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Is the MENA pay TV market ripe for consolidation?

by Aaron Greenwood on Jun 23, 2009

6 Comments

Could the recession mean lights out for one of more MENA pay TV operators?

Speculation has been rife in recent weeks regarding a potential merger between two of the Middle East's biggest pay TV service providers, Orbit and Showtime, amid the financial meltdown that continues to wreak havoc in the operators' core GCC markets.

Despite official denials, escalating costs for exclusive rights deals to tier-one content, such as US films and network series, as well as sports programming such as the English Premier League, is leading many to speculate that consolidation in the pay TV market will happen sooner, rather than later.

Is the sector entering a watershed period in its short and tumultuous history? Can the Middle East really sustain more than two pay TV network providers? If Orbit and Showtime did merge, what impact would it have on the likes of ART?

Have your say now!

FEATURED COMMENT

Is this is going to lead into higher prices with lesser value (options) for viewers?

6 Comments

Readers' Comments

Tom Riddle (Jul 3, 2009)
dubai
United Arab Emirates

What is in it for me...the viewer?
I agree about it not being a solution, since the underlying drawbacks of the marketplace (read piracy & lack of regulation) will continue to exists.Is this is going to lead into higher prices with lesser value (options) for viewers. I was under the impression that competition results in better value for customers and would hope that the market place for Pay TV see new entrants.

SadNad (Jun 27, 2009)
Dubai
United Arab Emirates

Consolidation is an option not the solution
Piracy being rampant in this region, consolidation will only make things look good, but in principle the underlying problem of piracy will still be there. Generating wealth through subscription can only make sense when piracy is controlled. Today Lebanon, Kuwait, Oman, Bahrain, KSA, Qatar and UAE are pirate heavens. Any pay TV entity, merged or standalone needs to first focus on piracy in the Middle East. Local governments need to be involved and perhaps a co-ordinated GCC wide anti piracy campaigns can only gaurantee the survival of Pay TV as opposed to consolidations or mergers.

Bob D (Jun 24, 2009)
Dubai
United Arab Emirates

How could they not make money on EPL
It amazes me Showtime couldn't make money on the EPL. Paid subscriber numbers may be small, but the number of people watching the footie through illegal connections must be in the millions across the Middle East. And these are all cool young blokes who want to drive flashy cars and wear fancy perfumes -- thus an appealing target demographic, or whatever. Anyway, if it means my monthly subscription charge goes down, bring it on! The price of Showtime went up 10% at the start of the year (I wasn't notified) and no-one in the local press reported it.

Scott (Jun 24, 2009)
Dubai
United Arab Emirates

Best of both worlds
I really hope this goes through. I for one have had enough of programs and channels continually switching from one platform to another. The idea of having one place with all the best movies, series, and sports sounds pretty good to me.

Saad (Jun 23, 2009)
Jeddah
Saudi Arabia

profit and pride
I am not sure any of these people have ever been profitable. As long as the owners are happy to lose money and keep their pride, there will be no consolidation. If economic crunch means the owners now need to save some money then mergers would make good sense.

Dylan (Jun 23, 2009)
Dubai
United Arab Emirates

Shorbit
As an existing Showtime subscriber, the prospect of 'Shorbit' doesn't float my boat to be honest, but it's interesting to speculate on what sort of impact it would have on the market. Given there's few regulations regarding anti-competitive behaviour in this corner of the world, I reckon a merger could be a distinct possibility - Showtime must have made a massive loss on the EPL rights - they've had hardly anything in the way of new advertisers supporting the product, except for maybe Toshiba, and that was only a $10m deal, if memory serves - doesn't really compensate for the $120m-odd spent on purchasing the rights in the first place!

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