Interview: Sam Barnett, MBC

Sam Barnett

MBC is the leading broadcaster in the Middle East and has prospered despite the many challenges facing media players in the region. CEO Sam Barnett talks to Digital TV Europe’s Stuart Thomson about the challenges and opportunities ahead.

MBC has long been the lynchpin of the pan-Arab broadcasting scene and while other Gulf-based broadcasters have made headway with a mix of pay and free-to-air services, MBC continues to lead the way amongst broadcasters appealing to a wide audience across multiple territories.

That success has not come without problems. While the recent history of conflict in the region has had an adverse impact on the strength of the overall advertising market, the performance of MBC and ‘pan-Arab’ media organisations generally have actually remained robust, continuing to grow their businesses, albeit at a slower pace than previously.  Among the longer-term challenges facing free-to-air – and pay TV – broadcasters in the Middle East, however, is piracy. For a primarily free-to-air player like MBC, the main threat to its revenue is the illicit retransmission of content by other satellite-distributed free-to-air channels.

MBC and pay TV provider OSN have been monitoring for copyright infringing material and establishing a process for verification of content by the studios. The pair have recently strengthened their collaboration with other broadcasters, inviting Rotana and ART to join this exercise.

According to Sam Barnett, MBC’s CEO, the fact that attempts to tackle piracy have come to the fore over recent months is a sign of the industry maturing, with rights to distribute content across the Middle East rising in value. “It is really a symbol of our success, of the quality of local production and the vibrancy of the market,” says Barnett.

Piracy disrupts the market in rights, destroying the value of windows for which pay and free TV broadcasters have paid large sums. For free-to-air players, while there are many reasons behind the failure of advertising rates to rise significantly, piracy is clearly one of these. “What piracy does is tend to fragment the market more than would otherwise be the case,” he says, citing the example of movie channel MBC2, which slipped out of the rankings of the 20 most-watched channels in Egypt as a result of illegal retransmission of films. Barnett says that the recent closure of about 15 of the biggest copyright-infringing channels in the country resulted in the MBC movie service bouncing back to number six in the rankings.

Barnett says that education – of regulators, satellite companies and even blue-chip advertisers – is key to tackling the problem. “We have seen blue-chip advertisers put their ads onto channels run by organised criminal groups,” he says. Taking on piracy across 22 different countries with widely differing regulatory regimes is also challenging, he says.

The Broadcast Satellite Anti-Piracy Coalition, launched a year ago, now has a wide support amongst the major players, counting not only MBC and OSN but a growing range of broadcast and business groups among its members and supporters. MBC and others attempt to get the legitimate players to share information, identify infringers, and persuade the satellite operators to take down their signals. “The satellite providers have done most of the work on this. They have said to infringers: ‘you are stealing content from MBC’. If those channels continue to steal content the satellite operators will find a way to end the contract,” says Barnett.

The coalition members also take the initiative in asking blue-chip advertisers not to give business to pirate stations. The coalition has also secured the support of law enforcement officials, for example in Egypt, in closing down illicit channels. Barnett says getting the attention of Hollywood studios has been more challenging than securing action on homegrown Arabic content. He is hopeful that broadcasters will be able to get the studios’ attention when deals come up for renewal. “I’m not prepared to pay for first-run rights when I’m not actually getting those,” he says.

Localisation

Piracy has not, in any case, stopped MBC from building a vibrant and successful business in the Middle East. Barnett says that the broadcaster has an overall audience of around 120 million viewers and a share of 48%, for example, in the Saudi market, so channel fragmentation has not had a significant adverse impact.

One key to the strength of MBC’s business has been to differentiate its offerings to meet the needs of specific markets –notably by launching a dedicated Egyptian channel, MBC MASR, two years ago.

“Egypt was our first major local channel and it was launched at a difficult time. We stuck it through and we have seen good uptake and now have the number one channel in the market,” says Barnett.

MBC, he says, is now looking to take that model further by looking at opportunities in particular markets. “Having shown that it works, we will look at other markets. I see an opportunity in the future to split our feed or to launch local channels,” he says. Delivering a local channel with local content, if backed by accurate audience measurement data, can help deliver profitability. Barnett points to the example of Algeria, where MBC’s channels take a 24% share of the audience but where the company makes no money because the local ad business isn’t substantial. The launch of a localised service here – in a territory that has recently made moves to open up its broadcasting business to outside investors – could make sense.

MBC already re-broadcasts its signal via spot-beams to specific markets as well as pan-regionally. When and where to split its pan-regional feed is a matter that MBC will look at carefully, says Barnett. “The challenge is knowing when to take our broadcast signal down from the widebeam. We need to take a judgment on when to do that,” he says.

MBC has also developed new digital distribution channels – notably its on-demand service Shahid. Barnett says this has grown from strength to strength, particularly since a recent refresh of the service that has seen its audience rise to 12 million unique users and 110 million media views a month.

“We’ve been pleased with Shahid. We’ve revamped it and seen it come into its own,” he says. “As the technology develops it’s becoming more usable. A lot of the traffic comes in through smartphones and so we are making sure whatever app people have gets access to the content.”

The basic Shahid service is free catch-up, but MBC plans to launch a premium offering “at some point”, says Barnett.

The other major area of focus for the broadcaster, however, is sports. While rights to international and European national leagues have been tied up by Sovereign fund-backed broadcasters with deep pockets, MBC has seen an opportunity to build on the value of more affordable local rights. In August the broadcaster captured the broadcasting rights to the Saudi football league. “This is widely popular and widely followed. We have also the rights to more than half of the Egyptian league exclusively,” says Barnett. “I think we are at the beginning of all this. We are focusing on the Saudi and Egyptian leagues and there is a lot of work to do to improve the quality of broadcasting of those.”

MBC’s investment in local sports rights is part and parcel of a wider emphasis on local content. While the broadcaster continues to air a mix of international and Arabic shows on its main channels, it has placed a much greater emphasis in recent years on sourcing local shows and local versions of international formats across a variety of genres.

“I think the correct mix always changes, but one thing we have done over the past few years is to reduce the proportion of western content and bring in more local content, including drama comedy and telenovelas,” says Barnett. “This is, in part, a sign of the strength of the market in the Middle East and it is having an impact on our channels. If you look at MBC Action, in 2007 it was based on western series, but now it is all about local shows and mixed martial arts and so on, all based in the Middle East.”

Challenges such as content piracy are symptoms of success rather than failure. With a continued focus on delivering content that is relevant to local audiences, combined with the strength of its pan-regional presence, it seems likely that MBC will continue to prosper.