Nick of time

MTVNI and Arab Media Group (AMG) are planning a full-scale assault on the media sector.
Analysis, Broadcast Business
Analysis, Broadcast Business


Having blazed a trail with the launch of MTV Arabia last year, parent company MTV Networks International (MTVNI) and local partner Arab Media Group (AMG) are planning a full-scale assault on the Middle East media sector, spearheaded by the multi-platform launch of its hugely successful kid's property Nickelodeon later this year. Aaron Greenwood reports.

Introducing US-based media properties with a reputation for cultural provocation - however contrived - to the conservative markets of the Middle East region would seem a risky proposition to most media organisations operating in the Arab world.

Doing so in a television broadcast market characterised by comparatively limited advertising spend and a glut of free-to-air channels, which includes dozens of rival niche broadcasters grappling with diminishing margins, should arguably present even greater concern to key stakeholders involved in any such venture.

But not so for Viacom subsidiary MTVNI and its UAE-based partner AMG, which is funded by the government of Dubai and ranks as the UAE's largest media organisation.

MTV Arabia, the first fruits of the partners' collaboration, which launched to much fanfare in November last year, could arguably be perceived as the riskiest of MTVNI's much-heralded properties - which include Nickelodeon and Comedy Central - in this respect.

Largely perceived as all-American as apple pie in its domestic market, MTV's international properties - in a bid to forge their own identities - have purposely distanced themselves from any such parochial sentiments.

Suffice to say, MTV North America maintains little semblance to spawned properties catering to the Indian Sub-Continent or South America for example, barring a common commitment to short-form and serial youth programming concepts mostly developed in the US and often customised for regional markets.

MTV Arabia also follows this script, with a programming schedule blending the most accessible US-produced programming - including Pimp My Ride and Made - with local product, including Hip Hop Na, and music videos from the Arab world's most popular artists.

Yet, while MTV Arabia's programming strategy has largely mirrored that of MTV's other channels catering to regional markets worldwide, the Middle East presents its own set of unique commercial and logistical challenges, according to Bhavneet Singh, managing director and executive vice president of MTVNI's Emerging Markets division.

Singh should know. With more than 400 staff at his direction, Singh is responsible for managing all of MTVNI's properties in Russia, Central and Eastern Europe and the Middle East.

He also steers the organisation's multi-platform operations in each of these markets, developing and delivering cross-platform digital media services to end-users.

"The Middle East television broadcast sector is quite unique in terms of its commercial dynamics," he explains. "There's probably no other territory in the world where we've committed the same amount of resources to a channel launch.

It's unique from an audience and consumer perspective. While the region is bound together by a common language, it's characterised by a large number of cultural viewpoints - it's a very eclectic amalgamation to address as a media services and entertainment provider.

Singh cites the intricacies of the region's booming FTA broadcast market as reason enough for the organisation's commitment to making the channel freely available and to ensuring it was sufficiently resourced from launch.

While MTV has largely established its reputation as a subscription television service in developed markets, the network has taken a more holistic approach to emerging markets, establishing local FTA terrestrial and satellite channels depending on the dynamics of a particular broadcast market.

In addition to MTV Arabia, the organisation operates a FTA satellite channel in Turkey, as well as FTA terrestrial channels in Italy and Russia.

"You need to look at the market dynamics and decide whether it's a better strategy to be a subscription service or a FTA service, and then decide on which platforms you want to employ," explains Singh.

"In the Middle East, we operate on a licensee basis in conjunction with [UAE media authority] TECOM, which has employed AMG to manage the process.

"As a content delivery platform, FTA satellite presents a very different commercial proposition to terrestrial.

"In a terrestrial environment, competition is limited by the availability of bandwidth, but in a satellite environment such as the Middle East, you are competing with a massive number of rival broadcasters for audience share.

"Further complicating matters - at least initially - is the fact that the regional advertising market and the business fundamentals are still relatively immature, although this is changing rapidly.

