The big players

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Chahine says high-quality prodcutions from Syria and Kuwait are now challenging Egypt’s leadership in the drama production market.

Gabriel Chahine, vice president of Booz Allen Hamilton, and associate, Adel Belcaid, outline the key challenges facing Arabic TV production houses.

Can you name some of the production houses in the region that are well known for drama production?

GC: Egypt has always been at the pole position of drama production in the Middle East. Prominent production houses there, such as the Egyptian media production city or ERTU, are well known and have been around for a long time.

However, the Egyptian leadership is more and more contested, with successful productions emerging from other Middle Eastern countries such as Syria and Kuwait. Syrian production benefits from strong governmental support, innovative scenarios and fresh acting talent.

It managed to score major hits, such as Bab el Hara, produced by Al Arsh Productions in 2007. Kuwaiti production benefits from generous budgets and is using Gulf-specific scenarios and talent that are well received in the GCC countries.

Examples of Kuwaiti hits are Al Imbratora, produced by Spoke Centre in 2006. To be noted as well is the Aswar drama, produced by Sadaf from KSA in 2007.

Increasingly, we have been hearing about consolidation. What is your take on this?

AB: First, let's note that there are two dimensions of consolidation that we can talk about. On the vertical dimension, there's integration between buyers and suppliers in the same value chain.

This integration is driven by the ever-critical quest to increase buyer and/or supplier power through the control of distribution channels or supplier networks. We have recently seen this in Egypt with the consolidation of the Nasr/Masa/Oscar group.

With an estimated market share of 20% in film production and 50% in distribution/exhibition, the group is now the largest and most integrated player in the Egyptian film industry.

On the horizontal dimension, there're M&A transactions in various forms and shapes between competitors and/or complementors. While we have not seen much of this in the Middle East yet, we believe it won't take long before it happens.

With new TV channels mushrooming at unprecedented rates that exceed advertising spend growth, a highly fragmented print magazine supply and significant brand extension opportunities in B2B media waiting to be seized, consolidation is a necessity that is long overdue in virtually all the Middle Eastern media sectors.

You mentioned that sitcoms will be more sought after. Which sitcoms are presently doing well in this market?

GC: Tash ma tash comes to mind, and its success and longevity have been widely documented in the press.

However, it is not exactly a sitcom. The first true sitcom attempt in the region was Chabab On Line in 2002.

Since then, we had to wait until 2007 to see a highly successful sitcom such as Ragol wa set Sittat, produced by the Egyptian Media Production City and of which more seasons are expected in the near future.

Tamer wa Shawkiya, produced first by Tarek Nour in 2006, was also a success, especially the second season in 2007. Generally, sitcoms remain marginal in the Middle Eastern scene, but should become more available from 2008 onwards as TV channels seek differentiating content to build viewership and lure advertisers.

Are producers looking at new production formats such as HD?

GC: High definition is certainly a way to produce and deliver TV content with high-quality, movie-like, audio and picture.

However, it is not yet on the map in the Middle East, unlike in Asian countries such as South Korea, where HD is enjoying a very high market share and where many producers offer content exclusively in HD.

This technology is ripe for production use. However, it requires dedicated equipment throughout the production process that is not compatible with traditional formats.

Therefore, producers in the Middle East will not venture into HD unless the number of HD TV channels that will buy their content reaches a critical mass.

TV channels are in turn also prevented from launching HD broadcasts due to the relatively high costs of HD TV sets, which limits their reach and therefore the potential advertising spend they can pretend to.

The regulator has also to play its role by developing the right framework for migration into HD TV that accommodates the interests of all stakeholders, especially with regard to spectrum management.

However, given the fast development of the TV industry in the Middle East, the rapid pace of reform and the generally bullish economic ambience, we believe all these constraints will vanish sooner rather than later, as the combined forces of economies of scale, technology commoditisation and favourable regulation come into play and create a conducive environment for a thriving Middle Eastern HD content industry.

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