Last week, YahLive -- in which SES is a shareholder -- closed a long-term agreement with Dubai-based market leader for free-to-air satellite broadcasting, the MBC Group, to broadcast its large portfolio of HD channels.
We catch up with Mohamed Youssif, the CEO of the United Arab Emirates company, to find out what major challenges he has been facing in the Middle East region and how the company is working to overcome them.
What developments have you witnessed in the Middle East broadcasting industry in the past 12 months?
There have been a number of developments. However the most significant being the advent of HDTV in the region, plus viewers’ hectic lifestyles which have consequently changed their TV viewing habits.
Advent of HD
Despite the fact that in some Gulf countries, it is almost impossible to buy a conventional SD television set, only a few channels are broadcasting in HD.
Even then, these HD channels tend to use a low average bit rate of around 4.5 Mbps to save on the satellite cost of broadcasting, whereas in comparison European HD usage can be up to 18 Mbps.
Hence even though more than 10 million HDTV sets are sold in the ME region, HD content remains scarce in comparison to SD content. As such, early viewers of HD are hungry for more content to fully enjoy the investment that they have made in acquiring their nice big flat TVs.
Once viewers have experienced HD’s high quality, it is very difficult for them to go back and watch an SD channel. Some MENA VIPs, prior to their travel, have their staff make sure that their place of residency is equipped with HDTV viewing. This is an important trend that is sweeping the region and will continue to grow for the next few years.
Over the past 12 months, it is noticeable that people have less and less free time. This means that when they watch TV, they want to see what they want, when they want it and for that, they are willing to pay.
As such the old model of TV viewing which can be summarised as, “I (the viewer) give you (the broadcaster) my free time, and in return, you give me free entertainment mixed with some advertising” will not continue.
This is why I believe that the free-to-air model of some 600 channels currently being applied in our region cannot continue for long.
Our viewers have adopted a new behaviour and the broadcasters have to accommodate this change. As broadcasters are being squeezed by expensive content and face the challenges of the advertising market, they will have to start looking for other sources of revenue – a viewer supported model – pay TV,
Change in viewing habits
“The Arab Spring” greatly increased awareness of “Live” news services, as viewers spent a considerable number of hours watching TV news coverage of what was and still is going on in; Tunisia, Egypt, Libya, Yemen, Syria, Bahrain etc .
This great surge in demand for news put additional pressure on broadcasters, as their viewers demand to watch events “live” as they happened. This increased broadcasters’ cost to cover events – even though they had not been budgeted for.
How have these changes affected YahLive?
The evidence we have seen clearly demonstrates that increasingly people are ready for HDTV , but want more control over what they are watching and when they watch it. This presents a huge potential for growth in the Middle East HD market .
Having said that, it is not an easy situation, many broadcasters are still waiting for significant increases in viewer numbers for HD and the availability of STB receivers, before they make the plunge into the world of HD. The flip side of the coin is that some viewers are waiting for the availability of more HD content and for broadcasters to switch to HD before they make their investment in a HDTV and HD receiver.
It’s a chicken or egg situation annd we at YahLive are doing our part to help break this stalemate.
We are addressing these issues on a number of fronts;
- We are offering a quick start solution for broadcasters who do not have their own HD content, - with the interim solution of up-scaling their SD signal at our cost, until they are ready to commence with their own HD content. This will enable the broadcaster to enter the HD market with minimal investment and without interrupting their current revenue stream. This will further drive the penetration of HD by providing additional HD content to the market.
- We recognised that the current economic crisis and the resulting decline in advertising revenues may have prevented broadcasters from acquiring capacity on our satellite. Therefore, we have offered a free of charge period as an incentive to assist broadcasters control their HD start up costs.
- YahLive will “only” be broadcasting in HD. Using a minimum of 8 Mbps per channel -- twice the average currently used in the region. This will make for a better end user viewing experience at 52.5° East and the quality of the signal will be better than what many people in the region are used to.
Now that MBC Group is entering a long-term strategic partnership with YahLive, what does this mean for the Middle East market / viewers?
This partnership is the first milestone in the evolution of YahLive and takes a major step forward towards the YahLive strategic vision – “to become the HD hotspot for the region and beyond”.
The TV audience in the region will be able to enjoy high quality TV content from our HD hotspot at 52.5 °E.
The YahLive and MBC Group deal was announced on 5 December.