Video is in demand, as never before. Gone are the days when if you missed an episode of a television series you had to borrow a VHS tape from a friend or wait for a far-distant repeat of the show.
Now consumers are used to watching what they like, when they like, and they do not have to miss a thing. Amid mounting competition from online video sites such as YouTube, established TV and other media companies have felt compelled to provide content in more flexible ways. Take video on demand (VOD). The technology allows users to view series, films and music clips over television, mobile phone and the web. This allows viewers to choose when they begin watching as well as the ability to pause and rewind shows.
"The way people consume video has changed dramatically, particularly in the West and in Japan," says Joseph O'Halloran, the editor of the British-based industry website Rapid TV News. "There's been a revolution, which has been led by consumers. VOD is a natural part of the everyday viewing experience." While VOD services have been slow to emerge in the Middle East, fierce competition is expected in the sector soon, especially in the UAE.
Much of this will be fought out between Etisalat and du, with the latter already operating a VOD service over its internet protocol TV (IPTV) platform. Previously, du was allowed to operate only fixed-line services such as IPTV in select districts of Dubai, albeit with the advantage of exclusivity. But the recently announced liberalisation of the telecommunications market will see Etisalat and du competing for the first time across the entire UAE.
This will push both companies to raise their game in the price of services and in the content they provide. Analysts point to du as leading the way in VOD, given the launch of its pay-per-view service in December and the recently announced subscription VOD service. The latter, priced at Dh75 (US$20.42) a month, gives viewers access to an unlimited number of movies, TV series, music and children's programmes.
With new competition from du looming, Etisalat's E-Vision cable service plans to launch its long-promised VOD service. Humaid al Suwaidi, the chief executive of E-Vision, says an announcement on the launch will be made "in the next two weeks". "VOD and subscription-VOD is the way we believe people will be watching TV in the future. We've realised its importance, and we've been working on it," Mr al Suwaidi says.
Du says it expects VOD to become "the prevalent distribution method for movies. The current price advantage of linear channels will be eroded by new business models." The Orbit Showtime Network (OSN), a satellite-TV operator, also plans to enhance its VOD offerings. The network operates a VOD service as part of existing packages but from September will launch pay-per-view, allowing subscribers to watch newly released films for between $4 and $5 per film.
Marc-Antoine d'Halluin, the president and chief executive of OSN, says the network is negotiating with content owners over the new pay-per-view service. "On-demand is the future for sure. When people start using it, they only want to use that because it's so convenient," Mr d'Halluin says. Etisalat and du aside, regional telecoms companies have been slow to launch VOD services. The technology also faces hurdles in other countries in the region. One is the unwillingness of consumers to pay for content, given the dominance of free satellite TV in the region.
"The history of VOD in the telecoms [sector] is a bit mixed," says Ian Sanders, the lead partner for telecoms, media and technology at the consultancy PricewaterhouseCoopers Middle East, in reference to the global market. "To make it work, you need a very strong underlying network structure, which both the UAE operators have." While Mr Sanders says the market for VOD is "potentially very strong", he recognises that there could be barriers elsewhere in the region. There is, for example, Mr Sanders says, a "shortage of quality Arabic content", and VOD works best where there is a "relatively concentrated population" such as there is in the cities of Dubai and Abu Dhabi.
But such barriers are not insurmountable. "Would VOD work in other markets? Yes, of course," says Mr al Suwaidi. "It is most likely that it will be a good proposition in the other parts of the world" where Etisalat operates. Interest in VOD is strong among regional communications companies, says Georges Dabaghi, the general manager for the Middle East of the On Demand Group, a UK-based subsidiary of SeaChange International. On Demand Group manages the on-demand and pay-per-view businesses of providers such as Virgin Media in the UK and du in the UAE.
"We're being consulted by a multitude of operators in the Middle East - from Pakistan to Egypt. We have the capability to deliver across the platforms - TV screens via cable or IPTV, over the web, or to a 3G handset," Mr Dabaghi says. Mobile VOD is one area of development. "People using their mobile are less likely to watch a two-hour movie and may opt to watch TV series, clips or music videos," Mr Dabaghi says. "You repurpose the content to fit on the screen ? And we will see Middle East networks testing this in the very near future."
On Demand Group negotiates for content with owners such as Paramount, Warner and Sony and packages it for VOD providers such as du to sell to consumers. "We go out to the studios. That's where our main competitiveness is - our good relationship with the studios," Mr Dabaghi says. "We're not competing with the movie theatre," he adds. "It's all about people saying 'I didn't watch all the [1980s] Indiana Jones movies when I was 15 years old ? And now I can watch all three'."