Satellite operators expect FTA channels to rule the roost for the near future

Thursday, Mar 10, 2016

Regional satellite operators expect free-to-air (FTA) channels to still rule the roost for the near feature despite growth in Pay-TV channels.

Markuz Fritz, senior vice-president of commercial development and marketing at Eutelsat, told Gulf News that Pay-TV broadcasters are increasing their capacity for high-quality channels and the market is growing but it is still low compared to other regions.

“Growth in the Pay-TV market does not mean that the FTA channels are not growing,” he said, but he admits there is data available on FTA channels.

The Paris-based satellite operator has 40 satellites to cover the globe and Fritz said that more capacity will be used for HD channels and has enough capacity to meet the short-term needs.

Sami Boustany, CEO of Abu Dhabi-based satellite broadcasting company Yahlive, said that the business around Pay-TV is fairly new to this region. It [Pay-TV] is catching up but they are not exclusive to each other.

Vidya S. Nath, research director for digital media at Frost & Sullivan, said that interest in live sports content is one of the major reasons for growth in Pay-TV subscriptions in the Middle East and North Africa.

“Increase in interest among broadcasters to invest in licensing local sports leagues has generated interest among viewers for local sports content as well,” she said.

Surge in revenue

According to Arab Advisors Group, four satellite Pay-TV providers broadcast from the Arab World — OSN, beIN Sports, Al Majd and MyHD. beIN Sports offers the highest number of sports Pay TV channels in the region. Pay-TV operators offered 280 channels as of September 2015.

According to research firm IHS, the Middle East and North Africa Pay-TV market will grow five times faster than the US, UK, Germany, France or Italy between 2015 and 2019. By 2019, there will be 6.6 million pay TV homes, and revenues will surge to over $1.8 billion (Dh6.6 billion).

“We have around 200 FTA channels on our network and no Pay-TV channels. Our business is to provide the capacity and it is up to the broadcasters and content providers to decide,” Boustany said.

Moving to a Pay-TV model is the next step after building free-to-air hotshots, he said, adding that broadcasters’ wish is to move to a paid model.

In the near future, he said that the demand will be for FTA in the region and many households are not willing to pay and watch the channels.

Eutelsat has 1,100 free-to-air channels on its regional fleet and the rest are Pay-TV channels, out of the total 1,500 channels. It has more than 100 HD channels.

Globally, it has reached a total of 6,000 channels on its fleet of satellites. Eutelsat is now carrying more than 2,200 free-to-air channels.

Monetisation avenues

Challenged by a difficult economic environment, increasing competition and the fickle consumer, Vidya said that broadcasters are seeking advanced technology solutions to help with new monetisation avenues.

She said that the use of illegal set-top boxes by expats and illegal streaming of content in the region are hurting revenue for free-to-air and Pay-TV operators in the region.

“Arabic content library is the key to attract the local market and sustain growth in advertising revenue, especially for FTA. International content portfolios are important for broadcasters and Pay TV to attract the population influenced by globalisation and also expats who account for a major part of the working class,” she said.

The desperation of the expat population to watch their local language content has led to the “piracy of Pay-TV content” from Asian broadcasters.

“The GCC is advanced due to better infrastructure, but fluctuating oil prices and regional instability have been a deterrent in technology investments in the broadcast industry,” she said.


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