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[Satellite News 08-24-09] The Arab Advisors Group believes that free-to-air satellite TV advertising rates in the Arab region are low compared to other global markets due to the lack of an agreed-upon audience measuring system that diminishes the bargaining power of the popular TV stations.
In 2009, ad rates on free-to-air satellite channels in the region were at their highest level at an average rate of $3,362 for a 30-second advertisement during peak times between 9 p.m. and 10 p.m., according to Arab Advisors Group’s report, “Satellite TV Advertising Rates in the Arab World 2009.” The study, which looked at advertising rates across 35 free-to-air satellite TV channels, found peak average advertising rates of major free-to-air satellite channels were 25 percent higher than in 2007, when rates stabilized slightly above those of 2005 and below those of 2004.
“General channels, movies and series, news, and current affairs channels have the highest average advertising rates amongst the channel types,” Arab Advisors Senior Research Analyst Danya Nusseir said in a statement. “The reasons why these channel types have considerably higher advertising rates than the rest of channels could be attributed to a number of factors such as: high viewership and wide variety of content.”
In June, Arab Advisors released a study showing that the number of free-to-air satellite TV channels in the Arab World grew nearly 30 percent growth in 18 months.
The total number of free-to-air channels broadcasting on Arabsat, Nilesat and/or Noorsat was 474 at the end of March, according to the study, “Satellite TV in the Arab World 2009.” The highest numbers of channel types were in the private sector followed by government sector general channels. Nearly 19 percent of these channels are located in Saudi Arabia.
“Of the 474 channels, 46 were in test transmission mode. 82.7 percent of the 428 fully launched and operational [free-to-air] satellite channels broadcast exclusively in Arabic. The remaining languages lag far behind the Arabic language. English follows with a 7.2 percent share,” said Nusseir.
Despite the boom in the supply of free-to-air channels in the region, Arab Advisors said that few popular channels are emerging and that the existing programming is not retaining an adequate share of the region’s viewer base, resulting in satellite-TV providers having weaker bargaining power with advertisers. If Arab Advisors’ assertions turn into long-term trends, it could create difficulties for upcoming platforms planned for the region.
In April, SES Astra teamed up with Yahsat to create YahLive, which is aiming to offer DTH television capacity and services to free-to-air and pay-TV broadcasters in more than two dozen Middle Eastern and Asian countries. It will own and commercialize 23 Ku-band transponders on the Yahsat 1A satellite that will be positioned at 52.5 degrees East. The satellite, procured from a consortium of EADS Astrium and Thales Alenia Space, is under construction and is scheduled to be launched by the fourth quarter of 2010.
“This partnership will establish a major business hub for SES Astra in the Middle East and will add a new dimension to the existing strong regional presence of SES through the satellite operator SES New Skies and the system integrator ND SatCom. The region is a market with significant growth potential as the fill rate of the Ku-band capacity is estimated at 90 percent, while demand is expected to grow faster than supply,” Ferdinand Kayser, CEO of SES Astra, said in a statement.
Patrick French, senior analyst at NSR, said that Yahsat’s challenge is to get deals with broadcasters and content providers and maintain audiences. “Announcing a video hotspot does not make it a video hotspot. They still have work to do to get broadcasters to go there. It will only be a threat to Nilesat and Arabsat if they are successful. They have built the playing field, but now they have got to get the audience to come. It will be a smart move if it works out. It is really hard to tell how partnerships will do in practice,” he said.
Arab Advisors said while the Middle Eastern broadcasting market seems to be in good shape, with Nilesat and Arabsat in control of capacity reserves for new satellites, the question of whether advertising revenue will downpour or trickle remains dependant on audience demand. The latest trends in 2009, however, are not as strong as regional operators hoped.
In 2009, ad rates on free-to-air satellite channels in the region were at their highest level at an average rate of $3,362 for a 30-second advertisement during peak times between 9 p.m. and 10 p.m., according to Arab Advisors Group’s report, “Satellite TV Advertising Rates in the Arab World 2009.” The study, which looked at advertising rates across 35 free-to-air satellite TV channels, found peak average advertising rates of major free-to-air satellite channels were 25 percent higher than in 2007, when rates stabilized slightly above those of 2005 and below those of 2004.
“General channels, movies and series, news, and current affairs channels have the highest average advertising rates amongst the channel types,” Arab Advisors Senior Research Analyst Danya Nusseir said in a statement. “The reasons why these channel types have considerably higher advertising rates than the rest of channels could be attributed to a number of factors such as: high viewership and wide variety of content.”
In June, Arab Advisors released a study showing that the number of free-to-air satellite TV channels in the Arab World grew nearly 30 percent growth in 18 months.
The total number of free-to-air channels broadcasting on Arabsat, Nilesat and/or Noorsat was 474 at the end of March, according to the study, “Satellite TV in the Arab World 2009.” The highest numbers of channel types were in the private sector followed by government sector general channels. Nearly 19 percent of these channels are located in Saudi Arabia.
“Of the 474 channels, 46 were in test transmission mode. 82.7 percent of the 428 fully launched and operational [free-to-air] satellite channels broadcast exclusively in Arabic. The remaining languages lag far behind the Arabic language. English follows with a 7.2 percent share,” said Nusseir.
Despite the boom in the supply of free-to-air channels in the region, Arab Advisors said that few popular channels are emerging and that the existing programming is not retaining an adequate share of the region’s viewer base, resulting in satellite-TV providers having weaker bargaining power with advertisers. If Arab Advisors’ assertions turn into long-term trends, it could create difficulties for upcoming platforms planned for the region.
In April, SES Astra teamed up with Yahsat to create YahLive, which is aiming to offer DTH television capacity and services to free-to-air and pay-TV broadcasters in more than two dozen Middle Eastern and Asian countries. It will own and commercialize 23 Ku-band transponders on the Yahsat 1A satellite that will be positioned at 52.5 degrees East. The satellite, procured from a consortium of EADS Astrium and Thales Alenia Space, is under construction and is scheduled to be launched by the fourth quarter of 2010.
“This partnership will establish a major business hub for SES Astra in the Middle East and will add a new dimension to the existing strong regional presence of SES through the satellite operator SES New Skies and the system integrator ND SatCom. The region is a market with significant growth potential as the fill rate of the Ku-band capacity is estimated at 90 percent, while demand is expected to grow faster than supply,” Ferdinand Kayser, CEO of SES Astra, said in a statement.
Patrick French, senior analyst at NSR, said that Yahsat’s challenge is to get deals with broadcasters and content providers and maintain audiences. “Announcing a video hotspot does not make it a video hotspot. They still have work to do to get broadcasters to go there. It will only be a threat to Nilesat and Arabsat if they are successful. They have built the playing field, but now they have got to get the audience to come. It will be a smart move if it works out. It is really hard to tell how partnerships will do in practice,” he said.
Arab Advisors said while the Middle Eastern broadcasting market seems to be in good shape, with Nilesat and Arabsat in control of capacity reserves for new satellites, the question of whether advertising revenue will downpour or trickle remains dependant on audience demand. The latest trends in 2009, however, are not as strong as regional operators hoped.
Related Stories-
Satellite TV Channels on The Rise in Middle East [Satellite Today 06-15-09]
Analysts Not Surprised by Yahsat/SES Astra Link-Up [Satellite News 04-22-09]
SES Astra and Yahsat Form DTH Joint Venture [Satellite Today 04-21-09]
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