One year after the US$120m acquisition of exclusive Middle East broadcast rights for the English Premier League (EPL), pay TV operator Showtime Arabia has kicked off its second season of coverage of the world's most watched football league. Digital Broadcast looks at how the deal has affected the company on and off the box.
After 380 live matches and 1002 goals, last season's EPL provided plenty of entertainment and Manchester United were not the only big winners.
Showtime Arabia's exclusive three-season deal, which it snared from archrival ART, is the most expensive in Middle East sports broadcasting. Now the Dubai-based operator is looking to build on the impact from its first year of coverage and further recoup on its lofty investment.
"I would estimate that our business has grown by 30 percent as a result of the EPL deal. It has been a great driver for subscriptions and that level of growth in a year is significant," says Azhar Malik, VP of marketing and PR at Showtime. "It was an additional piece of luck that the EPL re-branded at the same time as we won the rights. It made the competition look like it had been completely refreshed and that worked in our favour."
Securing the broadcast rights to a sporting competition of such reknown had knock-on effects for the rest of the operator's channels.
"The Premier League rights have been positive for Showtime as a whole - the combination of exclusive sports alongside movies, series and general entertainment has helped to enhance the overall Showtime platform and helped to boost revenues and subscriptions significantly," states Malik.
With consolidation in the pay TV industry long mooted, could three years of runaway success broadcasting the EPL leave Showtime's rivals in an unsustainable financial position and unable to compete?
"That would be difficult in this marketplace as there are a number of operators that aren't necessarily focused on making money. I think it's inevitable that there will be some form of consolidation in the coming years; quite when it will happen is difficult to predict. This would lead to a fewer number of both FTA and pay TV channels, but those remaining would obviously hold a greater share of the market and go about their business more efficiently," claims Malik.
EPL rights were always going to attract additional subscribers. Showtime has looked to exploit its burgeoning profile beyond its stable of sports programming by showcasing other channels, to collect a larger total audience share.
"Operators that solely offer one genre of content don't succeed. Middle East viewers demand a well-rounded stable of programming and that's why you have to have a number of varied partner channels like JimJam, Disney, Discovery, NatGeo and so on, which address niche sectors of the marketplace. Altogether they make a difference," Malik argues.
Putting together a bouquet of channels to satisfy all quarters has not happened by accident for Showtime. Over the course of a year, the broadcaster interviews 20,000 subscribers and non-subscribers to identify its strengths and weaknesses in terms of content.
"We also assess the latest available technology and combine this with the results of the survey. If you look at the development of our channel offering over the past 18 months we have expanded our new series, movies and sports line-up, while introducing new children's entertainment channels.
In terms of technology, we launched the first digital video recorder in the Middle East; we created an EPG in Arabic and English; and we launched Show on Demand, the region's first VOD service," Malik says. "The introduction of these offerings coincided with the launch of EPL on Showtime. That is how the product was put together. The process is very marketing lead and it is very consumer lead."
Malik says Show on Demand has proven very popular with subscribers in its first year of service, delivering significant returns on the cost of investment while managing to reduce churn.
Despite these favourable results, Malik says the company will continue to pursue the enhancement of its linear TV-based services before moving onto alternative platforms such as the internet and mobile TV. But will these enhancements include the Premier League in HD any time soon?
"Capacity is a significant issue and Arabsat and Nilesat have both recently made announcements to increase satellite capacity in the region. We invested millions of dollars last year in our four sports channels and the two EPL studios which are all HD-ready," states Malik.
"There is some further investment we would have to make to launch HDTV services. We need to better understand what our customers want from an HD service and how much they are willing to pay before we go live with HDTV."
The commercial benefits of the EPL extend beyond the growth in subscriptions. Malik believes Showtime's regional profile has been enhanced, while the appeal of the platform to advertisers has clearly benefitted from the deal.
"We received a huge amount of publicity at the time [of winning the rights] which has positively impacted our brand. There are also certain marketing opportunities that wouldn't have arisen without the EPL rights. Certain advertisers targeting young male viewers have approached us to discuss sponsorship opportunities, which wouldn't have happened otherwise," admits Malik.
One such deal has seen Toshiba become the sole on-air sponsor of the coverage for the remaining two years of Showtime's EPL rights package. The agreement will see the pay TV operator collect $12 million over the two years making it the single largest broadcast sponsorship in the Middle East, according to the parties involved.
The consumer electronics manufacturer stressed at the time of signing the deal that it was the access to the EPL's target audience that was the main driver behind the initiative.
A Toshiba representative even described the record-breaking deal as "cost-effective", presumably because of the high net worth value of the EPL's target audience demographic.
The next round of EPL rights could prove a pivotal point not just for Showtime but for the broadcast industry as a whole. The rights are sold in three year cycles, with the auction for the next package set to take place midway through the current period, according to Malik.
"The EPL is important to the growth of our business, particularly in terms of attracting new subscribers," says Malik. "There has been intense competition for the rights in the past and I guess we will see that in the future. When you make this sort of investment it is always for the long-term. You can never predict the outcome, but it is certainly our intention to compete again for the next round of rights."
Television broadcasting rights to major sporting events, such as the Olympics, continue to spiral as broadcasters and marketers find new ways to increase their associated incomes and find new revenue streams off the back of screening the world's most watched sporting events.