Free-to-air satellite TV boom poses threat to pay TV

The birth of 55 free-to-air satellite TV stations in the Arab world in the last 18 months is forcing the region’s pay TV operators to cut prices and expand their offerings, according to the Arab Advisors.

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By  Vijaya Cherian Published  July 14, 2005

The birth of 55 new free-to-air satellite TV stations in the Arab world in the last 18 months is forcing the region’s three main pay TV operators to cut prices and expand their offerings, according to the Arab Advisors Group. “The Arab world has witnessed a huge transformation in the TV industry over the past 10 years,” says Judeh Siwady, Arab Advisors senior research analyst. “The viewers in the region now have a large variety of TV choice available with terrestrial, pay-TV and free-to-air (FTA) satellite channels." Arabsat and Nilesat alone carry 155 FTA TV channels, more than 20 free radio stations, and the TV and radio channels of the three main pay-TV providers in the region, namely ART, Orbit and Showtime. “Pay-TV operators have been struggling to gain more subscribers amidst the flood of well-financed FTA channels. With the growth of the satellite free TV channels, the task is becoming more challenging. The year 2004 has witnessed an alteration in the strategies of most of the FTA channels in terms of programme content, which now rivals that of the pay-TV channels,” adds Siwady. The report, titled "Satellite TV in the Arab World 2005" gives the example of MBC, which changed the content of its English entertainment channel, MBC2, and introduced the first free satellite channel exclusively broadcasting American movies. “With the appeal and popularity of western reality and game shows, and Arab TV stations buying the rights to remake these shows, viewers are increasingly getting wide choices from these FTA channels and many see no need to subscribe to any of the pay-TV networks,” says Siwady The report also speaks about how the wide spread adoption of illegal satellite de-encryption devices in the region have further affected pay-TV operators. “It is relatively easy for individuals to purchase a receiver and get pirated smart cards for foreign pay-TV channels. The encoding is available either through built-in encoding software, through the insertion of a smart card or a CAM (Conditional Access Module). The distribution of illegal TV cables to households is usually done when an individual gathers a variety of subscriptions from Pay-TV at home and adds to that some foreign encrypted channels and the available FTA channels, and retransmits them as packages to neighboring houses. This phenomena is seen in Lebanon and Egypt, and the price per month is minimal, around US $10 per month,” explains Suwaidy.

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