Martin Stewart, CEO of OSN. Photo: OSN.uld OCou

OSN could launch an Ultra-HD offering by the end of the year, OSN CEO Martin Stewart told Via Satellite in an exclusive interview. OSN is one of the largest buyers of capacity in the Middle East. It has around 14 transponders at the moment, and Stewart believes that there is enough spare capacity if OSN wanted to launch a 4K offering later in the year. However, Stewart said OSN’s focus is putting out more HD content over the next 12 to 18 months.

Currently, OSN has around 65 HD channels. “I think there is still capacity room for us to improve on that front. That will be the primary focus. I have seen a lot of the developments over the last few years from a technology point of view haven’t really run through the market like [Personal Video Recorders] PVR, HD, connection of [set-top-]boxes to the networks — all of those things, we will focus on them. Because we want to make sure customers use the functionality we have already given them. We will see about 4K later in the year,” Stewart said.

OTT

One of the challenges facing any satellite pay-TV operator now is coping with the emergence of Over-The-Top (OTT) television and technologies. The Middle East, in particular, seems a region that is primed for growth in OTT with strong fiber networks in many countries. Stewart believes OTT will be successful, and it will be up to OSN to come up with a winning strategy.

OSN has launched a service called WAVO, a hybrid offering of linear channels, and more Subscription Video on Demand (SVOD) offerings. Stewart admits that the operator sees OTT “as a big part of the future.” OSN believes services such as WAVO will be a big attraction to its subscriber base over the next three to five years. It will be particularly important in markets such as Saudi Arabia, Egypt and North Africa.

“It gives us a way to penetrate those markets in a way that consumers want. We have a very young, tech savvy, Millennial-based population across the region and they consume content in a different way. Traditional linear offerings won’t cut it with them in the future. Customers want OTT-based services that will primarily be available on mobile. I think the future for the industry and us is a mobile one,” said Stewart. “There are a number of things to overcome to make that a reality but mobile is the one big winner in the future. We can complement those subscribers and distribution with satellite and traditional IPTV. But this is going to be a mobile market.”

However, it is clear that OSN is looking beyond just traditional satellite pay-TV. WAVO is already an indication of the direction it is going, but this will not be the only major product launch the operator is involved in. “We are heading down a world where mobile delivery will be of paramount importance to us. In addition to WAVO, we are about to launch ASLI, which is the first short-formed curated content platform for the region. It will appear on WAVO for free and it will highlight all the wonderful content creators that this region has to offer. You are talking about people who have millions of followers; they will be major content creators in the future. This is a way that OSN will differentiate itself in the future,” Stewart added.

It is clear that Netflix is disrupting things for traditional pay-TV heavyweights. “I think they have reminded everyone that the customer is king. They focus on the customer experience, and on direct feedback on what customers are watching,” said Stewart. “They use that data to provide an even better service to subscribers. The other thing that they have changed is that fundamentally I see Netflix as a studio, but what is different about them is they are selling directly to customers rather than going through a third-party distributor. We are working with Netflix. It is important for us that if that customer is in our world, they can watch that content, whether it is Netflix, Paramount, or Disney — the key is they can watch it from an OSN box.”

Satellite Capacity Needs

With initiatives such as WAVO and a belief that OTT will make a strong impact in the region, it begs the question: will pay-TV operators such as OSN use more or less satellite going forward? What will be their future demands for satellite capacity? Stewart says he doesn’t think OSN will be using much less capacity but adds, somewhat ominously, that whether it will be using a lot more remains to be seen. Stewart believes it is about making sure the operator rationalizes the services so it can make best use of the capacity it has got.

“It is an interesting time regarding the deals we have for satellite capacity. A lot of the satellite deals are up for renewal over the next 18 months. We will be sitting with our various partners to discuss what is best for us, and best for them. We will plan our three- to five-year needs. I think satellite is always going to be important,” he added, when pressed on whether OSN was in the market for more capacity.

However, because it operates across many countries in the Middle East and North Africa, it is difficult to make apples-to-apples comparisons. Stewart points to the fact there are countries like the United Arab Emirates (UAE), which has a highly developed broadband infrastructure, but that this is not true everywhere else, and broadband infrastructure is developing at different speeds across the region.

“I think satellite will have a very important part to play in the region as a whole, so you can have ubiquity of coverage. Satellite is also the only way to distribute Free-to-Air (FTA) channels across the entire region. It is always going to have a strong position. I think for us as a company, given the competitive challenges that we face, we need to have an offering that is distinct, and that is clearly understood in the minds of consumers,” he added.

What Next?

OSN operates in well over 20 countries in the region. Some markets are well-developed; some are not. In terms of which markets offer most opportunity for the operator going forward, Stewart highlighted three regions to look out for, the first being Saudi Arabia, which is a very well-developed market with high levels of income and good infrastructure. He believes there is a huge propensity to consume content in all forms. The second one Stewart mentioned is Egypt, due to the sheer size and scale of the market. He doesn’t believe anyone has really cracked this market from a pay-TV proposition yet. Finally, he talked about the whole of North Africa, which is also completely new territory. OSN is working to develop its French language content and its subtitling to penetrate that market, he added.

In terms of technology investments, OSN will be bringing a couple of new set-top boxes to market. OSN will also be investing in a new digital head-end platform so its streaming capability will be state-of-the-art. “We will be looking at the data we will be gathering from customers and how we can surprise and delight those customers in real time. That is the really big change that companies like ours are going through. You have to be at the point where a lot of the new OTT competitors are and that is being able to use data in a way that really allows you to be very precise when offering the best customer experience possible, almost on a one-to-one basis,” said Stewart.