“The media in the Arab World has really proven itself in the last five years,” said the soft-spoken UAE minister, Sultan Saeed Al Mansoori, as he opened Dubai’s annual cable and satellite trade show swarmed by microphone jousting reporters. “As we continue to grow, we will have a very solid impact on the international arena.”
The minister could be right, but as Arab channels take on the world, they find themselves increasingly dependent on the world’s broadcast manufacturers to quench their insatiable thirst for the latest systems and equipment. And despite growing worries over saturation, the world’s fastest growing TV industry is showing few signs of slowing.
Business is so good for Dubai-based audio-visual equipment distributor Venuetech that it is now expanding into foreign markets in Africa and India after only two years in the market. “We started with one or two products; now we are distributing 12,” said brand manager Azar Wazir.
For US cable maker Belden CDT, the Middle East is still “virgin territory” according to regional manager Bassem Salhab. “You need studios, TV stations, sports arenas… and all of these events require cables,” – a product segment estimated to be worth 80 million euros for the Middle East alone.
Supplying the basic mechanics for start-ups and existing stations is an obvious business opportunity in a region where new stations are hitting the airwaves on a weekly basis. Yet even if today’s boom appears doomed for an eventual bust, the timing of the Middle East satellite revolution conveniently coincides with the emergence of new technologies to deliver and produce content; technologies that are also forcing broadcasters everywhere to dig deeper and deeper into their pockets.
Beyond the much-hyped switch to HD, some of this year’s hot ticket innovations include internet protocol television (IPTV), video on demand (VOD) and other interactive services related to SMS text messaging. Meanwhile, the trend toward liberalization in several Arab countries continued to open windows for growth, particularly in the radio sector. From the US to Malaysia, the competition for Arab clients is growing, and even Chinese companies are feeling the heat.

Dreaming of HD dollars
It’s a no-brainer by now. Quite expectedly, much of the buzz this year was about HD, and if you haven’t already heard, this would be that seemingly inevitable new format that is going to enrich our lives by providing sharper images and, of course, a gold mine of fresh revenues for suppliers. Even though sales of HD sets remain meek among Arab consumers, the excitement at this year’s Cabsat was palatable.
“Within a year, I think it’s going to be a drastic change,” said Yassine Dahbi with French satellite operator Eutelsat; hopeful about the 2006 World Cup soccer match, which
the Arab Radio and Television Network (ART) has promised to broadcast in HD.
“The benefit everyone will get from HD will come from sports,” agreed Sony’s Naoyuki Sugihara. “We will see a growth next year with large budgets coming from the oil-producing countries.
The next big thing?

Getting bored of all that HDTV jazz? Well, fear not; there’s a couple of a new acronyms on the block. Gone are the days of surfing and sniffing through the buffet line of programming dished out at the whims of the boys in the playout room. The annual advances in broadband technology, storage capacity and processing power are giving TV households the ability to have “everything, anytime, anywhere,” according to Gary Prole from Harmonic. The technology of IPTV, promises to give consumers more choices and customized programming, he explained. As opposed to cable, where an average of 80 channels are fed simultaneously to an entire subscriber base, IPTV and new high-powered set top boxes will allow individual consumers to select the content they want and store thousands of channels. “IPTV is going to be big competition to cable and satellite,” Prole predicted. He also touted the brave new world of VOD and time shifting options where, “If I get home at 10 past six and want to watch the six o’clock news – no problem!”
But the future of IPTV and VOD in the Middle East is contingent upon serious structural changes according to Nicolas Mobayed, president and CEO of Bond Communications, which has set up only a couple of regional VOD systems at ultra luxurious hotels like the seven star Burj Al Arab. With precious few residential neighborhoods in the region wired and ready to handle advanced delivery systems, revamping infrastructure would be costly and inconvenient. “If I need to disrupt business in that hotel or this apartment complex, a landlord may say ‘get lost, I’m not going into technology, I’m into property,” Mobayed explained. Another cautionary note: the business of VOD and its less flexible predecessor pay-per-view (where consumers can order content only at scheduled times) is driven by adult film purchases, which generate “80 to 90 percent” of revenue in the US, according to Mobayed. Add this to the fact that free-to-air movie channels have “spoiled” regional consumers for choice, and the prospects for profitability for such cutting edge delivery systems does not seem very bright. However, the evolving trend of rolling TV, telephone and internet services into one package known as ‘triple-play’ could stimulate the growth of new viewing technologies if only as part of a bid to tap into the region’s booming telecom market. “Some companies may want to grab customers from Etisalat,” Mobayed said, in reference to the UAE mobile network which runs its own cable TV service known as E-Vision.

High frequency
Investing $1 million in a Kuwaiti representative is logical for Malaysia-based antennae tower manufacturer, Tower Master Corporation. “There is a lot of potential here; the demand is very high with all these new radio stations opening in Syria, Lebanon, Iraq and Iran,” said company CEO Matthias Beyerlein. Even though relatively new to the Middle East, Beyerlein is already projecting that a majority of his business could come from the region with $10 million to $15 million worth of projects expected by 2007. “We cannot handle this kind of volume. The market is so big, there’s enough share for a lot of companies.”
Liberalization is also taking place in North Africa, as the Moroccan government announces scores of new broadcast licenses; great news for UK-based audio equipment producer Sonifex. “A lot of countries have released more private licenses,” said sales manager Eamonn Hefferman. “People are looking for good equipment.”

From California to Guangdong
“People are fearful of closing business deals here and a lot of that is over dramatized by the media,” said Michael McCormack of California-based cable enclosure and underground equipment producer, Channell. Admittedly “overwhelmed” by projects taking place from Yemen to Iraq to North Africa, McCormack says many American companies have ignored growth in the region due to perceptions over geopolitics. “A lot of Asian companies are taking advantage, especially the Chinese,” he added.
Guangdong-based set top manufacturer Blossoms was among several firms in the China pavilion that count on the Middle East market for at least half of their exports. “Business is growing,” a company executive said. “But on the other hand, it’s very tough, Competition is everywhere.”