No. 5, Fall/Winter2000

Special Issue:
The Arab World

Turning ART Around

An interview with John Tydeman, CEO, Arab Digital Distribution

John Tydeman is CEO of Arab Digital Distribution (ADD), the platform company for the Arab Media Corporation (AMC) group which owns ART. ADD creates and manages bouquets of channels and markets and distributes these channels across Europe, North Africa, and the Middle East. Tydeman, who is thought of as "the fireman" or "town tamer" of transnational broadcasting, honed his management policy skills first in Australia teaching in MBA and policy programs at the University of Canberra, and then in America at a research and consulting center applying statistical techniques and economic analysis to deal with the complex cultural, political, and demographic problems a corporation might face.

Since 1985 he has been on board or an adviser to half a dozen or more major media projects, including ten years with Astra as it moved from insignificance to the most successful satellite program the world has ever seen. His associations include Zee TV and News Corp—Tydeman was the CEO of their joint venture ATL—and for almost two years Tydeman was CEO with Showtime in its startup phase. He joined ART last spring.

TBS Senior Editor S. Abdallah Schleifer and Managing Editor Sarah Sullivan interviewed Tydeman in Cairo.

John Tydeman: There seemed to me to be two main things we weren't doing. The first is that we weren't capitalizing on the assets of the group. And this was perhaps for all the right reasons—it's easy in hindsight to see what you think are mistakes. First, ART had started with a bouquet they called 1st Net or al-Awal, and they let that fall when they moved to a la carte channels. That in itself is fine, if you want to be in the channel business. My point to the board was very simple: you have a choice. You can be in the channel business, you have half a dozen channels, make them really good, make them profitable, and it's a nice business. Or, you can be in the business of having a platform—but if you want to have a platform you can't sell three or four a la carte channels. You've got to have a platform. So that was the first area, which was to move from a la carte channels to a platform. I presented this to the board, which said yes, we'd like to do that.

The second area was again to pick up on where ART had a great strength when it started, which was in terms of distribution. It had lost the way a bit. When it started it was free-to-air, and it still has a free-to-air channel. But what the group had decided, which I think made sense, was that at some point in time, if you have the programming and the market understanding you could move from free-to-air into pay-TV. And that's what it had done.

But pay-TV is of course different than free-to-air. With free-to-air your concern is with the ratings, that you have the program at 8:00, that you have the maximum advertising revenue linked to the maximum number of viewers at that time. Pay-TV is about getting viewers who pay you every month. It doesn't matter if you have no top-rated program at all, as long as you have a lot of viewers. To get viewers you have to have a distribution network and a sales strategy to put in place across the region. We started trying to build an independent network, and it was difficult in the region because of the question of experience. A lot of the distributors and dealers had been involved since the Gulf War in selling satellite reception equipment, but they'd never been involved in collecting money and managing subscriptions. There's a huge difference between putting up an antenna, collecting your money, and saying "shukran," and knowing that next month there's going to be a subscription. So the second area I saw that needed a lot of attention was for us to really get back to basics and clean up our distribution network. Then everything else falls into place: you've got the content, you manage the content, package it, price it right, and you've got the infrastructure to support the installation and distribution across the region.

TBS: What have you done in terms of building content?

Tydeman: The way we've addressed content is twofold. First of all, I look after bringing third-party channels to the bouquet, so my job has been to build on the base we have of Arabic content within ART. In doing that, we've structured the group, as you would do in any transfer process situation, where ART in fact sells its channels to the platform, the same way Fox News sells its channels to B-Sky-B or Zee to Star. So we've now established that as a formal principle, which is very good because it has helped make the demarcation very clear, and ensures that people in the different areas now become responsible rather than being part of a giant conglomerate. ADD has been addressing the age-old questions like what's my target market, where do I want to be, how do I get there, who are my competitors, etc.

We've done two things: the expansion of the Arabic bouquet, and the introduction of the Asian bouquet, which has been quite an interesting opportunity for us. The expansion of the Arabic bouquet came about because at the very start between Showtime and ART, it always seemed to me very strange that you have one group selling Western—even though that was me in those days—and one group selling Arabic. My experience from India and other markets was that probably the household wanted a little of both. Sure, there would be households that spoke only Arabic and wanted only Arabic. There are of course the expatriates who want only English. Third, there are the people who are upwardly mobile, educated, or ambivalent or want to maintain their local values on one hand and also want to have the best of Western entertainment. There are a lot of families who want to sit in the morning and watch CNN then come home at night and watch Al-Jazeera, and assimilate the best of both cultures. By focusing just on one part of that we were missing a very large dimension.

In the meantime the world had changed, and the Arabic free-to-air programming had multiplied like crazy. So we were caught: the business we'd identified rightly as an opportunity had been inundated with free-to-air, and Western programming was being held in some high esteem—the khawaja complex; people would say, I know these programs are rubbish, but it's Western, and your program is Arabic. It occurred to me then that while you should be careful with that, our viewers should have the right blend of programming. So that's what we've been working on, and over the next two months you'll see some radical changes in the Arabic bouquet. It's started already; we've now got eleven or twelve channels in the bouquet, up from five or six, plus three new additions B4U Music, Fox News, and Bloomberg.

We've always carried TNT, but we let that be an a la carte, and we incorporated it back into the bouquet—of course TNT is an anachronism now because the Turner group has split it into Turner Classic Movies and the Cartoon Network. We took both of those channels, plus CNN, which has always been intended to be part of the ART bouquet. That means we immediately added kids' programming, news, and classic Western movies. We then added a music channel, MCM from France. continued

Next page: Tapping into an Asian market