David Butorac, CEO of Orbit Showtime Network, on the future of pay TV
Pay TV has been available in the Middle East for nearly two decades but in the past year alone, Orbit Showtime Network (OSN) has increased its subscriber base by a whopping 30 percent. According to CEO David Butorac, the company’s exceptional growth is being driven by increasing wealth in the region, a crackdown on piracy and advances in technology. In turn, the rising revenue is freeing up money for further investment, attracting even more subscribers.
“What we’re seeing is a rapidly accelerating acceptance of pay TV,” Butorac tells Arabian Business.
“The second thing is that our shareholders invested $60m to create a secure platform, i.e. the set-top box is a secure technology which is not compromised — you need to be a subscriber to watch. Previously it had been compromised so people could watch our signals without paying, now they can’t. So those two contributing factors led to the start of that growth.”
Then came the snowball effect; with increased revenue from more subscribers, OSN has been able to invest more in new channels and programmes as well as technology, enticing even more consumers to take up the product.
“What has contributed significantly in the last 12-24 months is the investments that we’re making in content,” Butorac says, declining to reveal how many subscribers the network has. “We spend hundreds of millions of dollars a year on content and we will continue to accelerate that so we can grow, bring the very best content and as the [customer] base gets bigger we’ll continue to bring more and more content so that people really have the best option.
“Ultimately, people subscribe to pay TV to watch television, to watch content. What they expect of us is to make sure that we give them the best content and we’re increasingly investing to make sure that we do just that.”
Even more investment came in the form of the purchase of Pehla Media & Entertainment last month. A major South Asian content provider, the move will see OSN launch 40 Pehla-branded channels as it looks to continue attracting the millions of Asian expats who call the Middle East their home.
This year has been the best on record so far and Butorac only sees it getting even better.
“June was the biggest month ever in sales, March was also the biggest month ever in sales [at the time], January was the biggest month ever in sales; we’re accelerating this growth curve by passing our sales targets month on month and business is rapidly growing,” he says.
“We would expect to see those sorts of growth trends continuing; when you look at the available market and the TV households and indeed the premium TV households, we’re still at a relatively low penetration level. We still see further rapid acceleration.”
The subscriber growth also has helped to stave off an initial public offering (IPO). The company had announced it was considering an IPO but Butorac dampens down any suggestion it will take place any time soon. OSN had been obliged to make a public statement because its co-owner, KIPCO, is a listed company.
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