Channel launches, large-scale marketing activities and no across-the-board job losses. MBC COO and general manager, Sam Barnett tells John Parnell how the FTA giant has fought off the downturn.
MBC may not have any shareholders to appease during the downturn but it does have to satisfy 106 million viewers everyday.
The free-to-air TV network has nine TV channels broadcasting across the Middle East as well as a number of radio stations and websites covering a range of genres from the adrenaline-fuelled MBC Action to its children’s channel MBC 3 and the Al Arabiya 24-hour news channel.
With a reliance on advertising revenue and as the largest FTA network in the region, all eyes are on MBC as a barometer for the industry at large.
As the probable (harsh) reality of 2009 came clear, the network’s COO and general manager, Sam Barnett launched a two-pronged attack to protect the company’s advertising revenue.
“The first decision we made was that we absolutely could not allow ratings to drop,” says Barnett.
“We cannot give advertisers any reason to reduce their budgets for MBC. We are realistic enough to recognise that overall advertising budgets will be reduced but as the market leader, our larger channels are the least risky option for advertisers looking to recover their investment.
“We are not going to compromise; investment in programming will continue and we will make sure we are disciplined on the ratings.”
Rather than relying on advertisers to check the latest ratings figures themselves, Barnett has encouraged the company to actively pursue advertisers with case studies and data supporting the network’s case.
“You have to get close to your advertisers,” says Barnett. “We have a good relationship with our media agents, the media buyers and our advertisers. But in my opinion, we now have to try to take this further by pushing initiatives like branded content and approaching advertisers about these and other initiatives. For example MBC 1’s morning show, Sabah Al Khair Ya Arab, Galaxy was approached to take the sponsorship of the poetry segment, which proved successful and the agency won an award for the campaign.
“The idea is to get advertisers engaged in the programme. This creates hooks rather than just a regular 30 second ad spot that they can place with MBC one week and somewhere else the next.”
“The push on branded content, product placement and movie sponsorship has grown over the last three years but going into budget year 2009, we decided to do this in a much more aggressive way.”
Barnett gives another example of this on the children’s channel MBC 3. An advertiser’s website address was given during a show and the resultant spike in the company’s online traffic persuaded them to take a sponsorship deal on the channel.
“Children’s TV is a more difficult sell than movies, Gulf drama or comedy. The market in the Middle East is not huge and there is a longstanding belief that kids TV wasn’t worth advertising on. We have taken an aggressive commercial stance and approached the market with a proven case study showing that mothers are watching kids TV as well.”
MBC may be the market leader but it has by no means presumed that it could sail through the recession picking up advertising budgets that have been pulled away from other channels.
Neither has there been any need for wholesale redundancies or the jettisoning of any of the company’s other operations.
In fact, Barnett reveals that the company has sought to protect its revenues during the recession by increasing spending in certain key areas.
“We have spent even more on research this year and the speed with which we are reacting has gone up. If programmes are not working, they get changed. If things are working, we expand them. We are also conducting more experiments.”
One such experiment was the introduction of a second audio channel on MBC Max offering Arabic dubbing as an alternative to subtitles.
“We had a hunch that this would work, we tested it in the market and now we are pushing it out. Gulf comedy, is another example, it seems to be working so we’ll do more of it. So we are making decisions more quickly and pushing them to their logical conclusions.”
In addition to the Arabic dubbing and the Gulf comedy, MBC has also continued to push content onto its online video portal, Shahed Online. Despite this, Barnett is under no illusions about the company’s role in the development of platforms.
“What we have done with the new media products over the last three to four years is experiment with a variety of different platforms and follow the market. We don’t want to make investments in technology platforms, that’s a mug’s game,” claims Barnett. “We will let others invest in the technology. When it works, we will ensure we make our content available on that platform. It seemed to us that video on demand (VOD) was something that people wanted and it does seem to be working. Shahed Online generated 3.8 million viewers this past Ramadan.”
The shift from TV to new media platforms such as internet TV and mobile TV has been held up in the region compared to other markets, however they are now beginning to find some traction locally.
Despite the new sources of revenue that they can offer, Barnett is confident that more traditional TV will continue to play the lead role.
“Our take on the shift from TV to new media is that it is important to monitor, but it is TV advertising which is the dominant force and it is likely to remain so for a long time.
“It is still traditional TV that is the focus. We won’t be sucked into putting our money into the platforms. We will invest in content that people want to watch. Currently, they want it on TV, but we’ll make it available on other platforms as and when the viewers shift to them,” says Barnett, dismissing any notion of panic in the company’s regular TV business.
“It’s not a case of suddenly saying ‘there is a recession on, TV advertising is down. Let’s get out of TV and do something else instead’. That would be a mistake.”
The company hasn’t come through the past 12 months completely unscathed. Barnett believes that these changes are the result of good business sense, rather than a consequence of the recession.
“Some business units that were not productive or were losing money have been cut, but these are business decisions made on an ongoing basis. The recession facilitates this because it puts underperformers into focus whereas at other times, they can be more difficult to spot.”
The situation at MBC remains healthy, assures Barnett, who is confident the company will emerge from the recession in better shape than it entered.
“We’ve had seven years of consecutive growth [prior to the downturn]. The result has been that we have not had to change our cost base in a radical way. We told staff it was going to be a tough year and we asked people to look for savings and to tighten their belts. This has allowed us to continue to invest in content. We have an efficient machine. It works well, we’re commercial, we’re profitable, we’re cash-flow positive and we get the ratings.”
The MBC Group has expanded its activities in recent years on various platforms.
- MBC 1
- MBC 2
- MBC 3
- MBC 4
- MBC Action
- MBC Max
- MBC Persia
- MBC+ (pay channel)
- Al Arabiya
- MBC FM
- Hala FM (MVNO in Oman)
- Panorama FM
- Haya MBC (Print)
- MoBC (mobile services)