ORBIT URGES MIDDLE EAST CO-OPERATION
The pack of satellite broadcasters in the Middle East region – both pay and free-to-air – risk “bleeding to death” unless they come together in some sort of common platform, said Alexander Zilo, president of Orbit Television, the Middle East pay-TV broadcaster.
“Convergence or death, that’s my view, and defining death is either closing down or sustaining astronomical cash losses,” says Zilo. He pointed out the large sums currently being paid by free-to-air broadcasters for sports rights, with no matching rate of commercial return. “Look at sports rights here in the region. MBC, I understand, has just paid upwards of $20 million [E24.12 million] for the upcoming Asian Cup championships. Ask yourself where is the return? It would be the same for events like the World Cup [soccer] where astronomical sums are being paid for a maximum four weeks ratings, sums that would allow us to fund a half-dozen channels for a year. Everyone in the region will continue to hurt while this is going on.”
Orbit, which claims some 400,000 so-called ‘viewing points’ in the Middle East, is concluding an exclusive agreement with Canal Plus Technologies to introduce MediaGuard/MediaHighway technology within a new generation set-top box. The box itself will initially be manufactured by Sagem, although other suppliers will come on stream in due course.
Zilo says he expects the new box to start shipping in May-June next year, with mass market supplies becoming widely available next autumn. The Saagem box will be available on a lease basis for around $10 a month locally.
As to Orbit’s two rival platforms, Arab Radio & Television and the Kipco/Viacom backed Showtime, Zilo says that when he joined Orbit some eight years ago he would have predicted local broadcasting consolidation to have taken place by now.
“I claim it is still going to happen, whether it is with full willingness or by osmosis. It is not if, but when. We are already on the right platform and it’s called ArabSat. Whether something should happen on this or that satellite, especially with NileSat in the equation, is no longer a problem because we are almost all on the same platform which is ArabSat. Some people have to ask themselves whether they are going to remain on NileSat. Beyond that it is a question of decoder technology.”
On the question of decoder technology (and Orbit currently operates its own non-DVB compliant encryption, dubbed MPEG 1.5), Zilo says, “As far as operating systems are concerned I do not see this any longer as being a major problem or an issue to stumble over. Common interface solves that completely provided everybody gets behind [the same] box technology. I am certain it is going to happen and it is already de facto happening.
“Interspace has spoken with some authority about ART and Showtime, looking closely at their whole encryption with a strong likelihood of a swap out. It then makes sense for us all to agree some sort of simulcrypt or multicrypt technology and then for us to battle it out on the strength of our programming offering, with perhaps an independent joint venture on the subscription management side, so that we all have to trust one another.”
Middle East broadcasting is somewhat dominated by Saudi Arabian wealth, and the Kingdom’s decision earlier this year to abandon its own MMDS system (SaraVision) could be taken as a guide that locally-imposed ‘dish bans’ are no longer practical in a region where dish ownership is widespread.
One option could be that the Saudi authorities, tired of seeing various factions backing what are seen as rival platforms and channels, being encouraged to work together.
Zilo insists this question is not one for him to answer but stresses that, “At the end of the day the business case and common sense says we must all do this.” One element being widely discussed amongst broadcasters is the various temptations, including financial subsidies, on offer to broadcasters wishing to formally re-locate themselves in one or other of the ‘tax free’ zones in Dubai, Cairo or Amman.
Orbit was widely reported to have decided on Bahrain’s hospitality, although Zilo now says that deal has gone quiet. “Bahrain was announced and an agreement signed. Meanwhile, I have had to prepare for DVB-compliant broadcasting and this has meant a new giant uplink dish, which makes it more difficult to move. If we were going to move we really should have done it prior to making large capital investments on things like dishes, which we have just done in Rome.”