NMIT Working Papers

Working Papers on New Media & Information Technology in the Middle East

Unscripted Television Programs and Corporate/State Concerns: The View from Nilesat

Posted by meaningfulconnections on September 6, 2008

Jacob Arback, Business Research International
Paper delivered at a the Middle East Studies Association, November 1999.

My particular contribution today is to explore the Egyptian government’s role in the region’s exploding television market and its influence in shaping what goes on the air nationally. As someone who has been both an observer of the State’s Broadcasting sector throughout this decade and an inside advisor to some of its most visible television and satellite projects, I can at least offer my impressions from the Corporate perspective. My premise at the outset is that the proliferation and popularity of unscripted television in Egypt is a direct, if unintended result, of a very scripted media and telecommunications strategy on the part of the Egyptian government.

Specifically, I would like to look at how the State’s massive investment in program production, broadcasting and satellites has affected its institutional legacy in the Middle East and its traditional monopoly position. Second, how is the State responding to the challenge coming from new private Arab television networks that have burst onto the scene over the last five years or so. These multi-channel private networks, such as Arab Radio & Television (ART) and Orbit, are relatively free to experiment with new program formats and have quickly become home to the most popular talk television programs. The new private channels are not of Egyptian origin. Rather, they are owned by wealthy Saudis, Lebanese Prime Ministers and Kuwaiti investment funds. The new channels have unleashed a competitive challenge to the traditional Egyptian programming monopoly, the response to which we will explore in the next few minutes. In short, the television scene today in Egypt and the Middle East has become a blurry mix of politics, revenues and ratings with the latter two on the ascent. First a little backdrop.

Ironically, it is Saddam Hussein who may be most responsible for opening the floodgates of satellite-delivered television in the region. The power of satellites was impressively demonstrated by the terrestrial rebroadcasts of CNN’s satellite signals during the Gulf War. Egypt and Bahrain were the first states to air these live unedited news broadcasts on their State channels, a somewhat risky move, and Middle East television hasn’t been the same since.

Egypt, the heart and soul of Arab broadcasting and media, immediately began to plan how it would harness new satellite technologies and pent-up consumer demand. The first move was to launch a satellite television channel called the Egyptian Space Channel (ESC) in 1990 on Arabsat, the regional satellite communications system serving Arab League members and headquartered in Riyadh. When the Space Channel launched, Egypt had only recently been readmitted to the Arab League and to its privileges such as the right to lease Arabsat’s satellite capacity. But Egyptian officials remained bitter about their exclusion from the planning and design of Arabsat in the early 1980s. It was clear that Arabsat was not going to be part of Egypt’s long-term media strategy. Officials such as Minister of Information Safwat Sherif and the ERTU Chairman, Amin Bassiouny, had no intention of putting the fate of Egypt’s treasured media sector in the hands of Saudi and Arab League decision-makers.

Instead, the government’s leveraged what it already had – – control of the country’s broadcast sector and legal access to it, voluminous program and film archives, production infrastructure and by far the largest viewing audience in the Middle East. The missing piece was program distribution. Enter Nilesat.

Nilesat-1, the crowning achievement of the State’s media strategy, was launched on April 28,1998. It was the first satellite system successfully put in orbit by an individual Arab state. Nilesat-1 was not about providing long distance telephone connections for the Middle East or private data networks. Arabsat could handle such applications for its Arab League members. Nilesat-1 was first and foremost about the distribution of Egyptian, international and other Arabic language television programming throughout the Middle East from an Egyptian national satellite platform. To further accentuate the government’s symbolic intentions, Nilesat’s service was not switched on until nearly a month after launch, on May 21, to coincide with Egypt’s Media Day (Nilesat-2, Egypt’s second satellite was launched on August 17, 2000).

If I could have been a fly on a few choice walls immediately after Nilesat’s successful launch, I might have heard a deep sigh of relief from Safwat Sherif, Egypt’s powerful Minister of Information and trusted aide to President Mubarak, who championed the project from its beginning in 1993-94. I might have heard collective sighs of relief from the officials atop the ERTU who report to Mr. Sherif. The ERTU is the majority shareholder in the Nilesat Corporation at 40%, the largest producer of television content in the region and, as I previously mentioned, the owner of enormous national television and film archives. Nilesat provided justification for the ERTU to create even more channels. Nilesat, although now a private company, was born on the 25th floor of the ERTU television tower, with ERTU engineers designing its beam patterns and directing its procurement.

The new private television networks and pay TV operators, most of them Saudi-backed, were also relieved. They needed access to Egypt’s 50 million TV households via small private satellite antennas. Nilesat was their ticket if they chose to shell out US$ 2.5 million or so annually in lease fees. They all did.

Arabsat officials were probably not all that relieved, as Nilesat was its first major competitive threat in the region. Arabsat had, in recent years, successfully consolidated its position as the dominant satellite system in the region and was moving into television distribution itself. Publicly, Amin Bassiouny, at the time President of the ERTU, stressed that Nilesat was in fact complementary, not competitive to Arabsat. Whatever the public pronouncements, competition for Arab viewers had arrived.

