Rotana Looks for New Digital Markets in Middle East

Saudi-based Rotana is one of the Middle East’s major media groups, and earlier this year, News Corp. reached an agreement to buy a 9 percent stake in the Rotana Group. Via Satellite spoke to Yousef Mugharbill, president of Rotana Digital Media, about the company’s HD plans as well as other initiatives. 

VIA SATELLITE: What are the major challenges for Rotana Digital Media this year? 

Mugharbil: I think in 2010, we will feel the full impact of the financial crisis in 2009. However, I also feel we will start to come out of it as an industry. But we feel as though we have a lot of opportunities in terms of digital media where we can open new markets and new channels in the online industry. We are going to continue to do a lot of things in mobile as well as extend the brand in terms of an MVNO offering. 

VIA SATELLITE: Are you still feeling a recession impact?

Mugharbil: Yes. The recession has impacted many operators globally and the telecom industry in general. Nonetheless, I remain optimistic in terms of the opportunities ahead of us. We are looking at video on demand, entertainment-on demand, second brands and MVNOs. In addition, the online sector is booming in the Middle East and the uptake of broadband is skyrocketing, and that presents us with great opportunities. 

VIA SATELLITE: When will you begin HD broadcasts? 

Mugharbil: There is a lot of hype surrounding the HDTV industry. It took a long time for it to take off in the United States and Europe. It will take some time for it to have an impact in the Middle East. We have some HDTV channels in the region with some broadcasters and we continue to look at it, but I don’t anticipate HDTV channels to be a mass market in the region. In addition, I anticipate the service to be a mix of FTA and pay-TV depending on the business rationale for each broadcaster. Therefore, it will be a cooperation between broadcasters and satellite operators, content owners, and others in order to allocate capacity, unique content, etc. 

VIA SATELLITE: What will trigger faster adoption of HDTV in the Middle East? 

Mugharbil: HDTV adoption has been slow in the Middle East even though the technology has been there. What the Middle East has shown in the past is once the technology is there, we are very fast adopters of technology. In the United States, it took a long time for HD to take off. Today, almost 80 percent 85 percent of the TV sets being sold in the Middle East are HDTV ready. In that sense, the devices and the consumers are there. You need the broadcasters and satellite companies to allocate the necessary capacity. Then you to have to look at the financial aspects of it as well as then producing compelling content in HD. 

VIA SATELLITE: What are your major content initiatives?

Mugharbil: HD is something that will happen. When it will happen has yet to be determined. Deployment of HDTV has to have a business model behind it in terms of the broadcasters, the set-top box manufacturers, the device itself, etc. You also have issues such as is it FTA or subscription. So the jury is still out on HDTV in the region.

We are working on rolling-out our second brand, rotana moj. We started in Morocco, and other markets will follow. This is one of the most exciting things I am working on. In the meantime, I would say the proliferation of broadband in the region is a key factor for deploying new and exciting digital services, especially since the region has suffered for a long time from poor broadband penetration. 

VIA SATELLITE: What will you be doing over broadband?

Mugharbil: We are doing and [entertainment on demand], etc. We are preparing for the rollout of our broadband home entertainment offering with regional operators. Our offering will be available in all markets and especially markets where we see broadband movement.