Beset by pirates, the region’s TV producers have yet to take advantage of the DVD market

The DVD box set has become an inevitable spinoff of most successful American series. In the Middle East, however, only a handful of Arabic-language programs are released on DVD each year, with stations making only modest efforts to take advantage of these sales.

Ali Sabbah, chief operating officer of the Beirut-based Sabbah Media Corporation, remains optimistic nevertheless. “The DVD market is like an inverted pyramid. It’s small now, but it is growing.” He estimates the overall DVD market has grown from $6 million in 2001 to $20 million in 2005. Sabbah Media Corporation produces and distributes some 75 percent of the Arabic-language DVDs throughout the region, along with a healthy share of the English and other foreign-language market. But with DVD revenues dwarfed by advertising and other sources of revenue, few stations have concentrated on the market. Even the market leader, Al Jazeera, was content with outsourcing their DVD marketing and production to Sabbah until this year, although they are now looking to manage their DVD arm more actively.
This is a far cry from the global media market, where DVD sales are at the center of major players’ revenue streams. Disney is estimated to make 20 percent of its revenues from home video (which is now 95 percent DVDs), with News Corp. at 14 percent, Time Warner at 11 percent, and Viacom at 9 percent. The total American home video market reached $24 billion by 2004.
That’s over a thousand times Sabbah’s estimate of the Middle Eastern market. And only 10 percent of that consumption – perhaps $2 million – is of Arabic-language shows and movies. Part of the problem is timing: Western TV shows arrive in the region on DVD before they go on the air, even on pay-TV channels, so they have an extra added value over Arabic shows, which have already been seen in the region, typically during the Ramadan season.
Another part is simple overexposure. With Arabic-language channels playing and replaying Ramadan serials mercilessly, only one or two series per year actually make it to DVD, out of about 25 that have some popularity in their initial run and hundreds that are initially broadcast. The market for these serials is mainly in the Gulf, where Sabbah says 90 percent of his serial sales are made.
“Last Ramadan was a total flop,” he says, with no series expected to be released from the entire season. Successful titles from the past have included Umm Kulthoum and Al Haj Mitwalli, and some classic titles starring Adel Imam have sold well. But though many series have a popular and populist appeal, the market price of DVDs means much of the audience is shut out.
Sabbah also suggests that the appeal of Ramadan serials is too low-brow for a product that is still only affordable by the affluent end of the market. “Egyptian series appeal to the mass of people – people for whom DVDs are beyond their means. People will pay $400 for a complete run of 24. I doubt they would pay $40 for an Egyptian series.”
Finally, piracy swallows a major chunk of the available revenues in the region. The International Intellectual Property Alliance in its country reports cites a loss of between 35 and 95 percent of total film and DVD revenues due to piracy in the region. Some countries have tried to crack down, but law enforcement efforts have been stymied by light sentences, as pirates treat assessed fines as just a cost of doing business.
Content producers work to limit the damage by signing deals with distributors and retail outlets, guaranteeing exclusivity, at least of legitimate product, in exchange for a reliable revenue stream. Distributors keep up unofficial patrols. And retailers do what they can, with promotional deals on hot new shows, but as one major retailer said, “There’s not much, legally, we can do to fight this.”
The one area that has surprised is the documentary market, especially in politics-obsessed Lebanon. The category was opened by Al Jazeera’s 2001 documentary Harb Lubnan (the War of Lebanon), which hit the shelves in December of that year. It is still the biggest-selling Arabic DVD, according to Sabbah.
Now each year new documentaries come out from Al Arabiya, LBCI, Future, and Al Manar, as well as Al Jazeera. Sabbah estimates 40 percent of his total documentary sales are to Lebanon’s modest market. Anticipated releases for next year include an Al Arabiya series on Lebanese Christian leader Samir Geagea and an Al Jazeera series on the history of the Palestinians from 1948 until Yassir Arafat’s death.
Even smaller players have gotten into the act. Lebanese broadcaster NBN, not generally considered a major player compared to fellow Lebanese stations LBCI or Future TV, has an outsize footprint in the documentary market, with a pair of multi-disc series profiling the political parties and religious sects of Lebanon. “The series has been a great success for us,” says Nuha Darwish, program manager at the station.
LBCI decided to go on its own in marketing its DVDs starting twelve months ago. They produced two documentaries in 2006, Koullena Lel Watan, covering the 2005 political change in Lebanon, and Comrade Kamal Bey, a biography of Kamal Jumblat, as well as a compilation of highlights from the reality show, Star Academy. They cut independent deals with distributors in the Gulf and local retailers, as well as selling the discs on their web site. According to Senior Marketing Manager Paul Boulos, “The distributors have the upper hand when it comes to negotiations and sales percentage. We decided we needed to take control of our own merchandising.” He also said that the web site has generated a lot of response.
The station is placing a lot of hope on Star Academy, one of the two biggest hits in Arab TV. However, the sales of the three-season “best of” DVD have fallen short of expectations in the first two months of its release, thanks to instability in Lebanon and the fact that the DVD is not available for sale in Saudi Arabia. “The show has a cultural acceptance problem in Saudi Arabia,” said Boulos, referring to a controversy over the fact that the show involves unmarried and unrelated people of mixed genders living together, a controversy which led Saudi Arabia to block SMS voting on the show during its previous season, and now has led to blocking the sales of the DVD. Boulos says LBC has tried to compensate by focusing on wholesale deals in the lower Gulf, including the UAE, Bahrain and Qatar.

