[Satellite News 02-16-10] The Middle East broadcasting industry would like to believe that its HD market is at the start of a regional growth curve. However, industry leaders at Arabsat’s Broadcasters Forum in Beirut, remain concerned about how quickly consumers will embrace HD and the ability to produce a profit.
    Arabsat CEO Khalid Balkheyour told the forum that he expects the Middle East will see a steady increase in HD content “We expect to have 20-to-30 HD channels on our satellites over the next two-to-three years. We believe governments and the private sector will drive the move to HD in the region.”
    The Middle East already has a fair selection of HD content available on the market. Orbit Showtime has three HD channels, Arabsat hosts Oman TV and LUXE TV in HD, and Nilesat offers Dream TV and two Al Jazeera Sports stations to its HD subscribers.
    Arab Advisors Group senior research analyst Issa Samir Goussous told Satellite News that the region has strong potential to expand its HD environment in 2010 with even more movies and sports channels. “We believe that, despite their high installation and operational costs, the number of HDTV channels will noticeably grow in 2010. This could be confirmed by the fact that more households in the MENA region have become equipped with the TV sets necessary to receive and display HDTV channels. HDTV set models are becoming more affordable due to competition among vendors. By February, the total number of HDTV channels targeting the Arab world amounted to eight, three of which are newly-launched pay-TV channels offered by OSN,” said Goussous.
    NSR senior analyst Patrick French agreed that while 2010 may be the pivotal year for HD in the region, the industry would not see positive results for some time. “The process of launching HD channels is not a matter of days or months but of years. While 2010 may well be remembered as the time that HD started in the region, it will still take some time — maybe two-to-three years — before large amounts of HD channels are widely available,” he said.
    Riyadh Najm, chairman of the Arab States Broadcasting Union (ASBU) told the forum that while the Middle East HD market is still playing catch-up, electronics consumers are showing signs of excitement and acceptance of new technology. “Widescreen displays are now becoming much more prominent in the Middle East. We believe the private sector and governments could be the driving forces behind HD.”
    EchoStar Vice President Robert Lakos said the Middle East could learn from the history of HD adoption in other global regions. “It has all been about commercial advantage in the United States, and I think there are the same tremendous prospects for HD in the Middle East,” he said.
    Goussous said he has been looking at free-to-air (FTA) television as a solution. “The average advertising rates for major FTA satellite channels in the Arab world are increasing. Major general FTA channels, such as LBC and Future TV, also show an increase in their average ad rates and peak advertising rates,” said Goussous.
    However, panelists also said time is a factor for HD adoption in the Middle East, and revenues derived from TV advertising across the region will play an important role in forecasting the industry’s health. With widely contrasting advertising revenue figures given from both the audience and the panelists, the consensus seems to be that TV advertising revenues need to improve if widespread investments in new HD channels are to happen.
    Yousef Mugharbil, president of Saudi broadcasting company Rotana Digital Media, told Satellite News that the Middle East should be cautious not to let the hype surrounding the HDTV industry blind its projections. “It took a long time for it to take-off in the United States and Europe. It will take some time for it to have an impact in the Middle East. We have some HDTV channels in the region with some broadcasters and will continue to look at it, but I don’t anticipate HDTV channels to be a mass market in the region. In addition, I anticipate the service to be a mix of FTA and pay-TV depending on the business rationale for each broadcaster. Therefore, it will be a cooperation between broadcasters and satellite operators, content owners, and others in order to allocate capacity or unique content.”