with each other for 15 years. In 2009 they merged and that created an opportunity to grow out the platform. The shareholders also made a really bold decision to invest in a complete change of the CA [conditional access] system and boxes, so that we could have a secure platform. Piracy was hurting the business badly. So the businesses finally had merged, we’d overcome piracy—that [served as] the bedrock for growth.

The key for me is being able to get the consumer to reengage with pay TV after 15 years; a lot of them had looked at pay TV and decided there was nothing there for them. We now have to encourage them to reengage and [we need] to invest in localized content.We’ve just embarked on investing in original Arabiclanguage entertainment content. Over the last two years we’ve quadrupled our marketing spend. We have quadrupled our spending on research so that we can actually understand the consumer a lot more. [We’ve also created] a stronger brand: 384

World Screen

You’ve also been rolling out imported shows almost day-and-date with their U.S. release. Does that help to discourage piracy?

BUTORAC: What we do with all of our major series now is that we’re within 24 hours of the U.S release. So when Desperate Housewives season nine aired in the U.S., 24 hours later it was on our screens in the Middle East. All of the major series: Pan Am, Boardwalk Empire. BSkyB launched Sky Atlantic in March 2011 with Boardwalk Empire.We aired the series in September 2010.We were six months ahead of the curve. We do that to stop the imperative to download.Why would my teenage daughter download content? Because she wants to watch it as soon as it’s available. If we can deliver it in beautiful high definition on a beautiful TV screen, why download it onto your laptop?

TV MIDDLE EAST & AFRICA: What are your plans for offering your viewers access to content on multiple platforms?

BUTORAC: We’ve committed expenditure to build out our digital platform, which commenced in the first quarter of 2012. I want our customers to feel the value proposition of their broadcast subscription extending way beyond the TV screen. They can have content on their tablet, on their smartphone, on their PC, on their laptop. So long as we get the DRM [digital rights management] right, the studios will be hugely supportive of this. Initially it will bring churn rates down, eventually it will also add to incremental revenues.

TV MIDDLE EAST & AFRICA: What are some of the other

strategies you’ve put in place to reduce churn and increase your ARPU? BUTORAC: Lowering churn is about providing a high-quality product and making a value proposition for subscription television.What we’re doing is investing in local content and making certain we can shorten the windows of the content, have consistency in our approach and have a quality customer-care experience. All of those go together to bring churn down. In the last 12 months we’ve halved our churn rate. At the same time [in 2011 we increased] our subscriber base by 34 percent. So the subscriber base is taking off, the value proposition is taking off, the churn rates are dropping. And that’s all to do with the quality of content. The emphasis is on HD. We now have 19 true 1080i HD channels—no one else in the region is doing it.

TV MIDDLE EAST & AFRICA: How has the takeup been

for your DVR and HD services?

BUTORAC: DVR and HD are two really important strategies.

Our premium customers get a free DVR. Over 60 percent of our new customers are coming in at premium. Once you experience 4/12

MEA_0412_M-NET_Layout 1 3/7/12 12:28 PM Page 1

MEA_412_BUTORAC_EUR_1006_ELLENDER 3/12/12 5:27 PM Page 3

14

TV MIDDLE EAST & AFRICA

Saudi Arabia—and the volume markets like Egypt, that’s where you’ll see the biggest growth.

TV MIDDLE EAST & AFRICA: What

A rich experience: OSN launched its Ya Hala! channel in HD last year as a home for original Arabiclanguage series as well as imported fare from the region, such as the Turkish hit Hareem Al Sultan.

television on a DVR, you don’t go back.We just commissioned a new hybrid set-top box, which will have a terabyte of hard drive space. It will be an Internet-connected box as well, so we can do trueVOD downloads, we can do all sorts of connectivity between the satellite stream, which is our primary distribution, and the Internet.We will continue to stay on the front end of the curve when it comes to that level of technology. And there are 400,000 HD panels sold every month in the MENA region.