"Yet, what gives us confidence is the fact the market is experiencing tremendous growth overall. TV ad revenues have enjoyed compound annual growth rates (CAGR) of around 25 percent over the last five years, and we expect to see around 20 percent CAGR for the next five or six years. The Middle East accounts for five of the top 10 fastest growing advertising markets in the world right now."

Still, MTV Arabia faces fierce competition for a share of this revenue from the more than 50 music television channels currently broadcasting in the Arab world.

Mindful of this, Singh says MTVNI and AMG are heavily promoting MTV Arabia as a youth lifestyle channel, as opposed to purely a music video offering.

He also scoffs at any suggestion MTVNI remains edgy about if and when it will see a significant return on its substantial initial investment in the channel.

"ROI is not an issue," he declares. "We had two objectives when we launched [MTV Arabia]: the first was to ensure we had the right programming mix on-air from launch and the other was to deliver on the expectation viewers had of what MTV Arabia should be.

My belief is that if we consistently meet audience expectations the advertising support and the commercial partnerships will follow.

"We've taken a similar approach to every other market we've entered. We have delivered on audience expectations and the money has followed."

Singh says multi-platform distribution not only remains key to MTVNI's aspirations but is what will set it apart from music channel rivals such as Saudi-based giant Rotana.

Indeed, MTV has rapidly developed its stable of digital content delivery offerings in key markets such as Western Europe in recent years, and plans to leverage this experience to develop a similar portfolio in the Middle East.

"Our goal is to develop the MTV Arabia offering to the point that we are no longer talking about our audience as viewers, but as users," says Singh.

"I'm talking to AMG and TECOM about how we can best leverage the non-linear side of the business to the best of our ability, whether it be online or mobile.

"We've been pretty successful implementing this strategy in other markets, and we expect it will be successful here too."

Given the challenges of limited broadband penetration and low levels of consumer income that generally pervade emerging markets in the truest sense, MTVNI's new media strategy has arguably achieved the greatest success in markets you would least expect it to.

"We launched a localised on-demand content service in Romania, which has done very well, and we are in the process of developing rich media services in Poland and Turkey," explains Singh. "We also boast 100 percent coverage in the Czech Republic - we are the most widely distributed and widely consumed media company in Europe on all mobile platforms.

"The main issue with new media platforms is that they don't fit neatly into each and every market. You need to customise your strategy to best address the commercial dynamics of a particular territory.

For example, in the UAE, which has relatively high levels of broadband penetration, we might skew our service offering to online platforms, while in other cellular-saturated markets such as Egypt, we'll more than likely focus on developing mobile services.

"3G penetration is high in pockets, but the vast majority of cellular services remain 2G in the Middle East. So what we will look to do is work with individual operators in key markets, rather than develop blanket coverage across the region with one or two operators. We may even consider syndicating our content to third-parties."

MTVNI supplied content to the recent mobile TV trial conducted by TECOM and du in Dubai. Singh says the company has high hopes for a commercial launch of mobile TV services in the UAE, suggesting it could prove crucial to the company's aspirations to launch additional broadcast properties in the region.

Indeed, cellular-based content delivery services have proven fundamental to the international success of the next channel slated for launch by MTVNI and AMG, Nickelodeon Arabia.

The kid's entertainment network has achieved remarkable success in international markets and spawned various linear and non-linear iterations since its launch in the US in 1979.

The Nickelodeon 'superbrand' now accounts for various network broadcast properties, hotels, theme parks, an extensive online portfolio of highly profitable broadband channels and even a virtual world similar in scope to 'Second Life' known as Nicktropolis.

Arguably less niche and more widely recognisable than the MTV brand, particularly in emerging markets, Nickelodeon could potentially generate greater returns for the partners than its youth network stablemate.

Lending weight to this sentiment, Singh reiterates that the key challenge facing the partners lies less in consciously working to "monetise the [Nickelodeon] brand. It's more about making that connection with a culturally diverse audience".

"We're allocating significant resources to this process," he explains.

"It's a major challenge. For example, should we subtitle or overdub existing content? If we dub, what vocal style and dialect should the characters adopt? How do we ensure each character relates as much to a kid in Saudi Arabia as they would in Egypt?

