[Via Satellite 05-26-2015] Middle East Broadcasting Center (MBC Group) is one of the strongest Free-to-Air (FTA) broadcasters in the Arab World. The privately operated media company has 20 television channels broadcasting today as well as two FM radio stations for audiences in the Middle East and North Africa (MENA) region and beyond. Via Satellite caught up with Sam Barnett, CEO of MBC Group, to discuss his views on trends in video consumption, including the shift to High Definition (HD), addressing the challenge of piracy, and the increasing importance of Internet Protocol Television (IPTV) and Over-the-Top (OTT) content.
Via Satellite: How was business for MBC in 2014?
Barnett: MBC had a good year in many respects. Advertising revenue continued to increase despite regional uncertainty and the hit to oil prices. We maintained our audience figures in the Gulf and became the top channel in Egypt. The year wasn’t without its challenges, though. Piracy over satellite remained a big threat. While we received support from many respectable players in the industry, certain satellite companies have insisted on continuing their business with the pirates. This is a pity.
Via Satellite: The Middle East is a hot market for television. How have you seen this competition shaping the competitive landscape?
Barnett: Certainly there is a growing competition for our viewers’ attention, not just from traditional television players, but also from new players in the content industry. There is also an increasing proliferation of people viewing content in many different platforms — i.e., smart TVs, tablets, online streaming, smartphones — and all players see themselves competing in a global marketplace for content. This allows content to be consumed anywhere at any time.
With the uptake of technology, it has also become easier for new players — startups and globally established players — to enter the regional markets. We still find ourselves in a strong position because of our focus on knowing the audience and giving them the best content in the way they want to consume it. One way to look at the future might be by owning different platforms, and we are starting to do that with the launch of our Video on Demand (VOD) service called Shahid.
Via Satellite: What satellites are you broadcasting over today? Do you foresee the need for more capacity in the near-term?
Barnett: We have a strategy to make sure we have content available on different satellites, and currently we are broadcasting our Standard Definition (SD) and HD channels on Nilesat, Arabsat and [Eutelsat] Hotbird. We also felt the need to be on spot beams, which enables us to target different audiences and monetize different markets. This is the direction we want to take in the future. The SD market will naturally move towards HD at some point and therefore additional capacity will be needed to satisfy the needs of our audience.
Via Satellite: Is there an appetite for more HD channels? How many are you broadcasting now?
Barnett: I see a natural shift of the standard from SD to HD. This has varied from country to country and we have seen the United Arab Emirates and Saudi Arabia gradually taking that shift, while other markets, such as Egypt, are still mostly on SD. I think there is an increasing appetite for new original and premium content, and customers have certain expectations for quality and availability of that content. For this reason a variety of our channels appearing on selected platforms are all on HD. We are currently broadcasting eight HD channels out of 13, and we will probably increase our number of HD channels as technology becomes more affordable and people show more willingness to upgrade their TVs at home.
Via Satellite: Do you see Ultra-HD on the horizon, or is it too soon to say?
Barnett: There is always a benefit to TV and content manufacturers to push the boundaries towards more advanced technologies. However, moving to Ultra-HD will be seen as both a benefit and a risk to various players in the industry. Some premium content providers might use 4K technology as a differentiating factor, but it is still in its early days despite the number of TV devices in the shops.
Our primary bouquet is still on SD and our premium content is available on HD platforms. While there was varying success when HD emerged from an increasing appetite for higher quality of content, the shift to 4K might represent a more significant push from the suppliers.
Via Satellite: Is MBC looking at IPTV and OTT broadcasting?
Barnett: We are already present in various forms of IPTV and OTT. Our channels are currently available on all the key IPTV players — both in the region and internationally — and we are always actively expanding our presence on IPTV in various distribution platforms globally. We were pleasantly surprised to discover that our brand is strong outside the region and in areas we didn’t expect such as sub-Saharan Africa, and we are keen to increase our global and IPTV presence. I think most broadcasters are certainly looking at OTT if not already engaged in, both through partnerships, presence on platforms or direct ownership of platforms. We have our own video-on-demand platform “Shahid,” which is present online and in OTT offerings through partnerships with Smart TV players. However, satellite penetration is still big in the region and our support of FTA channels will remain our main focus, while broadband penetration will soon become reliable enough to move towards premium markets through hybrid boxes that take the satellite signal and play it on TV.
Via Satellite: Do you see advances on the satellite side that are making broadcasting better, smoother or easier? Or is innovation happening too slowly?
Barnett: Yes, there have been several advances, such as the spot beams or the anti-jamming satellites, a Carrier ID that is used to identify jammers, as well as Hybrid Broadcasting Broadband TV (HBBTV) mentioned before.
Via Satellite: Is the regulatory environment improving for television in your markets?
Barnett: We have certainly seen improvements in areas such as piracy. The anti-piracy coalition is now active and we have already seen as many as 28 pirated channels taken off air as a result of the work we have been doing with governments in the region. We feel the momentum and optimism around these initiatives and we are confident that major steps will soon be made in this area. In addition, the fact that the telecommunications industry is improving its infrastructure by adding fiber technology enables IPTVs speed to be faster and consequently more channels and more content becomes available.
Via Satellite: Was there anything that surprised you about the satellite broadcasting business last year?
Barnett: There are now approximately 75 pirate channels operating on satellite in the Middle East. These channels steal content without paying and then broadcast it free-to-air. Most satellite operators and distributors refuse to carry the pirates, but a few insist on continuing to do so. I’m surprised that large public companies accept such business.
Via Satellite: Where do you see MBC Group in 2016?
Barnett: I am confident that next year MBC Group will continue to dominate the content market by offering the best content on a variety of platforms, and we will continue to be the first choice for viewers to consume content in the Middle East. We control the majority of premium Arabic content and we have very strong brands. Our channels cater to different audiences across multiple territories, and we are making sure that whatever platform people use they get access to our content.