PREMIUM: CEO Martin Stewart tells TV MEA about how OSN is reinventing itself for the future.<\/p>\n
TV MEA:<\/strong> When you took on the post of CEO at OSN, what were some of the key strategies you felt you needed to put in place to better position the company in a changing media environment? TV MEA:<\/strong> Tell us about how you\u2019re positioning WAVO. How has the platform been received so far? TV MEA:<\/strong> You\u2019ve partnered with Netflix. Why was that alliance important, and how is it progressing? TV MEA:<\/strong> Is Netflix integrated into your set-top box? And how does billing for the service work? TV MEA:<\/strong> Shortly after your arrival at OSN, I recall you unveiling new pricing and packages. Can you tell us about the thinking behind your offerings to subscribers and how you\u2019re giving them flexibility in their choices? TV MEA:<\/strong> How important is local Arabic-language content investment for OSN? And content for the Indian and Filipino demographics in the region? TV MEA:<\/strong> I know Ramadan tends to be a key viewing period. Do you focus your originals around that time of year? TV MEA:<\/strong> You mentioned box sets and catch-up\u2014how do you approach windowing titles so they reach as wide an audience as possible? TV MEA:<\/strong> How are you battling the piracy problem? TV MEA:<\/strong> You mentioned market distortion earlier, with some companies paying inflated prices for content. I know that has been the case particularly in the sports space. Are government-backed incumbents still driving up costs or has there been some modulation? TV MEA:<\/strong> How do you approach the acquisition of sports rights? TV MEA:<\/strong> Sports is the main reason for the high cable subscription fees in the U.S., so the skinny bundle is becoming more popular. Do you offer the ability for consumers to pick and choose what services they want? TV MEA:<\/strong> What are your key growth initiatives over the next 12 to 18 months? <\/p>\n","protected":false},"excerpt":{"rendered":" The CEO talks about how OSN is reinventing itself for the future. \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0\u00a0<\/p>\n","protected":false},"author":290,"featured_media":1892,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[67,69],"tags":[196,77],"class_list":["post-1891","post","type-post","status-publish","format-standard","has-post-thumbnail","","category-interviews","category-top-stories","tag-martin-stewart","tag-osn"],"yoast_head":"\n
\nSTEWART:<\/strong> From a big-picture perspective, I didn\u2019t think we were obsessing enough about the customer. The media industry globally, and in the Middle East especially, is a fast-changing one. We needed to be much more in tune with what our customers were thinking and feeling and experiencing. So that was the first big mindset change. The second one was around the need to be obsessed from a digitization point of view\u2014not just in terms of how we serve our customers with product, but also how we interact with them, how we communicate with them and within our own organization how we can be much more joined up and agile and data-cenric in how we make decisions. The third thing was the need for partnerships, especially in our region. It\u2019s still quite a fragmented industry, and that fragmentation has meant that we haven\u2019t managed to fulfill the potential that the region has as a whole to deliver a big, successful, profitable media economy. We needed to find ways to work better with people in order to service clients\u2019 ever-changing needs.<\/p>\n
\nSTEWART:<\/strong> If you join us as a DTH subscriber you\u2019ll get access to OSN Play, which is our on-the-move companion subscription. We recently added more live-streaming channels, taking the total number of live-TV channels up to 60. WAVO is our standalone OTT offering for $9.99 [a month]. We launched WAVO last summer. What happened in the first year was very pleasing to us, but we decided we needed to do a big technical overhaul if we were going to be able to fulfill the potential of the great content we have. So we took the decision to pause while we did that, which was a difficult decision to make. It was the right thing for us to have done. That\u2019s what we\u2019re focusing on at the moment.<\/p>\n
