OSN: The Battle with Digital Media is Over

IBC

The CEO of Dubai-based UAE pay-TV network OSN reveals OSN will launch an Ultra HD channel in 2016. He believes mainstream TV is far from dead and that OTT is not a threat but an exciting opportunity. 

“The battle with digital media is over,” he says. “We are delivery systems for content.”

David Butorac spoke to IBC ahead of his keynote at IBC2015. http://www.ibcce.org/page.cfm/action=library/libID=14/libEntryID=360/listID=2

At IBC2015 you are keynoting the topic 'Broadcasting in an era of Challenge'. How do you respond to that idea?

The industry is going through one of its most exciting phases ever. I am old enough to have lived through the day when the introduction of multi-channel shook-up TV. Sky pretty much revolutionised the UK landscape with multi-channel broadcasting in an era of four free to air channels (Butorac was a Head of Operations and Station Manager at BSkyB). As broadcast has evolved with digital technology our ability to distribute content to consumers has become an increasingly complex business. So I don't see challenges, I see only opportunities. As broadcasters we need to ensure the delivery of content to consumers and that hasn't changed. What has changed is that this is now driven by consumer demand rather than them being dictated to, as to how and when they watch.

OTT has previously been pitched as a threat to traditional broadcast, yet at IBC2015 it appears we have reached a tipping point where OTT is mainstream since broadcasters have embraced it.

I agree. But let's be clear: mainstream TV broadcast is nowhere near dead. Viewership on free to air across MENA, and certainly on our platforms, is increasing. TV is thriving and particularly so with massive investment going into creating spectacular content. 

When you have directors the calibre of Martin Scorsese creating TV shows like 'Boardwalk Empire' (for HBO) and the success of series like 'Game of Thrones' and 'House of Cards' there is an amazing amount of stunning content in the pipe.

The key is making sure the broadcaster is able to adapt to deliver that. OTT is not a threat. Quite the opposite. It is an opportunity. We developed two OTT platforms at OSN including OSN Plus HD for online viewing and OSN Play, our TV anywhere product which are going from strength to strength.

The concept of broadcast doing battle with digital media is long gone. Ultimately we deliver meaningful content to consumers and the technical means to distribute is just an enabler. We are delivery systems for content.

How important is it to reach consumers on mobile devices in MENA?

There are a number of key demographic and use patterns in MENA which have to be born in mind. One is that 65% of the population is under the age of 35. That's a huge, tech-savvy group. The second is that until after the first Gulf war there was very little international content broadcast in the region. Access to international quality content is still a relatively new thing. You couple that with an extremely tech savvy young demographic – most usage of mobile phones anywhere in the world is in Saudi Arabia – and it means a voracious appetite for content and information on devices.

The mitigating factor is that the level of broadband - wired or wireless - is relatively infant in this region and not universally available in terms of high bandwidth. There is a huge opportunity in this region for content over mobile and it's a space we need to be in, but the region has a content piracy problem and the consumer is still coming to terms with the concept of paying for content, as opposed to receiving it for free. 

You made headlines with your comments at IBC Content Everywhere MENA when you galvanised the industry into action on piracy. What efforts are being made to tackle the issue?

This is a problem the whole industry faces. We are tackling it fairly successfully with a consortium of international content supplier, satellite providers, broadcasters and others. Piracy manifests in many ways. On satellite, we've seen a reduction of 47 TV channels taken off air that were causing concern. There are also significant levels of overspill piracy where legitimate operations like Dish TV operate illegally by selling in this region and we are taking steps with regulators and judiciary to clamp down on that. There are piracy threats from OTT and IP providers outside the region going through Virtual Private Networks (VPNs), and piracy from bitTorrent use. We have to continue to clamp down on all of these and make the case that this is hurting not just our business as broadcasters but having an economic impact on the region. Piracy is a fight we will never finish fighting. 

When will OSN make a move into Ultra HD?

Ultra HD is the next step but we've no content at the moment. As much as TV manufacturers are selling UHD screens there is only HD to watch. But we are mindful of Ultra HD as an important new consumer experience and we will launch an Ultra HD channel in mid 2016. We are engaged in conversation with lead contractors for the creation of the platform and also with content providers. Like all new technology it is a chicken and egg situation. We need to have content available to drive the market. This region is unique in that all TV distribution is done on satellite, not just pay TV, but terrestrial is free to air too, so access to bandwidth becomes an issue. We will all need more bandwidth for Ultra HD.

How can the region's original content production for international sales be ramped up?

Content creation in the Arabic language has historically concentrated in Cairo and Beirut. Like other broadcasters in the region we invest in that content. Our number one channel and the leading channel one in UAE, is an Arabic language entertainment channel.

What the region has done is build world class facilities in Studio City and TwoFour54. The issue is the skillset. People don't go to Pinewood Shepperton just for the high-tech facilities but for the craft skills of talent in the UK.  That's what we need to focus on in MENA. There is investment in building up fresh and new content and indeed western studios are starting to invest in Arabic language content which is an indication of the sales potential for original content produced here.

Will OSN air the FIFA World Cup 2022 in Qatar?

We have a strong sports portfolio including the Rugby World Cup, of which we will air every game. We also show cricket, having signed with the ICC for world cricket rights for the next 8 years and major golf.

One of the idiosyncrasies of this region is that we have sovereign backers of key broadcasters who pay an uneconomic amount for rights (such as Qatar's sponsorship of Al Jazeera). The amounts paid to air the FIFA World Cup, English Premier League, La Liga or Champions League are way in excess of those that can be returned because the broadcasters acquiring those rights are not doing it for economic reasons. I am not prepared to do that.

David Butorac is a keynote speaker at IBC2015 on Thursday 10 September ‘The Future Is Now – Broadcasting in an age of challenge.’