ART first in region to launch interactive TV service

Arab Radio and Television (ART) is set to roll out a range of interactive TV services next year in a bid to offset the rise of free to air channels, Arabian Business can reveal.

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By  Richard Agnew Published  December 18, 2005

Arab Radio and Television (ART) is set to roll out a range of interactive TV services next year in a bid to offset the rise of free to air channels, Arabian Business can reveal. The move, the first of its kind from a regional satellite broadcaster, will allow users to text into its shows, play games and chat with each other through their TV sets. The Saudi-based firm recruited electronics giant Philips to develop the system, which a source close to ART said would be launched in its key regional markets in the first quarter of 2006. Although it is yet to reveal how the services will be priced, ART is keen to use them to build customer loyalty and increase average revenues per user (ARPU). Observers say interactivity is likely to prove a particular money-spinner around coverage of the football World Cup in 2006, for which the broadcaster recently secured rights. Interactive TV services have proved popular in some markets outside the region but have been held up inside it, largely because of poor uptake of fixed telephone lines. These provide a ‘return path’ — a means for homes receiving satellite broadcasts to communicate in the other direction. ART intends to get round that problem by using mobile networks instead — giving subscribers an GPRS-enabled smart card to install in their set top box, which then transfers information back to the operator. According to the source, ART discussed launching the service jointly with various regional mobile operators, but decided to proceed independently after the talks broke down. Joe Khalil, an expert on the regional media industry, said that the broadcaster’s aim would be to use the service to drive advertising revenue, as well as subscriber spending. “The challenge is to provide content that encourages the audience to pay. If the content is good and exciting then advertisers might be encouraged to follow their audience — which in turn provides the economic backbone for the service,” Khalil said. Various Middle Eastern channels are already generating significant revenue from customers using their mobile phones to text into their programmes — voting via SMS for contestants in Future TV’s Super Star and LBC’s Star Academy, for example. But pay-TV firms are now looking to invest in set top box-based systems as well, to increase the stickiness of their services and develop new sources of revenue. “Pay-TV operators have been diversifying their services,” said Nadine Usta, research analyst at technology research group, Arab Advisors. “Although the pay-TV view is that most free to air channels are not sustainable in the long term they are definitely putting them under pressure.” Simon Dore, SVP of technology and operations at ART rival Showtime, said it was also considering various technologies upon which to base an interactive TV system. These include mobile and two-way satellite networks, as well as the upcoming high-speed wireless technology, WiMAX. Dore said that Showtime would start planning an interactive TV launch after it had finished rolling out a new electronic programming guide (EPG) next year, offering subscribers services such as seven day channel guides, a personal planning tool and programme reminders. “Showtime is committed to an interactive TV platform,” Dore said. “We identified EPG first because it is enormously highly valued wherever you look, it adds value for the customer and increases loyalty. Then we will look at other rolling out applications like games and transactional services. Interactive TV is a service we will look to go above the line on once we can for our entire set top box population.” But he added that cost and uptake of communications in Gulf countries remained a barrier to interactive TV. “I don’t see terribly healthy developments on the telco side at the moment. That relates to interactivity because the connectivity costs are high and the fixed line penetration is not ubiquitous. Therefore we have to investigate other ways to get data back to us,” he said. Pay-TV group Orbit declined to comment on its interactive TV plans.

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