OSN forces pirates to walk the plank

Television operator OSN reports a 34 per cent increase in subscribers following clampdown on piracy.

David Butorac, the chief executive of OSN, is confident his company’s subscriber base will significantly increase this year. Pawan Singh / The National

The television operator OSN claims it will grow its subscriber base by 34 per cent this year, following a clampdown on the illegal piracy of its channels.

The Dubai network, which broadcasts across the Middle East and North Africa region, said it had noted a rise in customers and a reduction in subscription cancellations since it launched an anti-piracy drive last December.

"In 2011, the subscriber base of OSN will increase by 34 per cent," said David Butorac, the OSN chief executive.

OSN is one of the region's largest pay-TV operations, charging subscribers monthly fees of Dh87 (US$23) to Dh349, depending on the number of channels they receive.

The network had been losing subscribers to users of Dreambox set-top devices, which allowed consumers to receive broadcasts for a fraction of the regular rates.

Piracy costs the overall pay-TV industry in the Arab world an estimated $500m a year, according to one recent estimate.

But OSN last year launched a set-top box with improved security in a bid to eradicate the illegal reception of its broadcasts.

Mr Butorac said that was key to boosting subscribers through "the combination of securing the platform, and continuing to add relevant content and improving our marketing". "The initial push came from the shutdown of piracy. On December 19 2010 we cut off the Dreambox. And because of that, our sales literally jumped overnight, and have remained high ever since. The other significant factor that has contributed is that in the last 12 months we have halved our churn rates [customers discontinuing subscriptions]."

Mr Butorac declined to disclose the actual numbers of customers the network has.

But according to estimates by Informa Telecoms & Media, OSN currently has 552,000 subscribers, and this is forecast to grow to 995,000 by 2016.

Al Jazeera, which holds the regional broadcasting rights to the next three Fifa World Cups among other sports tournaments, is ranked by Informa as the largest pay-TV operator in the region, with 1.85 million subscribers forecast for 2016.

OSN recently signed a deal with the Nasdaq-listed technology company KIT Digital, which provides software for the delivery of video content over the internet, mobile and IPTV.

The online platform, which will provide a "catch-up" service and a few channels streamed live, will be launched early next year, Mr Butorac said.

Mr Butorac spoke this week at the BroadcastPro Summit in Dubai. OSN won an award at the event for its new sitcom, Hindustani, the first original Arabic-language production to be commissioned and co-produced by OSN.

Of all Arab households that have a television, just 8 per cent pay to receive broadcasts, according to Informa.

According to the Arab Media Outlook 2009-2013, just $22 per capita is spent on advertising in the Arab region, compared with $462 per capita in North America and $273 in western Europe.

Karim Sarkis, the executive director of broadcast at Abu Dhabi Media, which owns and publishes The National, said revenues in the TV industry could be improved by better measurement of TV audiences, which help advertisers justify their spending and via product placement.

"We don't take advantage of things like product placement … we have just ignored it as a viable extra stream of revenue," he said.