Video on demand puts du in the frame

The UAE telecommunications operator du is close to finalising a deal to offer video on demand services over its new web platform and internet-TV service.

Extending video on demand services over the web will mark a new revenue stream for du.

The UAE telecommunications operator du is close to finalising a deal to offer video on demand (VOD) services over its new web platform and internet TV service.

The company is in discussions with the On Demand Group, the UK company that provides VOD services over du's internet protocol television (IPTV) network. Under an extension of the existing deal that is under negotiation, similar services would be offered over du's Anayou web portal and Nxt internet-TV console.

VOD allows users to watch TV series, films and other video content whenever they want, with the option of pausing and rewinding shows. It is currently available over IPTV in the UAE, through both pay-per-view and subscription models.

"We are extending these content management services for du on the main IPTV platform to be carried on Nxt and on Anayou," said Georges Dabaghi, On Demand Group's general manager for the Middle East.

"We're doing that deal, it's going to be announced in due course," said a senior executive at du, who declined to be named. "We're close to finalising a deal [with On Demand Group]." Extending VOD services over the web will provide a new revenue stream for du.

Anayou - which will showcase music, videos, gaming and news as well as a social network service similar to Facebook - will be geared towards the entire Arab world. It will also be available via Nxt, du's internet TV service that will be offered across the MENA region. The Nxt console will supplement regular TV channels by overlaying social networking, applications and VOD services.

The deal marks "an extension of that [VOD] platform within the umbrella of du services," said Mr Dabaghi.

"Today, we are managing the video-on-demand service for du. And that starts with acquiring the rights of content from studios like Hollywood, Bollywood and some Arabic sources.

"We administrate it, so there is an aspect of compliance: editing it; making sure that it fits to the requirements in the UAE; encoding it to the right format to the platform that will carry it; scheduling it and agreeing the promotional and marketing campaign that du needs to do."

"IPTV … today is restricted to the captive area of du's [network] - in the Marina area and places where du has an infrastructure for IPTV. And what we are doing is extending the content services for Anayou and for Nxt," he added.

On Demand Group, a subsidiary of SeaChange International, also manages the on-demand and pay-per-view businesses of providers such as Virgin Media.

Mr Dabaghi said there was great "growth potential" for VOD in the region. For "transactional VOD", where users pay each time they view a film or TV show, he targeted year-on-year growth "in excess of 50 per cent". And for "subscription VOD", where users pay a flat fee for unlimited access to content, he said "40 per cent-plus" of IPTV subscribers was the target.

The company said it was talking to "virtually every operator" in the Middle East telecoms industry about providing VOD services. "If all these VOD services start to take shape in the UAE, it's infective. Saudi Arabia will want the same and Qatar will want similar. It's a service that matures and the end-user expectation will be driven by what they see in other countries."

Mr Dabaghi also said On Demand Group was in "general discussions" with du's rival Etisalat.

Mario Pino, the director for business development and strategy at Etisalat, confirmed such discussions were "ongoing". He said Etisalat would launch a "competitive" VOD offering by the end of the year.

He did not say whether On Demand Group would be involved in the launch.