Internet protocol TV yet to make a mark in Gulf

Dubai: Although internet protocol TV (IPTV) is growing fairly quickly in the Middle East and North Africa, albeit from a very low base, satellite is still dominant in the region, experts say.

There were 79.9 million TV households in the Middle East and North Africa (Mena) last year. Satellite TV dominated, being the primary TV service in 65 per cent of Mena TV households. Some homes, particularly in the Gulf states, either have two dishes or a dual LNB (amplifier) to take signals from two satellites.

There were more than 500 free-to-air (FTA) satellite channels as of first half of this year; up from just 100 in January 2004, although the signs are that the rate of growth is slowing.

Vicious circle

"The major players feel obliged to launch thematic FTA channels as their core services come under threat from audience fragmentation. With so many FTA channels on offer, the incentive to subscribe to a pay platform diminishes," Hadi Raad, principal analyst at Booz and Co, said.

So, while there are several positive factors emerging in the region's TV sector, the composition of the FTA market can still create something of a vicious circle: too many choices means lower average reach per channel, followed by decreasing average ad revenues. Higher programming costs and decreasing revenues means greater losses, which leads to lower quality programming that again decreases average reach.

Kasia Kieli, president and managing director of Discovery Networks, CEEMEA (Central Eastern Europe Middle East and Africa), said growth of HD is forecast to reach 287 million by 2015 from 174 million today while growth in 3-D-ready TVs across Mena is predicted to hit 3 million homes by 2015.

She said Saudi Arabia has the region's heaviest viewers (5.2 hours), followed by Serbia, Hungary and Turkey.

3-D programmes

3-D content and viewing is gaining popularity in the region, she said and added that Discovery is currently building a catalogue of 3-D programmes and is happy to promote and supply the content.

"Etisalat expects to have more than 50 content partners and over 10 premium content partners and at least 100 movies by end of 2012 on eLife," Rashid Al Abbar, vice-president, home products marketing, etisalat, said recently.

In the UAE, there were 175,000 cable users, 423,000 direct-to-home users, 353,600 IPTV users and 995,170 broadband users in the second quarter of this year.

Etisalat has more than 100,000 eLife customers.

Informal estimates are that Middle East users generated just over 1,500 petabytes (PB) of traffic in 2010, which will rise to 12,809PB in 2015.