\nSTEWART:<\/strong> We have relationships with many great content suppliers and I don\u2019t want to be disrespectful to any of them, but there\u2019s no doubt that Netflix is a hugely successful studio. It\u2019s redefined the meaning of scale, it\u2019s redefined the approach that people have to creating content by being incredibly local, it\u2019s taken the HBO model and globalized it. And I think the content they produce is incredibly interesting and attractive. They partner that with a very good technical service, but their focus is not on their platform, it\u2019s on their content. That makes us natural partners because we want to bring great content to our customers. If you want to get the best in global entertainment and local entertainment, you should be able to come to OSN and fulfill that aim. So partnering with Netflix helps us toward that target. We know that a lot of our customers are going to like Netflix content, so we\u2019re just making it easier for them to access it as part of their subscription with us. And it gives Netflix access to our customer base, which is a benefit to them. I think it\u2019s a win-win.<\/p>\n
\nSTEWART:<\/strong> At the moment, because we\u2019re still rolling out our new set-top boxes, it\u2019s just a simple add-on for our customers. With our new box coming out shortly, it will be an app on the box and you will be paying us as part of your subscription, and then we\u2019ll pay the money to Netflix. Ultimately we hope to develop the relationship so that through one EPG and one remote control, you\u2019ll be able to search for Luke Cage<\/em> or Jessica Jones<\/em> or The Rain<\/em> or whatever, and then you\u2019ll go to the part of our box that has that and you\u2019ll enter the Netflix interface to consume it. We\u2019re very excited about the relationship with them because they are investing in making some globally attractive content. It\u2019s an important partnership for us.<\/p>\n
\nSTEWART:<\/strong> Our legacy is our strength, but it\u2019s also something that has held us back from fulfilling our full potential. Over the history of OSN it\u2019s been a very high-priced premium product, appealing to the higher end of potential customers. And that was great for its time. But the world has moved to a point now where people have access to content online in a way that they never did five years ago. And that means that people\u2019s perception of value changes, so you need to be able to offer a great service with great content at a great price. We had to recognize that our pricing only suited the pockets of a relatively small portion of our region\u2019s potential customers. We\u2019re trying to find ways to evolve our pricing and maintain our premium base and our premium positioning. We are the home of entertainment in the region, and that means we should be able to attract a good price for a good service with good content. But we also need to be able to sell subsets of that content at different prices. We have to recognize that everybody loves what we\u2019re trying to sell, but they can\u2019t all necessarily afford it. In a world with very strong free to air and very high levels of availability of pirate product, you\u2019ve got to take that into account when you\u2019re pricing for the broader market. And salaries in the GCC countries are not reflective of the salaries in the rest of the region. We\u2019ve been trying to make our content as accessible as possible, and we\u2019ve still got a ways to go. We haven\u2019t finished how we\u2019re evolving our offering.<\/p>\n
\nSTEWART:<\/strong> We\u2019ve been extremely successful by having multi-decade relationships with international content providers\u2014whether they are Western or Filipino or South Asian companies\u2014and local Arabic production companies. So we have four sets of relationships. Two realities have been important to us. One is that the market is dominated by, frankly, some irrational legal competition where people are distorting the market by the prices they\u2019re paying. They\u2019re not making a profit; they\u2019ll never make a profit. And that hurts the broader economy in the medium and long term because it doesn\u2019t create sustainable businesses. And then, of course, you have the astonishing levels of piracy that you see in this region that you don\u2019t see anywhere else in the world. With that type of a market situation, it\u2019s important for us to have something that is ours, that is unique to us, and that means original Arabic-language content. The content we\u2019ve funded and financed goes onto our Yahala channel group\u2014those channels get 40 percent of all of our viewing, despite being only 15 percent of the total content. So Arabic language is unsurprisingly hugely important in a market that is dominated by Arabic speakers! We\u2019re also working with South Asian content providers, particularly Star India. We\u2019re doing exciting things with them that will be along the lines of exclusive original content. We hope to build on that. It\u2019s really the pattern that almost all incumbent broadcasters around the world are following. You can\u2019t just rent things anymore and expect to be successful. You\u2019ve got to have something that gives you a differentiator, and original content is an important part of that, along with great service, great pricing and the ability to have great partnerships.<\/p>\n
