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Battle for eyeballs

From revenue generation to programming ideas, Oman TV’s Channel 2 is inventing the wheel
BusinessToday reports

In November 2006 Oman TV launched Channel 2, officially called Oman TV Programme 2, positioning itself as a channel for the young, with a big emphasis on sports-based programmes to strike a chord with its target audience. With Oman TV already boasting of a 24-hour channel, the rationale behind the new channel (4pm-1am) is intriguing. Says Abdulla al Abry, director general, Sultanate of Oman TV, “With a number of official ceremonies, sporting and entertainment events taking place simultaneously, we found that 24 hours was not enough to accommodate the needs of all our viewers.”

Setting priorities
Says Zam Zam al Rashdi, assistant to general manager, Channel 2, “Sports-based prog-rammes make up anywhere between 60-70 per cent of the content.” While the idea behind focusing on sports is undoubtedly a good one in a country where the youth is so actively involved in sports, particularly football, curiously enough, earlier last month Channel 2 announced that it would not be telecasting the 18th Gulf Cup from Abu Dhabi. The primary reason was the fact that the cost of telecasting international matches is prohibitive, but at the same time, going by the numbers that gather around TV screens throughout the country to watch football matches, this event was the perfect vehicle to launch or spread the word about Channel 2. Luckily enough, the telecast rights were subsequently secured mid-month and the matches were telecast live.

Winning the rights to telecast big-ticket events to establish its reputation and gain viewership is not a matter of choice for Channel 2, irrespective of the big bucks involved. Says Rashdi, “A small league match costs over US$3,000 (RO1,170) to telecast, the cost of big matches can run into millions of dollars. With the rights being sub-contracted to companies which sell it to individual channels, the whole exercise has become a money making proposition.” Realising the enormity of the problem, the channel is looking forward to getting more money in future from the Ministry of Information’s budget, that will enable it to commission more such events.

So far Channel 2 has the rights to telecast French League football matches and it also showed a live telecast of the recently conclu-ded 15th Asian Games in Doha. Apart from live programmes, the channel has other sports-based programmes like Al Barza, where sports professionals talk about issues; Al Damri, a discussion about the national teams and Arma, a programme on sports.

In addition to sports, the channel has commissioned a number of programmes on lifestyle and entertainment to connect with the younger audience. Says R Rengarajan, media manager, Mediaedge, “The production values and content on Oman TV (particularly Channel 1) is more conservative and dated compared to that on the UAE, Bahrain and Qatar based channels which look more fresh and modern. This results in the viewers shifting from Oman TV to these channels. Channel 2 is trying to bring in more modern programming.”

Says Naeem Taher, research planner at Sabco Art that makes some of the shows aired on Channel 2, “The brief from the channel is to make light programmes and we adhere to this while generating content.” So there are prog-rammes like Huva (Eve) which discusses fashion trends, tourism based programmes and Top of the Pops, the only English programme on the channel. The channel produces almost half of its programmes in-house. The rest is outsourced – like Sabco’s Huva and Magna (a cookery show). To bring in the youth angle, another idea is to have today’s youth read out the works of famous poets of former times.

On the funding trail
The channel has worked out a completely different, and possibly restrictive, revenue model from what has been seen so far in this business worldwide. It has signed up with Oman International Bank (OIB) and the OTE group as its principal sponsors. What this means is that OIB and OTE have the first choice to advertise on Channel 2 and there is a contract that bars any of their direct competitors from taking advertising slots on the channel.

Now consider this: 42 per cent of the total ad spend in Oman is accounted for by automobiles, telecom and banks as per the BusinessToday survey (published in March 2006) based on the full year 2005. With OTE and OIB in place, the rest of the automobile (that accounts for 18.3 per cent or RO4.18mn) and banking (9.19 per cent or RO2.10mn) sectors – traditionally the top ad spenders in Oman – are taken out of the equation. Additionally, says Rengarajan, “Though companies from other sectors like a paint or a cement company can advertise, the choice still rests with OIB and OTE.”

The reasoning behind this arrangement is that it assures Oman TV a regular revenue stream and OIB and OTE get exclusive advertising rights for the duration of the contract. Sources say that this contract is for five years, whereby the companies pay a fixed sum of money to the Ministry of Information in return for airtime of their choice. Advertising rates are also quite low compared to Al Jazeera or Al Arabia. A prime time ten second spot will cost RO130 for local companies and RO260 for international companies. However, even with low rates, the first concern for advertisers remains reach.

With satellite TV dishing out a huge variety of channels to suit every need, what is the future of Channel 2? Says Abry, “When people say that penetration of our channels is low in Oman, this is not based on data or statistics but on opinions.” But perception is often what reality is all about and advertising revenue will always be a challenge in such circumstances.

Adds Rengarajan, “The absence of any authenticated data on viewership makes the task of buying air-time a difficult exercise.” Strangely enough, Oman TV, which used to gather viewership data a few years back, has stopped collating these figures now.

Another option that is being toyed with is introducing a ticker on which small and medium enterprises can advertise. The service will be accessible by SMS, helping the channel to tap into a large client base. The idea though is still at a drawing board stage and its efficacy remains to be tested.

The final nail in the coffin as far as the new channel’s ability to reach out to a large audience is that Channel 2 uses Arabsat (one of the satellites that cover the Gulf region), while most viewers in Oman use the Nilesat platform. Oman TV (Channel 1) also uses Nilesat. Reasons Abry, “We chose Arabsat as we have had a longer relationship with Arabsat compared to Nilesat. Secondly, as we are just starting out we thought that we could test the waters by being on Arabsat.”

With over hundreds of Arabic channels (quite a few with high quality production values) on air, Channel 2 faces a tough challenge in attracting a dedicated viewership. However, the channel is confident of its ability to wean viewers from its competitors. Says Abry, “Our USP is that we showcase the values, customs and achievements of our society. This is something that no other channel has to offer.” Media analysts are less than enthused about the channel’s prospects. Says Rengarajan, “With low TV penetration, it will be difficult for Channel 2 to get new viewers. What may happen is that some viewers might shift from Channel 1 to Channel 2.”