The guide

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The emergence of media cities, such as twofour54, has reduced the operating costs in the region for broadcasters and the supporting industries.

With several hundred channels, a blossoming network of broadband connections and the highest cellular service penetration in the world, the Middle East content delivery market offers lucrative rewards. Digital Broadcast presents a comprehensive guide to doing business in the region.

The Middle East broadcast industry is a complex beast. Although an estimated 300 million people share the same first language in the same location, or at least the same satellite footprint, a situation only repeated in the Indian and Chinese markets, many of the industry’s major manufacturers have a low-profile presence in the region.

There is no shortage of business in the Middle East. The number of free-to-air channels in the region is estimated to have reached the grand total of 474, according to a report published by the Arab Advisors Group in June of this year.

The MENA pay TV market may be small compared to other regions but it is certainly competitive, and this competition is driving innovation.

This proposition should be equally enticing to those looking to licence existing channels to the region or to launch new stations. Vast, TV loving audiences, the wealthy Gulf market, early adopter status in the consumer electronics market… the list goes on.

Many venture into the region unaware of several of the unique challenges and conditions that are at play in the Middle East.

International channels looking to spread their brand and take a share of the advertising revenues in the region, often underestimate the effect that a lack of audience monitoring has in the region.

According to figures from the World Advertising Research Centre, the 2006 ad spend per capita (across all media) was US $886 in Hong Kong, $542 in the United States and $267 in Japan. This compares favourably to Gulf States such as Qatar ($287), however the larger markets in the region fare less well. Egypt mustered just $10 in ad spend per person and the Saudi market only $39.

Competition for these dollars is fierce and channels hoping to take a share with tired, untailored content will be disappointed.

For broadcast technology vendors, adding a Middle East office location to the contact details of their website, might seem like a good way to buy some prestige and boost their international profile. It is not an efficient way to win clients in the region, however.

Support and maintenance are high on the list of the regional broadcast technology buyers with several high profile technical heads in the Middle East stating that vendors have often left them feeling isolated after the implementation is over.

“It’s not just a matter of them having someone available in a call centre, the support has to be physically located here in the region and that is something we consider very carefully,” says Abdul Hadi al Sheikh, managing director and CEO of broadcast and production service provider, LIVE. “Unfortunately, this market has not quite matured yet and people rely on the agency [distributor] model. The reality is that they are often a barrier between us and the vendor, an unnecessary layer.

“It’s not enough for them to deliver some boxes and then leave,” adds al Sheikh. “There are so many things that could go wrong you have to ensure that you have the right partner, one that will work with you to ensure it is a sustainable project, using the right system that continues to work efficiently after installation.”

The presence of locally based technicians and a sufficient supply of spare parts is not only convenient, but ultimately protects the broadcaster or service provider’s business.

“If you have a damaged piece of equipment you send it to the local distributor, they send it to the manufacturer and then it could be moved on to a separate service centre, which might be in North America or Europe. All this time – at the end of the day – is money lost and ultimately it damages the customer,” explains al Sheikh.

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