\nSTEWART:<\/strong> We had a pretty good Ramadan lineup\u2014between the things that we bought or financed and our partners, we had more than 25 shows for Ramadan this year. But that is a bit of a drop in the ocean compared to the total number of shows that go out [during that period]. We make sure that we have something, but we\u2019re not expecting to try and win the Ramadan battle; that\u2019s a losing proposition. Anything we put out, we look to broaden the viewing windows throughout the year. Our Ramadan shows will go onto box set, binge-watch, catch-up services through the summer. I know viewership during Ramadan is extraordinarily high, but it\u2019s impossible for everybody to watch all the content that\u2019s been produced. It deserves to be watched, so we immediately put it into rotation on our other on-demand or catch-up services and our OSN Play service. A lot of so-called Ramadan content will actually be properly enjoyed outside of Ramadan anyway.<\/p>\n
\nSTEWART:<\/strong> We are at the mercy of the content owners. We have to negotiate as many of these rights as we possibly can. Ideally, I\u2019d like to have completely unfettered rights so we can test different ways of promoting shows. You can run it on a weekly basis or a daily basis and get different results. It depends on the popularity of the show and whether people are prepared to wait and stick with it.<\/p>\n
\nSTEWART:<\/strong> OSN and MBC jointly set up the MENA Broadcast Satellite Anti-Piracy Coalition, which has expanded its remit beyond just satellite to all forms of piracy. Most of the industry has now come together in a pretty coordinated action. The thing that is lacking is a proper regulatory framework to grow the media market to its full potential. That\u2019s not just to the benefit of the region\u2019s only privately owned media company\u2014that\u2019s us\u2014it\u2019s for the general betterment of the whole economy. [The industry is] losing hundreds of millions of dollars through having a very subpar media economy. The reason for that is the lack of a proper regulatory framework that governs both the protection of IP throughout the region and rigorous enforcement of any such framework. And [the industry needs] an appropriate competitive framework that defines and governs the behavior of anybody who wishes to play in the market. Unless we have a properly regulated, competitive framework, the media economy will not reach its full potential.<\/p>\n
\nSTEWART:<\/strong> No, it\u2019s gotten worse, by a multiple. It\u2019s not just sports; it\u2019s all forms of content. If you\u2019re a content owner, you\u2019re having a great time, but it certainly doesn\u2019t help the region. And it doesn\u2019t help consumers because it isn\u2019t sustainable.<\/p>\n
\nSTEWART:<\/strong> Sports is a niche business. We have a very good lineup of cricket, golf, rugby, fight sports, motorsports, cycling and American college sports, all of which appeal to certain audiences, fanatically so in some cases. It\u2019s not the main driver of our business. And to be honest, we are very simple about how we make decisions. We endeavor to be a data-driven business; we work out what rights are worth based on what we can see in the market, and what that opportunity is. They are straightforward decisions. If I\u2019m paying $100 and the bid is $300, you can make that decision pretty easily.<\/p>\n
\nSTEWART:<\/strong> Effectively, the pricing we put in place last year provided people with the ability to buy subsets: the general entertainment pack, the movies pack, the sports pack or buy them all. That was a break from the past when you had to buy everything.<\/p>\n
\nSTEWART:<\/strong> We\u2019re very excited about the reboot of the technical side of WAVO. We\u2019re excited about the partnership with Netflix. We\u2019re looking very closely at the possibility of increasing our Arabic-language content. I hope that the situation in the region, economically and geopolitically, begins to ease a bit, but those are matters beyond our control. All we can do is keep trying to focus on providing the best content that we possibly can, either through acquisition, creation or partnering; make sure our service is the best it can be; and make sure the pricing is as appropriate as we can get it for the pockets of the people who live here. And we\u2019ll keep lobbying governments and content providers about the need for a sustainable business model for the economy as a whole if it\u2019s going to prosper in the long run. Whether it\u2019s legal overbidding or pirate theft, neither of those two things is going to create a long-term and sustainable economy.<\/p>\n