But Nilesat was only one piece of the State’s grand mission. Two other pillars of the government’s scripted strategy deserve mention:

    1. The Government inaugurated phase one of its Media Production City, a 3 million square meter mega-complex that will eventually hold 13 production studios, outdoor shooting areas ranging from pharoanic village scenes to sets for films such as Nasser 56, hotels, theme parks and much more. The US$ 1 billion “Universal Studios-like” project, due for completion early next year, will certainly ensure that Egypt’s TV and film production infrastructure will remain a nationally-controlled resource.
    2. The creation by the ERTU of two international satellite channels, the Egyptian Space Channel (ESC) and Nile TV, that carry via satellite select Egyptian programs to expatriate Arab communities in the United States, Europe, Latin America, Australia and Asia. ESC was the region’s first Arabic satellite channel, launching during the Gulf War on Arabsat. Nile TV, aimed at overseas Arab communities, came next. A few years back, Egypt’s Minister of Information, Safwat Sherif, was reportedly incensed that the BBC was planning to launch an Arabic language news service for the Middle East. He decided that if the Europeans plan to come into our territory under Arabic cover then we would go to Europe. Nile TV was born.

With the three major pillars of Egypt’s strategy in place or under construction – – Nilesat, Media Production City and Egypt’s international satellite channels – – the gloves started to come off. Amin Bassiouny, himself a proud product of Sawt al-Arab and the golden years of Egyptian radio, reminded a New York Times reporter a few years back that “Everyone must buy programming from us. There are no Saudi films. And the little that other countries produce uses Egyptian directors, actors and technicians. We were the first to use Arabsat to transmit in 1990 and neither the Middle East Broadcast Center (MBC is another Saudi-backed network) or Arab Radio and Television could stay on the air without our programming. There is no comparison between them and us: you can’t compare the original with the shadow.” (New York Times, April 15 1996).

Let’s now return to our premise that unscripted programming in Egypt is a result of the government’s carefully scripted strategy. The Government desperately needed to position Nilesat as the “satellite of choice” for the Arab world and as a showcase for its own ERTU programming, particularly as more Egyptians could directly access the satellite with a small antenna and decoder box. Here is where some of the unintended consequences of Egypt’s carefully scripted strategy began to emerge. All channels currently broadcasting either terrestrially in Egypt (the government’s 9 channels) and those airing on other satellite systems were encouraged to lease space on Nilesat’s digital satellite platform and were offered aggressive lease rates to sign on. Foreign pay TV packages such as Viacom’s Showtime bouquet of 12 English language channels were also “encouraged” to lease space if they ever wanted to operate in Egypt. Success was imperative. If Egypt could not fill the satellite quickly with the region’s major broadcasters, the project would be seen as a failure. More importantly, prominent government figures would be disgraced and the political opposition could reassert its claim that spending $158 million to put a satellite in space, while poverty widened on the ground, was an irresponsible waste of money.

In Nilesat’s intense effort to fill up its new satellite with all available channels, two powerful genies jumped out of the same bottle: 1) viewer choice and 2) competition to Egyptian government programming. All of a sudden, government channels and its ERTU lineups were under the market’s microscope. After decades of state-owned television, the new private networks airing on Nilesat brought fresh programming choice and new program formats to eager audiences. ERTU executives were getting a wake-up call due in no small part to the success of its own subsidiary, Nilesat. The fact that many of these new television networks and individual channels were backed by Saudi mega-businessmen made the wake up call even louder for Egyptian officials. The stakes were high. The nearly 250 million Arabic speakers constitute nearly 50 million television households across the region. That figure is expected to rise to 70 million TV households by 2005. These TV households represent significant advertising revenues, a potentially rich pool of future pay television subscribers and perhaps future Internet users.

From Nilesat’s perspective, all broadcasters – – private and public – – who pay their monthly leases on time are good customers. More importantly, Egyptians took quickly to the new choices. But the new networks needed new format and looked to their counterparts in the U.S and Europe for inspiration. Orbit, the first digital direct-to-home service in the Middle East in 1994, fired the first shot a few years after its launch, airing Imad Adib’s popular talk show, which some have dubbed the local version of Larry King Live.

Not to be outdone, Arab Radio and Television (ART) followed suit with its own talk shows, filmed live from the al-Ommam restaurant-turned-studios in Giza. “Ya Hala”, an open forum with a call-in format, entertained everything from sexual conduct to the rights of celebrities in public life to the Mad Cow disease and quickly became the talk of Cairo. Bainak wa Baini, another talk format from ART also tackles topics relevant to people’s daily lives. And in what would make a Western studio executive break out in a cold sweat, ART created a call-in show, Isna’ kharitak, “make your own grid.” Callers play programming executive and offer their “takes” on where popular shows should be placed in the daily lineups! ART has been careful to provide cover for controversial topics by inviting doctors to sit in on, for example, sexual discussions, sociologists to sit in on garbage collection debates and psychiatrists to speculate on how young men are coping with delayed marriages due to declining economic prospects.

