MBC Group, one of the Middle East’s strongest FTA broadcasters, signed a significant HD agreement with YahLive in December to broadcast its portfolio of high-definition channels. As a result of the deal, viewers of YahLive now have access to seven HD MBC Group channels across the Middle East and North Africa. Sam Barnett, CEO of MBC Group, hopes the deal will kickstart other HD activity in the region. He spoke with Via Satellite about the broadcaster’s HD strategy and how he sees the broadcast landscape developing in the Middle East.
VIA SATELLITE: What are the major challenges for MBC during the next 12 months? Has the global economic recession had an impact on advertising revenues?
Barnett: The key challenge for any FTA broadcaster is to keep the ratings high. We have a significant market share in Saudi Arabia and we currently have 46 percent of the Target Rating Points (TRPs) in KSA and the Gulf. We have different ratings across the region. That is a very high number when you compare us to colleagues around the world. Our key challenge is to maintain that number, which is a day-by-day battle. We are investing a huge amount of effort in programming and we are confident that we will keep those ratings high. We are in an environment where we have 650 competitors snapping at our heels, and that remains a key challenge for the year.
The other challenge is to get the advertising and monetize those ratings. The Arab world had a difficult year in 2011 with the Arab Spring. Advertising paid a price for that with the political uncertainty around the region. We felt that advertisers had come to grips with the uncertainty in the latter half of the year, but they have been coming back more recently. Then, there was the European financial crisis and we are waiting to see what the impact of it will be, particularly on our multi-national clients.
VIA SATELLITE: What would you say are the major technical challenges facing MBC right now?
Barnett: We are implementing the last phases of our tapeless transition this year. We had a tapeless transmission system for many years, however, only now are we making sure the various production elements are tapeless. We are catching up with other broadcasters in doing this. When one moves to a tapeless environment, the workflows, and virtually everybody’s job, changes. This is a challenge we are dealing with this year.
VIA SATELLITE: What are your plans in terms of producing more content in HD?
Barnett: We look at our HD as a three- to five-year strategy. We decided to go HD halfway through 2011. We felt there were enough HDTVs in the market to make it viable and interesting for our audience. At the same time, the cost of equipment had declined to a point that it became more interesting for us. We see a transition from SD to HD happening in the next five years. As a FTA broadcaster, we want to follow that transition.
Currently, we have seven HD channels on our bouquet. We have another three SD channels; so a total of 10 SD channels of which seven are now HD. I imagine the other channels will move to HD at some point, as more of the market converts and takes more HD boxes and TVs. We produce content in seven different places. So, ensuring that all of the content is being produced in HD is a key technical challenge for us. We expect to complete a full transition to HD in the coming months.
One of the interesting dimensions about satellite in the Middle East is that it is outside the control of the various government regulators. The whole evolution of the satellite TV industry in the Middle East was based on that fact.