The future of TV: On demand

VoD services could transform broadcasting in the Middle East.

Video-on-demand (VoD) services have gained traction among free-to-air (FTA) broadcasters and IPTV service providers in the Middle East in recent years, as rival operators have jostled to provide a point of difference to viewers in the marketplace.

Regional IPTV service pioneers including UAE telcos du, Etisalat and Qatari operator Qtel all provide VoD services to their respective subscribers, while dominant satellite pay TV service provider OSN has found success with its push VoD ‘On Demand’ service delivered via its Showbox set-top-box (STB).

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Meanwhile, pan-Arab broadcasting giant MBC’s free internet-based VoD service, Shahid.net, has attracted literally millions of viewers since its launch in 2010.

The growth of VoD services in the Middle East can be at least partly attributed to a shift in the perceived value of these services to broadcasters and how they fit into their overall service offering, says Emmanuel Durou, principal of market analyst Value Partners.

“The commercial focus for VoD has shifted from a transactional model to a bundling or subscription model,” he claims.

“The role of VoD in respect to TV platforms has changed from an ARPU uplift service to retention/acquisition service. For broadcasters and content producers, the opportunity is a fuller exploitation of available content, not just through pre-defined rights windows, but at any point in time for consumers.

This in turn translates to a potential uplift on what content aggregators are willing to pay for the exploitation of the rights in multiple windows – including broadcast, timeshift and VoD – and multiple platforms.”

Despite this potential, Durou says VoD penetration in the Middle East, “at least in respect to television applications, remains low compared to Western markets”. He attributes this to the overwhelming popularity of FTA satellite television services across the region and the comparatively low subscription rates for pay TV.

“[Delivering] satellite-based VoD services is technically challenging, due to the fact that viewers require an advanced STB with storage capacity and the ability to receive push VoD services,” he says. “IPTV is a better platform for VoD, but of course there is a comparatively smaller base for these services in this region.

“Some of the most successful examples internationally have been based on cross-platform distribution models. One of the best in this respect was the inclusion of BBC’s iPlayer VoD service on Virgin Media’s cable TV platform in the UK.” [iPlayer is now available on multiple platforms in the UK, including mobile, internet and PS3 and Xbox gaming consoles].

“To date, free or advertising-funded catch-up TV services have proven the most successful VoD implementations.”

Given the lack of a universally popular VoD distribution platform in the Middle East, it is not surprising that the most successful catch-up TV service launched to date in this region is available free of charge and online.