Show and tell

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Appointed president and CEO of Showtime in November 2006, Marc-Antoine d'Halluin has in the proceeding period overseen the biggest corporate shake-up in the 12 year history of the pan-Arab pay TV broadcaster. Aaron Greenwood spoke to the man charged with revitalising one of the Arab world's most recognised media brands.

In the face of rapidly shifting market dynamics, including increased fragmentation due to the continued influx of satellite free-to-air (FTA) channel operators in the region, Marc-Antoine d'Halluin and his team, upon their appointment, were charged with the task of transforming Showtime into a leaner, meaner, more competitive machine with a more sophisticated marketing and programming strategy.

From the outset, d'Halluin recognised the significant challenges that lay ahead of them.

"The previous management team had achieved a number of important goals, but like any other team installed in a position for so long, they missed some things," he says. "Undoubtedly, our biggest challenge has been adapting to the evolving dynamics of the marketplace. The industry has grown so rapidly - particularly the FTA sector - which has presented significant challenges for our business.

Launched in 1996, Showtime forged a successful path over the next decade offering a swathe of predominantly English-language content and premium first-run movies, albeit at a premium price compared with the service offerings of regional archrivals ART and Orbit.

Despite reportedly attracting in excess of 170,000 subscribers by the end of 2006, D'Halluin is the first to concede that by this time, the Showtime formula had grown stale and was lacking focus.

"We had to go back and assess our strengths and adapt to become more of a fast-paced reactionary organisation, and to ensure every aspect of our business was commercially relevant," he explains. "We also had to ensure we set a pricing strategy that reflected the true value of our programme offering.

Indeed, in a region where pay TV operators have struggled to crack double-digit percentile penetration, d'Halluin quickly realised the challenge lay not just in competing with rival service operators, but building a justifiable business case to attract new subscribers in one of the world's most densely populated FTA broadcast markets. He also recognised that Showtime's existing programming strategy simply didn't cut it.

As a result, the company settled on a multi-pronged strategy which called for the creation of new channels, the introduction of interactive services based on the latest ‘push' technology and a renewed focus on premium content offerings and the reorganisation of existing programme content.

Following a frantic six months of activity, the company reached the first significant milestone in the implementation of this strategy, with the launch of its re-branded channel line-up under the ‘Show' banner in April last year.

"From the outset, I realised we had been underselling the Showtime brand in the marketplace," concedes d'Halluin. "There are literally hundreds of FTA channels in this region and we are competing directly with two rival pay TV operators for a relatively small share of the overall market.

"In such a crowded sector, it's hugely important to promote your core attributes under a single brand. Twenty ‘Show' branded channels generate more of an impact with subscribers than the previously diffused service offering. It's proving a key dimension for us in this multichannel environment.

The broadcaster also reorganised its premium subscription offering to include new push video-on-demand (VOD) services accessed via a digital set-top-box branded ShowBox.

The introduction of the new services, which included 15 pay-per-view movies, an electronic programme guide (EPG) and a range of near-VOD content, reflected the broadcaster's strategy of bringing new technology to market "at a pace that matches consumer expectations", says d'Halluin.

"The on-demand services have provided us with a competitive edge in the marketplace and it's a technology that has been embraced by our subscriber base," he adds.

While the rebranding strategy symbolised an important commercial shift in focus for the organisation, of greater importance was the revelation that it had snared the rights to air English Premier League (EPL) matches for the next three seasons, beating out former Middle East EPL broadcaster and archrival ART in a reported US$120 million deal.

D'Halluin, who boasts of extensive high-level management experience in the European broadcasting sector, is largely credited for this significant coup. He says securing the EPL deal represented a watershed moment in the history of Showtime, and believes it forms a lynchpin in the broadcaster's long-term strategy for domination of the regional pay TV sector.

"Looking back on 2007, I believe our achievements - particularly in regard to securing the rights to the EPL - have provided us with a really solid footing to take the company to the next level," he says. "Despite the significant cost of acquiring the EPL rights, the deal has already paid off commercially. It has enabled us to reconnect with our audience by providing a more balanced programming line-up.

While boasting of "significant growth in the vicinity of 25-30%" in 2007, d'Halluin refuses to divulge exact figures regarding subscriber numbers, nor a country-by-country breakdown of the broadcaster's audience spread.

What he will say however, is that the broadcaster's biggest markets remain the traditional pay TV strongholds of the UAE, Saudi Arabia and Kuwait, while the massive but underexploited Egyptian market trails in fourth position.

Some critics have argued that the biggest barrier to Showtime's commercial growth is its costly subscription charges. Indeed, the broadcaster's premium package, Showtime Platinum, is priced more than 50% higher the equivalent package offered by Orbit.

While acknowledging this fact, d'Halluin repeats the mantra that premium content demands premium subscription rates.

"The rate of growth in our subscriber base over the past 12 months is even more remarkable given the fact our package prices are considerably higher than those of our competitors," he adds.

On the flipside, d'Halluin argues that higher subscription rates actually improve the broadcaster's ability to attract the support of premium consumer brands looking to promote their goods and services on the network.

"As a pay TV operator, you'll never match the audience numbers of your FTA rivals," he concedes.

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