Most of those customers are going home, bolting a beautiful television to their wall and watching SD on a nice TV! As we expand our HD experience, our viewing share in HD is just skyrocketing.

TV MIDDLE EAST & AFRICA: Did the Arab Spring protests last year affect your business?

BUTORAC: In terms of our sales, it probably enhanced some parts of the business. It gave us some minor disruptions—particularly in Egypt, Libya. A lot of the areas where there was a movement and change, there was a bit of a distrust of staterun television.We have a myriad international news channels, so what we’ve seen is not a long-term [reduction] of sales in these markets—it has actually allowed us to continue to expand. Egypt is going very well for us, even though they’ve been through the issues they’ve had.

TV MIDDLE EAST & AFRICA: What are your other growth

markets?

BUTORAC: Saudi Arabia is our biggest growth market and so

it should be, as it’s got a [high] level of affluence. We need to simply get our message out about what pay TV is about, and our sales are already taking off. UAE is always a very strong market for us. It has a predominantly foreign workforce and we’re able to aggregate a lot of content. And throughout the region, if you cut affluence off at household incomes of, say, $25,000 or more a year, most of those households have Englishproficient Arabic-speaking locals—a lot of them have been educated overseas. So our English-language content is very important.The number one driver is English-language movies.

The big markets of the Gulf states—Kuwait, UAE, Bahrain, 386

World Screen

kinds of content packages are you offering to appeal to the large population of migrant workers in markets like UAE? BUTORAC: There are 3.5 million Filipinos working throughout the MENA region, and the South Asian [population], the Hindi and Urdu-speaking [segments], are very strong as well. We currently aggregate a five-channel Filipino-language package, which is hugely successful, and we’re looking at getting into the South Asian markets. The South Asian market is usually fairly English proficient, so our English-language content will be appropriate for them as well. But [we’re looking to] aggregate some of the core sports, particularly cricket, and entertainment from [South Asia]. That’s a focus in the next 12 months.The other significant thing we’re doing is we’re looking to pull together some French-language content so we can have a package specifically targeted across North Africa.

TV MIDDLE EAST & AFRICA: You mentioned acquiring some cricket programming. How do you manage the constantly escalating issue of sports rights?

BUTORAC: The reality is in our region, round-ball sports rights, i.e. football, have gone to uneconomic levels. The two predominant sports platforms [Al Jazeera Sports and Abu Dhabi Sports] are [government] backed and the economic return is not an imperative—we can’t compete with that. We would love to aggregate English Premier League football or Champions League football onto our screens, but given the rates we’d have to pay for the rights, we can’t do it.We carried the Rugby World Cup live and exclusive, all 48 games in HD. We carry a lot of golf and U.S. sports. So there’s a market for sport beyond international round-ball football.

TV MIDDLE EAST & AFRICA: In your current position,

do you see any parallels with pay-TV platforms you’ve run in Europe or Asia?

BUTORAC: The biggest similarity is with Astro [in Malaysia].

Astro is in a multiethnic, multilingual market. What we have in the Middle East is quite a diverse multiethnic market, albeit ultimately a single-language one. If I look at pay TV in the MENA region, 16 years in existence, it’s at about the same state that Astro was in back in the early years of this century. I joined Astro in 2002, when we were just on the cusp of taking off—we floated the company and the business has been hugely successful. I see the Middle East region on the cusp of taking off. We have an increasingly affluent market. We are a very forwardthinking regulatory environment—that’s a surprise for a lot of people coming from the outside. The key difference is [in MENA] you have about 500 free-to-air channels, all of which are distributed on satellite. Satellite is the main distribution means for free to air. So what we have to do is differentiate our product by quality and by localization. That’s fairly similar to what we had to do in markets in Asia as well.

4/12

MEA_0412_TELEFE_Layout 1 3/12/12 5:59 PM Page 1

MEA_0412_TELEVISA_Layout 1 3/2/12 3:07 PM Page 1