Fighting the pirates

Bassam Eid passes out photographs like he’s showing his vacation snap shots. “See this guy? He was right at the corner of the LBCI offices. And this shop? Half his DVDs were pirated.” Eid, product manager and theatrical coordinator of Empire, which distributes Columbia,

Fox and MGM DVDs in Lebanon, estimates that 30 percent of his staff’s time is spent on piracy issues, driving around the country, taking pictures, and contacting the police.
Middle Eastern countries are starting to make an effort to combat piracy. Lebanon formed a special police unit in 2006 specifically charged with intellectual property crimes and ‘cyber crimes’ which works closely with the private sector, following up on the violations that distributors report.
But despite ostentatious displays like the public demolition of hundreds of thousands of DVDs in Lebanon or the deployment of DVD-sniffing dogs in Dubai, governments face an uphill battle.
DVD piracy is a concern across the whole region. Egypt, Lebanon, Israel and Kuwait are on the US State Department’s “priority watch list” for intellectual property violations. Syria, possibly because it is already under sanctions, doesn’t make the list, but openly flouts copyright laws, according to intellectual property lawyer Walid Nasser. Saudi Arabia makes the “watch list,” sharing that distinction with such rogue actors as Canada and the European Union.
Nasser’s law firm represents the Motion Picture Association of America (MPAA) in Lebanon, and has spearheaded anti-piracy efforts in the country, one of the worst in the region, with an estimated 80 percent of movie and DVD revenue lost to piracy. The International Intellectual Property Association’s reports on the region estimate losses of between 35 and 95 percent where figures are available, and the lower figures are several years out of date. Saudi Arabia comes in at 40 percent as of 2004, but according to Scott Butler of the Arabian Anti-piracy Alliance, who represents the MPAA in the Gulf, losses in that country have since ballooned to 90 percent.
In the case specifically of DVD piracy, most Western products are imported from East Asia, while Arabic-language pirate copies are produced in the region. In some areas, shopkeepers will burn pirate copies to order for their customers; in others, pirated DVDs are on open display on the shelves, often run off in a back room when the display copy is sold.
Lebanon in particular is a problem because many areas are protected by political factions. “There’s a CD factory in the Hezballah-controlled Haret Hrayk area, producing music CDs, computer games, and software, both locally and for export. It’s been operating openly for years, and it’s never been touched,” says Nasser. Although the Hezballah-controlled neighborhoods of Beirut are well-known for open piracy, it is also openly practiced anywhere away from the capital city, according to Eid. DVD piracy even achieves a certain synergy with rampant cable piracy in Lebanon, as local cable pirates host their own private channels, playing pirated DVDs as requested by their customers.
Even when people are arrested, it is rarely much of a disincentive. “We find we’re arresting the same people over and over,” says Nasser. “They pay the fine, and then they go right back to what they were doing – they treat the fine as just a cost of doing business.” The same applies in Kuwait, according to Butler: police successfully raid pirates, but the courts do not apply a “deterrent penalty” – that is, jail time. On the other hand, the UAE has started jailing pirates.
But Butler says the worst offender in terms of lax enforcement in the Gulf region is Saudi Arabia, where the system is “completely inefficient and nontransparent. We see the same person arrested seven times for piracy… There was a man arrested recently with 2.1 million pirated units, and we have no idea what penalty the courts assigned him.”