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Arab satellite sector plagued by high production costs

Arab satellite television channels are facing serious financial problems relating to the rising cost of programme production, a conference in Lebanon has been told.

Arab satellite television channels are facing serious financial problems relating to the rising cost of programme production, a conference in Lebanon has been told.

Nadim Al Mounla, the chairman and general manager of Beirut’s Future Television, told the Lebanese Management Association that Arabic channels are operating at a disadvantage because they must produce so much content.

He addressed the association as part of a conference entitled Audiovisual Media Sustainability Challenges. “The three coded channels, ARTE, ORBIT and SHOWTIME, have already lost their initial US$4 billion capital investments,” said Mounla. “And there isn’t any hope of ever recouping these losses.”

Mounla defined an Arab satellite channel as a company broadcasting to the Middle East and Arab countries, irrespective of its physical location. The trend for such channels started a decade ago with the Saudi-owned Middle East Broadcasting Corporation (MBC) based in London, followed by Arab government channels and the private sector. The sector boomed following the digital revolution at the turn of the century.

“Initially it was the equipment and satellite links that made up the bulk of the cost. Nowadays, it is the production, purchasing movie rights and the creative human factor that cost most,” explained Mounla.

Some 80% to 85% of Future Television’s annual budget of US$26 million is destined for production ends. The company has 500 staff in addition to around 400 freelancers.

“The internationally accepted and utilised role for television stations is to broadcast programs and not produce them,” Mounla added. “It is only in the Arab world that the broadcaster has to be the producer as well. Normally all production tasks must be outsourced, including the filming of the news.”

As an example, Mounla decried that his company had to annually produce about 5,000 hours of programs, as compared to the 300 annual hours of the Disney Corporation. A program that used to cost US$100,000 currently requires a budget of $2 million. A purchased movie, with a US$4,000 price tag and the rights to broadcast for two years, now costs $100,000 for only biannual broadcasting.

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