Rotana plays up mobile deals

Rotana, the Saudi media group, has signed a deal with Meditel of Morocco in its latest aggressive push to team up with regional telecommunications companies.

Mzaar Kfardebian, February 2, 2010: Yousef H. Mugharbil, President – Rotana Digital Entertainment / Rotana Group, speaks to the media during a conference at the MENA Cristal Festival at the Intercontinental Mzaar Kfardebian. ( Photo by Philip Cheung )

Rotana, the Saudi media group, has signed a deal with Meditel of Morocco in its latest aggressive push to team up with regional telecommunications companies and distribute Arabic content through low-cost mobile and internet subscription plans. The Meditel deal was Rotana Digital Entertainment's ninth venture with a telecoms group in less than two years.

The majority of the deals were struck in Middle Eastern countries such as Iraq, Jordan, Bahrain, Kuwait, Lebanon, Sudan and the UAE. Rotana, the world's largest Arabic media content owner, has teamed up with telecoms groups like Zain, Vodafone and du. "Today we are selective," said Yousef Mugharbil, the president of Rotana Digital. "We sign with companies that can provide an entertainment experience.

"I am not interested in consumers buying a song, or 1,000 songs. That's not the goal. If you enjoy music, enter the lounge." The "lounge" means unlimited access to Rotana artists on a mobile phone for about US$5 (Dh18.36) a month. The charge is made through the telecoms company's billing system, but importantly, Mr Mugharbil said, there were no extra charges to the consumer, or revenue for the telecoms, for sending the data. Rotana only makes deals with telecoms that agree not to add data charges to the price of content, he said.

"I do not want to control the cash register. "I want to manage the consumer price, meaning if somebody wants to sell the song for 99 cents, but it costs him $1.99 to download it because of the data charges, I don't accept that," he said. "Today, I tell the operator I am willing to sell the song for 40 cents if and only if what the consumer pays is 40 cents." Telecoms may not like giving up the revenue from data fees, but in general they represent less than 5 per cent of their overall data revenues, which mostly come from charges for SMS text messaging, he said. And in the longer term, the trend is that telecoms are going to have to increasingly play ball with media companies as market saturation slows the growth of voice calling and other basic services.

"We are telling the operator, before the going gets tough, 'build this content so you can shift from voice to content'," he said. "Better to make this change when the going is good." Rotana Digital claims that it has 85 per cent of the music market among the Arab world's more than 300 million people, and 60 per cent of its film distribution and production market. Although its offerings are on multiple platforms, Rotana focuses on distributing its content through mobile phones, largely as a way to fight piracy. Illegal downloading on the internet is a "chronic problem" in the region, Mr Mugharbil said.

While the company has taken significant efforts to curb the practice, such as threatening legal action against companies that advertise on illegal downloading sites, in general it prefers to sidestep the problem by making attractive offerings on the mobile. "We moved to the entertainment experience on the mobile for the obvious reason that it is not socially acceptable to pirate from the mobile," he said.

"No one will ever ask you for your mobile. "I carry all my music in mine, and if I paid that 40 cents for a song, nobody would ever ask me to copy it because I would just say 'go get your own'." Central to preserving this security is a low price. Digital content, whether it is sold by the song or by the monthly subscription, can be sold legally, but only at a price of about $3 to $5 a month in the Middle East, he said.

Any more than that and you push your customers onto the illegal download sites. "I am most concerned with making sure that there is a reasonable price for all, so that everybody can enter," he said. "You pay the 100 riyals or dirhams, you enter and you have everything. "The key is to make it affordable and reasonable."