While Orbit struggles to drive subscriber numbers, new players such as Etisalat are preparing to enter the Middle Eastern multichannel broadcasting business. Interspace surveys current developments…

On top of the existing competing efforts of four DTH pay-TV platforms (Orbit, Showtime, ART and Star Select) there are signs that other changes might be in store within the Middle East broadcasting scene.

As recent interviews in Interspace have shown, some players have stated they are in a healthy position with regard to market share and rising subscriber base. Showtime, the KIPCO and Viacom-backed joint venture, is in such a position, while News Corp-backed Star Select also reports all is well with its numbers. At the recent Mipcom market in Cannes, Showtime’s president and CEO Peter Einstein confirmed the service was well-placed to enjoy significant expansion this autumn, thanks to increased sales activity in Morocco, Egypt and the Lebanon.

Rome-based Orbit, however, according to unconfirmed reports, has gone into negative growth. All attempts by Interspace to contact the company have failed. One industry insider, very close to Orbit, this week said that "the patient, long suffering, seems in slow decline." Recent transmission shifts from Intelsat to ArabSat, designed to boost signal reception and help Orbit subscribers add the huge number of free-to-air channels already available on Arabsat, have not helped progress Orbit’s subscription drive.

One argument suggests the important autumn selling season will help subscriber numbers to pick up (many Arab viewers retreat to Europe during the stiflingly hot summer months). However, Orbit has not helped itself by what it admits were "service outages" with interruption in transmissions at the beginning of the month.

There are other developments afoot, not least the on again/off again launch of the Sara Vision/Al Rawwad MMDS system in Saudi Arabia. An expected October 16 "soft launch" failed to materialise. Perhaps the next most important launch is Etisalat (the Emirates telephone company) which has promised to start service on December 2 with the region’s first true broadband cable-delivered TV and internet service. Etisalat had its cable TV PPV staff in Cannes attempting to secure channels and programming content. One hundred channels are promised. One stumbling block, besides the many exclusive channels deals already in place, is the UAE’s attitude to censorship.

The UAE is undoubtedly a pretty free and easy sort of place to do business, especially when compared with Saudi Arabia. The UAE has a cosmopolitan mix of nationals and guest-workers pretty much left to do as they please. But when it comes to redistribution of DTH signals the prospect of Showtime, Star Select or Orbit’s signals being passed through ‘semi-official’ Elisalat’s cable network untouched seems remote.

Each platform broadcasts a certain number of programmes that in adjacent Saudi Arabia would be prohibited. Programmes like Baywatch and much of MTV’s output would fall foul of Saudi censors. There is also a significant amount of soft porn, whether in the shape of Playboy-backed Red Shoe Diaries or more straightforward late-night erotic fare. Etisalat would be expected to severely censor these shows with the ‘interrupt’ button pressed near-continuously.

This censorship is needed so that Etisalat can be seen to provide only such material that meets basic Islamic standards of decency. So far such taste and decency problems have not been a major hurdle for other retransmission systems elsewhere in the Gulf states. For example, Bahrain and Qatar, both with MMDS re-transmission, say they have no major problem with censorship.

But now certain programming insiders believe that Islamic values are being brought into the bargaining equation. One specialist this week spoke of gentle manoeuvring to outline the sort of problems that might befall studios and channels which did not allow their services to be carried on cable. Licences could be revoked (broadcast, as well as the right to trade within the Emirates), DTH decoders outlawed and life generally made difficult. The prospects of any of these being implemented are not seen as serious by Western studio staffers, who have ridden out similar dish bans from Saudi Arabia. Nevertheless, regulation in the region is highly volatile and liable to sudden change and it would be a foolish rights-owner who said "never".

Etisalat is seen as having a further agenda. It is said to want to be the programming rights-controller for the local region, including Qatar, Kuwait, Bahrain and in particular Oman. Etisalat is building a high-capacity fibre backbone linking the UAE with Oman’s main cities and towns and bidding for the right to supply entertainment content over those wires into the Sultanate.

Each of these indigenous States would have reservations about dealing with Etisalat but there is no doubt the UAE could have considerable clout at the negotiating table, especially with – in percentage terms – the largest dish-audience in the region, and an established legal and commercial infrastructure already highly appreciated by ‘Western’ companies. Dubai is natural home for the regional advertising and creative agencies, and what better way to cement influence in its emerging media-related activities than through control over incoming content?

Etisalat is also backing (with a 35.9 per cent stake) Thuraya, the Abu Dhabi-based satellite phone project (a GEO craft operating in L-band) scheduled to launch in June 2000, which aims for 400,000 sat-phone customers by the end of 2001. Quite where these subscribers will come in the light of the Iridium/ICO debacle is difficult to envisage, but the $1.1 billion project is fully financed.

Meanwhile, Dubai is the production base for at least two rival groupings planning new channels launches. EDTV, the long-established satellite broadcaster, is behind a handful of emerging channels (EDTV Sports, news and others launching this winter) while a rival outfit is proposing a similar clutch of channels under the Al Arabiya banner, scheduled for late next year.

These quite different elements could well create a new broadcasting paradigm for the Gulf. There is one other factor to consider. The Lebanon, already home to two giants in Middle-East free-to-air broadcasting (LBC and Future TV), is about to see another two or three channels get satellite distribution. They will place further pressure on the pay-TV operators, and suck even more advertising cash out of the terrestrial scene.