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With increase in broadband speeds and particularly among the young and mobile, consuming content on a platform other than TV — and at their time of choice — is becoming the vogue. But for TV broadcasters and direct-to-home (DTH) content providers, that does not necessarily mean a good thing. (A lower or fractured share of audience will mean that broadcasters have less leverage on the rates they can charge advertisers on commercials.)
“Consumers are finding some video content cheaper or even free on the web versus premium priced content providers who will inevitably suffer more in the future,” said Cliff Nelson, CEO of My-HD, which was launched in 2012 and has since built up a 100,000 strong subscriber base.
But with HD broadcasting becoming the norm in the region, Nelson believes broadcasters and DTH platforms have got some additional space to corner growth. “Currently, satellite is definitely more affordable and reliable than IP for HD delivery; HD transmission requires 6-12 Megabits a second per channel which is a lot of bandwidth, and most countries in this region don’t offer that kind of consistent bandwidth via IP.”
My-HD lists 44 HD-enabled channels on its platform out of 55 channels, and sweetens the proposition by pricing at the lower end of the spectrum.
“We believe that the premium priced pay-TV model has limited potential; in the Middle East it has a very niche audience who can afford or are willing to pay exorbitant monthly fees,” said Nelson. “The existing premium platforms cater to less than a few percentage of TV households across Mena and that hasn’t grown much during the past few years.
“We don’t expect it to grow further, the premium sports platforms excluded.”
From an advertiser’s perspective, the Middle East’s TV viewing habits are such that multiple platforms can exist, each with its defined audience. “Unlike in the West, TV viewing in this region is family-centred and makes up a lot of the time families spend together,” said Ali Asghar Mir, managing director at Integrated Advertising Services. “It’s unlikely that a sea change will happen unless we skip a generation or two.
“Web TV stands a better chance in markets where the youth demographic is higher and broadband speeds are optimum... Saudi Arabia and the UAE for instance. But traditional TV will still command a committed viewership.”
For Arabic channels, there is one significant advantage — the majority are free-to-air and that instantly makes them an integral part of an Arab household.
“There was a time in the recent past when it was felt by many that cinema viewership numbers would see dramatic reductions because of wide-screen TVs and DVDs/Blu-Ray,” said Mir. “But new multiplexes keep getting built and promotions such as Bollywood stars on hand for the launch have boosted crowds at a cinema. Much the same should happen with TV viewership in the region. Traditional TV, DTH platforms and web TV can co-exist.”