HDTV: revolution now

Massive consumer uptake of high-definition (HD)-ready displays and increased interest in next-generation playback devices is turning up the heat on regional broadcasters to accelerate the roll-out of high-definition television services, writes Aaron Greenwood.

The massive growth of the Middle East television broadcasting sector in recent years is a prime example of the benefits provided by market liberalisation.

 

With literally hundreds of available free-to-air (FTA) satellite television channels, three subscription satellite TV service providers, a booming advertising market and an ever-increasing demand for multilingual programming being driven by the continuing influx of expatriate workers, the industry is striving ambitiously to meet consumer demands for both captivating content and world-class standards in service delivery.

The region's broadcasting sector is, however, quickly becoming one of the most saturated on the planet with small regional channels mostly competing for crumbs from the slices of advertising pie being carved up between pan-Arab multichannel operators such as MBC and Rotana and satellite service providers ART, Showtime and Orbit.

A recent study released by market analyst Booz Allen Hamilton confirmed that the growth in the number of FTA channels in the region had "outpaced the growth in TV advertising spend resulting in slowing advertising spend on a per channel basis".

The report painted a bleak outlook for small country-based FTA operators, in that more than 80% of TV advertising spending is split between just nine media groups operating 28 channels.

In the short term, the report found, "TV channels are likely to grow at a proportionally slower rate, and as the gap with growth in the advertising arena widens, consolidation may be expected over the long term".

In a bid to ensure this scenario plays out, the industry's dominant players have embarked on diversification strategies, expanding their channel roster and sourcing additional content from local and international markets in a bid to shore up their position and increase their stranglehold on advertising spend.

This strategy has been aided by the transition to digital satellite broadcasting platforms across the region, which ironically has also been largely responsible for the proliferation in the number of smaller operators entering the market.

It's important to note that the few digital terrestrial services established in the region - most notably in Saudi Arabia - have also leveraged the additional bandwidth to launch new television and radio services.

Interestingly, unlike other satellite broadcast markets such as Western Europe, few Middle East broadcasters have chosen to leverage the increased bandwidth availability provided by digital satellite technology to develop enhanced content services.

The common argument put forward by TV broadcasters across the region is that the market is not mature enough to support the development of premium digital services such as high definition television (HDTV).

This argument lacks currency given the unprecedented economic boom that has enveloped the region and the benefits it has provided in terms of the massive expansion in consumer wealth, particularly in the oil-rich economies of the GCC.

Providing no greater illustration of this fact has been the impressive uptake of digital consumer devices, particularly HD-ready flat-screen televisions and next-generation DVD players.

On a per capita basis, GCC countries such as the UAE and Saudi Arabia rival the leading global consumer markets in terms of flat-screen television penetration, with the vast majority of these capable of broadcasting HDTV services.