"We literally take each piece of the value chain and work to better understand how we go about making it seamless and very relevant and engaging to audiences in this region.

"We also need to express our brand values in a relatively untapped environment. If we achieve these aims, the advertising and marketing dollars are sure to follow."

Singh says MTVNI is committed to bringing Nickelodeon's significant portfolio of online services to the Middle East, which includes broadband TV, video-on-demand and other interactive content delivery mechanisms.

"We are very keen to explore every opportunity in regards to new media platforms," he says. "I believe this market is primed for such services.

"We are talking to AMG about a couple of other propositions, but I can't confirm details at the moment. I would love to have a portfolio of linear and non-linear channels operating in the Middle East. I would also love to build a Nick Hotel here [in Dubai]."

With Nickelodeon Arabia scheduled for launch within the next six months, Singh's admission suggests further channel rollouts could be just around the corner, with Comedy Central more than likely spearheading this expansion.

"Comedy Central has achieved great success in the eight or nine markets we've taken it to outside the US," says Singh.

In the UK, it ranks among the top 10 cabsat [cable and satellite] channels in terms of viewer numbers and in Spain it's firmly entrenched in the top three. We launched the first Comedy Central channel outside the US in Poland and we expanded our audience base from 50,000 to 2.5 million subscribers in just 12 months.

Singh denies that the channel, which is renowned for pushing the boundaries of good taste with properties such as South Park, could prove a little too extreme for Middle East viewers.

"We always conduct thorough research to ascertain how much local content we'd need to produce and how much we could source from international markets," he explains.

"For MTV Arabia, we've produced some local programming, but still the majority of productions have been international formats. Nickelodeon will probably follow a similar format, but customised for Arab viewers.

"The same can be said for Comedy Central. The brand's value translates very well regardless of the market it operates in, and undoubtedly it would appeal to advertisers targeting high-earning males in their 30s, which make up the channel's core audience internationally. I'd love to do a Comedy Central Arabia - it's just a question of how we best execute it. To be honest, there's no patented formula to this. The vagaries of each market means we need to assess each and every one on its own merit."

Musical master

In his role as managing director and executive VP of MTVNI's rapidly expanding Emerging Markets Group (EMG), Singh is responsible for managing one of the company's largest international businesses, with more than 20 broadcast and broadband channels across Central & Eastern Europe, Central Asia and the Middle East.

Since joining EMG in 2006 as deputy GM, Singh has been integral to the company's recent successes which include the launch of MTV Baltics, MTV Turkey, Comedy Central in Poland and the launch of MTV On-Demand in Romania. The launch of MTV Arabia represented the biggest launch project for EMG to date.

Singh is ultimately responsible for managing 400 staff across the three regional operations. Prior to his role at MTVNI, Singh developed new media properties for Manchester United PLC.

He also boasts extensive commercial experience having worked as director of sales at IMG TWI in India, and as head of ad-sales at Discovery Channel in Asia. Singh boasts an MBA qualification from Manchester Business School.



I want my M(obile)TV.

MTV played a key role in last year's mobile TV trial in Dubai conducted by TECOM and du, supplying content from its stable of programming.

While hailing the trial a success, Singh believes there are a number of issues that need to be addressed to ensure the success of mobile TV services.

"As a consumer, would I expect access to linear video content on my mobile phone? Maybe. Would I pay the subscription fees required? Probably not. These are fundamental issues that need to be addressed," he says. "There's no point limiting your reach to a very small section of the market."

Singh believes the key issues are further complicated by the number of mobile content delivery platforms currently available or in development worldwide.

"There is a real lack of consensus when it comes to platforms, which makes your entry points much higher as a content developer," he explains. "This raises challenges for the network operators to monetise these services, as well as IP owners such as ourselves, because there are no synergies or guarantees as to how the whole process will play out. There is no perfect model in this respect.

"However, there are some promising options emerging. We have the option of developing subscription-based services, or we could develop smart advertisements, which have taken off in markets such as Japan and Scandinavia. Ultimately, while the 'killer app' is still to be discovered, I'm pretty confident a viable model for the delivery of mobile content will emerge over time."

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