The ERTU watched these private upstarts closely, and knew it had to respond in kind, even if it meant copying some of the popular, but politically sensitive unscripted formats. The ERTU responded with its own versions of the talk format, but with decidedly more sober topical parameters. The ERTU even tried to hire Hala, of “Ya Hala”, but her private sector employer (Sheikh Saleh Kamel of ART) made it clear to her after two days that it was either “us or them.” She stayed on the private side.

So where does that leave us today? By the fall of 1999, the intended outcome of Egypt’s satellite and media imperatives were partly accomplished:

    • The Nilesat-1 satellite was nearly full with the region’s key broadcasters with Nilesat-2 on order;
    • The Media Production City was nearly complete;
    • Egypt was once again the talk of the Media trades.

The unintended outcomes were also becoming evident:

    1. Popular, non-Egyptian programming now airs on Nilesat side-by-side with Egypt’s state-owned channels; these private channels are ratings-driven and relatively free to experiment with program formats and subject matter
    2. Nilesat finds itself in a pitted battle with Arabsat and its predominantly Saudi management, for satellite television dominance in the region;
    3. Egyptian viewers are courted for their loyalty like never before, and are realizing their power and influence over ratings;
    4. Unscripted program formats such as talk shows and roundtable discussions,

broadcast via Nilesat by private Arab networks, are among the most popular shows on television; These shows challenge ERTU programming for popularity and the government labels some of them as tasteless and an embarrassment. But there is little the State can do.

The government, after some initial paralysis, has responded in a familiar way. It has tried to co-opt the competition by producing its own series of talk shows, and many of them, albeit reflecting more bounded themes and cloaked in official sanction. The government’s other tactic has been to simply shut down programs whose topics and ensuing discussions were deemed unacceptable.

Today, my sense is that the government feels confident in its current position. But the massive investment in these inter-related media projects, (over $1 billion for the Media Production City and around $320 million for two satellites), have not guaranteed that the State’s traditional programming themes and predictable formats are necessarily consistent with what viewers want to watch. And viewers today have a great deal more influence over what is broadcast than ever before. Which leads me to some final thoughts.

Today, the broadcast and satellite sectors have begun to splinter into private and public camps, each basically fending for itself. Nilesat, a private company, aims to be the dominant regional satellite platform. Nilesat is concerned with filling the satellite with popular networks and channels and proving itself a commercial success. For its part, the ERTU is by far the dominant program provider in the region, and will be for the foreseeable future. But it now faces competition like never before. From what I hear, the ERTU is currently recruiting outside professional talent, some of which left the State sector years ago, to add new life to program production and scheduling. The ERTU is also trying to better manage the licensing and distribution of its new programming and extensive archives.

On one hand, I believe the State is reluctantly accepting the reality and popularity of unscripted program formats, while playing its traditionally strong cards in drama and serials. Second, program improvement, spurred by private television, is high on the ERTU’s agenda. Egypt will not easily roll over and allow Saudi-backed, private television networks to win popularity contests in its own backyard. Third, the sheer volume of programming the ERTU is capable of churning out may take the edge off some of the individual shows and niche formats gaining popular attention. Egypt has the advantage of drowning out private networks by sheer volume and control of the distribution channels. Satellite transmissions are still only picked up by a small, but rapidly growing percentage of Egyptian viewers, primarily the elite and middle class. Terrestrial broadcasts, on the other hand, reach tens of millions of viewers of all classes.

Finally, Egypt’s profitable broadcast sector will almost certainly remain in State hands for the foreseeable future. This means that the government will continue to control massive production facilities, a powerful satellite-distribution platform and all of the licenses non Egyptian pay television operators require for access to its market. Consequently, it will retain a significant influence over what people will be watching even though it no longer enjoys complete monopoly conditions like it did before the 1990s.

What we may end up seeing is more experimentation with program formats, such as talk shows, on private Arabic and foreign pay television packages. These pay packages are not cheap (US$ 30 – 50/month) and mostly serve the wealthy elite. The government itself is a partner in Cable Network Egypt (CNE), a private pay TV venture. Meanwhile, the government’s free-to-air programming – – both terrestrially delivered and satellite delivered via Nilesat – – will try to update its look and, much more gradually, its formats and subject matter. In the meantime, private networks produce and air whatever they think their viewers want and hear very little from the State, except its occasional disapproval.

In the end, the government’s sights are focused on the bigger prize: maintaining its “rightful” place atop the Arab Broadcasting and Media world and enjoying the profits that follow. Here it can claim victory, no matter what is being relived in Cairo’s coffee shops and office buildings from last night’s talk shows. And victory for the government’s new media sector, real or symbolic, is what is important right now.

The Author welcomes comments, corrections, and feedback on this text, via email to jarback@primenet.com.

*BRI, based in Los Angeles, advises companies in the international Direct-to-Home (DTH) television, satellite and satellite services businesses and gives workshops to U.S. executives on “Doing Business in the Middle East”.

Copyright 1999-2000 by Jacob Arback. All Rights Reserved. May not be reprinted in any format without the Author’s permission.


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