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The Five Digital Personas of the Middle East Broadcaster

October 6, 2015 1 comment

If you’re a traditional free-to-air broadcaster in the Middle East, you most likely belong to one of five camps when it comes to the impact of technology and OTT services on your business and on your audience. Only one of these groups has a chance of surviving the shifting content consumption landscape.

Group 1: The Unaware (“What’s OTT?”)
This group includes quite a few household names, as well as several privately-owned standalone channels across the Middle East. The prominent members of the group are the state-owned broadcasters who have only applied cosmetic changes (“Let’s change the logo!”) to their channels. Their management teams are neither digital natives nor digital immigrants. They are preoccupied with managing the historical baggage that has accumulated in their organisation over decades. They are the captain of the Titanic standing on the bridge but not seeing any icebergs. This group will be swept aside, and they won’t notice until it’s too late.

Group 2: The In Denial
(“It won’t happen here!”)
This group has an often-heard chant: “Linear TV is forever. Viewers are lazy and passive. Our markets are different. The internet is too slow. The mobile screen is too small. The kids will want linear TV when they grow up.”
Oblivious by choice, they believe their market is somehow isolated from the impact of technology and operates under different rules. They make incremental changes to their channels (new grid here, new sports rights there) and see no need to change how they go about their business. This group will also be swept aside, but not before realising their error in judgement and attempting a futile last-minute attempt at reinventing themselves.

Group 3: The Wait-and-See
(“I’ll jump in when it’s worth it!”)
This group has it figured out. They have crunched the numbers. They have forecast the audience shares. They have built business cases with multiple scenarios at various degrees of sensitivity. They have evaluated the technology. They go to all the cool conferences. They know what it takes and will wait until the market is right and the revenues are worth going after.
This group will get a surprise. Just as they decide to jump in, they will discover that the others are already there. They will find that new previously unheard-of companies and brands ‘suddenly’ command a significant market share. Then they will crunch their numbers again, and find out that they need to significantly increase their planned investment to catch up. Those who can afford it may remain relevant.

Group 4: The Easy-Does-It (“Here’s a pretty catch-up website, and maybe an app or two!”)
This group is confident they’re taking the right steps. You can watch their channels live on your TV, your computer, your tablet and your phone. You can download the app. You can catch up with almost any programme broadcast over the past six months. They played with Periscope and Snapchat to show the world they’re cool with tech. Except they wrongly assume the answer solely lies in deploying technology, while the content, the consumer and the business model remain unchanged. Digital is something a few young people on one of the floors of the building take care of, while for everyone else it’s business as usual.

Group 5: The Paranoid
(“They’re coming after my audience!”)
They cannot sleep. They know their time is finite. They disagree on how long they can maintain the same unsustainable business model before making the transition to the new one. They worry about losses in the transition period. Meanwhile, the audience is fragmenting. The consumer is distracted across multiple screens. Technology is moving faster than the planners. The audience is experimenting. Their expectations of what and when and where and how they can consume content are changing. The advertiser has noticed, and budgets are shifting.
TV is wrenching itself from its linearity and being redefined by ever-changing technology in the hands of the consumer.

Which group are you in?

This post first appeared in BroadcastPro magazine here.

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When Hollywood is Not Enough – OTT Content in the Middle East

October 6, 2015 Leave a comment

The pure-play premium OTT market in the Middle East recently saw another entrant in the form of Starz Play Arabia joining the likes of Icflix, OSN Go and a bevy of telco offerings. Meanwhile, rumours abound of the impending arrival of Netflix and the launch of new broadcaster-backed offerings. This is all good news, as competition undoubtedly benefits consumers and drives innovation.

However, even at this early stage, it is becoming harder for services to differentiate themselves. Features such as HD streaming and multi-device support may have been enticing in the past, but they are now expected to be standard. Thus, the competing services have three primary competitive levers: price, content and convenience.

It is a safe assumption that a price war in a business that relies on volume rather than margin is a race to the bottom and best avoided unless one has deep pockets and a propensity to ignore commercial common sense. Inevitably, pure-play OTT services will converge around a similar price point or be ‘free’ as part of triple or quad play offerings.

Content, is of course, the weapon of choice in this fight. And here again, it is easy to default to the lowest common denominator: Hollywood. Yes, Hollywood content can serve well as a glamorous window display with big brand-name actors and titles, but its ability to sustain high growth in subscriber numbers in the Middle East is, in my opinion, doubtful for a variety of reasons.

One reason is the lack of scarcity. There is no shortage of Hollywood content on free-to-air channels. Beyond blockbuster movies, viewership levels are not as impressive as they used to be. US drama series and sitcoms, in particular, do not appeal to a wide segment of the population in the Middle East markets that matter commercially.

Another reason is the windowing structure imposed by the studios, which results in a very delayed arrival of titles onto the OTT platforms. This model is out of step with market realities, but changing it is not always easy, due to the need to protect the US market or other international distribution commitments. Thus, ardent fans of a particular title will watch it in the pay-window or download it illegally shortly after its US broadcast. For everyone else, the content is free on FTA channels.

Television ratings indicate drama is the most popular genre, and time and time again, consumer surveys show that Arabic is, by far, the preferred language for drama series to be watched in. Although dubbing might work for a Turkish series because the locations and actors don’t seem too distant, dubbing becomes much less convincing when the characters and settings are obviously foreign.

We come to the unsurprising conclusion that Arabic drama content is key to success. Even more alluring would be an OTT player’s ability to offer original content outside the Ramadan window. But simply taking a page from the book of Netflix and producing original content in sufficient volume to convince people to part with their money is not viable for all players. It takes significant production and marketing budgets to produce and promote content that appeals to the various markets within the Middle East.

Relying purely on library content is not a convincing offering for Middle East consumers. Licensing a first (Ramadan) or second (post-Ramadan) run of an Arabic drama series would allow OTT players to play their other trump card: binge viewing convenience.

An OTT player offering all 30 episodes of a drama on day one of Ramadan would create a new viewing experience for viewers. Similarly, offering exclusive Arabic dramas for binge viewing immediately after Ramadan would free viewers from the shackles of TV schedules. Since it is customary for licensors of first and second windows of Arabic drama to be granted a multi-year third run (library) window, an OTT player would still be able to maintain a broad long-tail offering.

The OTT player that can offer a large selection of exclusive first- and second-run Arabic series on multiple platforms, available from the first day of Ramadan or the post-Ramadan window for binge viewing, would certainly have a tempting proposition for subscribers in the Middle East.

This post first appeared in BroadcastPro magazine here.

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