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Nilesat: Current Challenges and Future Trends

By Hussein Amin, TBS senior editor

Marshall McLuhan's vision of a global village is becoming a reality in the Arab World as reception costs fall and more media-hungry individuals than ever in the region are able to access satellite broadcasting. With programming from both West and East, in Arabic and other languages, viewers are presented with easily accessible and readily comparable viewpoints from multiple perspectives, reflecting the values and ideas of cultures from around the world (Sakr, 1999).

The idea of Nilesat was first introduced in the late 1960s, at the start of a period of rapid development and expansion of satellites throughout the world. At the beginning of the 1970s, the Egyptian government decided to create its own satellite and, in 1977, reserved an orbital spot from the International Telecommunication Union (ITU) (Amin, 2003). Egypt's first satellite, Nilesat 101, was launched in April 1998, after a period of analysis and planning for budgets, technology, finance, and human resources. Nilesat 101 was manufactured by the European company Matra Marconi Space using the most update to date digital technology (Hamza, 2003).

At that time, there was a strong push to adopt the same technology as Arabsat, the main satellite in the region since the 1980s, with the reasoning that Arab viewers had adapted to the technology and using the same technology would allow Egypt to capitalize on Arabsat's already established market. Instead, the government decided to invest in the new digital technology that had been used successfully in other countries. The new technology provided a digital compression system that allowed for the presentation of a wide variety of Egyptian, Arabic and international audio and video channels. It also had an additional receiving horn antenna that enables unlinking from Europe for direct transmission to the coverage area. Egypt's Nilesat satellite has two ground stations to control and fix the satellite in its orbital position; the first is in 6th of October City and the second is a backup station in El Hammam, a town north of Cairo near Alexandria, Egypt's second largest city (Bassiuni, 2003).

After the success of Nilesat 101 and because of the increasing market demands, the government launched a second Egyptian satellite, Nilesat 102, in August 2000. Together, the satellites form a digital satellite platform that has created a new transnational broadcasting environment in the region. The Nilesat platform has introduced a variety of popular channels that have attracted millions of Arab viewers (Amin, 2000).

Nilesat is different from other Arab satellites in that it provides a larger variety of digital broadcasting services, including unencrypted channels, encrypted channels, and high speed data transmission services. The unencrypted channels include quality digital television and radio programs which are free to anyone equipped with a satellite dish and receiver. These channels are primarily digital broadcasts of state networks but also include CNN, Al Jazeera, and other widely popular channels. The encrypted channels are available only to subscribers of the Nilesat package. The encrypted channels also include an optional "pay per day" service that allows viewers to watch a recently released movie for an entire day upon ordering and paying for the service. In addition, Nilesat also offers subscribers high speed data transmission services that include transmission of content such as newspapers and magazines, high speed internet access, stock quotations, and other services (Hamza, 2004).

Since its beginning, Nilesat has been unlike other media outlets that the Egyptian government owned, controlled and operated, but was introduced as a publicly traded corporation in which the Egyptian Radio and Television Union (ERTU), the government body responsible for all radio and television broadcasting in the country, has the majority share. With a controlling interest of 40%, ERTU became the largest producer of television content in the region and, with its massive television and film archive, a principal source of programming. The remaining 60% of the company's shares are distributed among a number of private shareholders, including the Egyptian Company for Investment Projects (ECIP) with a 15% stake, the Arab Organization for Industrialization (AOI) with 10% ownership, and the National Bank of Egypt and Banque du Caire, each with a share of 7.5%. Twenty percent of the shares were sold to individuals at a public offering. The Egyptian Satellite Company (Nilesat) is a completely independent company, and the shareholders are not involved in the company's day to day decisions and operations (TBS, 2000).

Over the past five years, Nilesat has proven to be a success. As this study will show, the Egyptian satellite's transmission now reaches almost 7.1 million households in the Middle East, which is nearly double the figure of year of the previous year. In Egypt, 24 percent of 15 million households receive Nilesat signals. In Kuwait, 50 percent of fifty thousand households receive the signals (Amin 2003).

Satellite dishes rapidly proliferated as people looked for more reliable sources of information (Kraidy, 1998) At first, regional media critics claimed that satellite networks such as Nilesat would offend Arab society by providing uncensored Western programming. They now acknowledge that Nilesat is offering diverse programming, with both censored and uncensored programming from both the West and the Arab World appealing to large segments of the region. It has also greatly increased revenue streams for networks such as Al Jazeera, LBC and Future. Nilesat programming has provided the region with increased avenues for expressing views and promoting political freedom and social responsibility (TBS 2000). Nilesat is also bridging the knowledge gap between countries within the Middle East and outside the region (Hamza, 2003).

One of the reasons for Nilesat's popularity in the region is that it provides coverage for the entire Middle East area, including those segments of the population that live in remote areas without terrestrial broadcasting coverage. Its reasonable cost makes it affordable in comparison with some of the other satellite programming packages (TBS 2000).

In order to meet the future requirements of customers, Nilesat has a strong research and development function and continually updates its technological infrastructure (http://www.nilesat.com.eg). Interactivity, multitasking, pay-per-view matching between SMS and TV, and installation of the MPEG2.DVB storage system are all examples of Nilesat's development. Nilesat has also established a Data Transmission Platform that enables content and service providers to rapidly and cost effectively distribute multimedia, data packages and Internet content via Nilesat satellites directly to PCs in business and homes (TBS 2003).

Objectives of the Study

The purpose of this study is to identify the current status of Nilesat in the region -- who are the viewers and why or why not they are viewing the Nilesat services. The study also seeks to identify and understand the obstacles or barriers facing the deeper and broader penetration of Nilesat services in the region. The study is part of the a larger study that was conducted by the Pan-Arab Research Center (PARC) for the Egyptian Company for Satellites (Nilesat), the Egyptian Radio and Television Union(ERTU) and was supervised by the author. The study is entitled, "The Arabic Satellite TV Media: Accomplishments and Challenges."

The study's objectives were as follows:

• To describe the satellite broadcasting viewership in general, with special focus on its rate of growth during the first quarter of this decade.
• To identify the current viewership of digital broadcasting in comparison to ground and analogue broadcasts.
• To identify the causes of growth and recession of digital viewership.
• To develop predictions of the future of digital broadcasting in the region.
• To ascertain levels of audience recognition of the different satellite broadcasting networks in the region.
• To identify the percentage of families receiving digital broadcasting through Nilesat and other satellites.
• To identify the extent of recognition of the different types of analogue broadcasting in comparison to digital broadcasts and the advantages of each.

Methodologies of Research and Distribution of Sample

The study was developed using quantitative research techniques including personal interviews at the interviewees' homes. It used close-ended questionnaires except for a few open-ended questions related to viewers' impressions of satellites in general and digital broadcasting in particular. The study area covered the following Arab countries: Egypt, Saudi Arabia, Kuwait, the United Arab Emirates, and Tunisia. The study covered most of the major urban areas in these countries, represented by the capitals and some of the main cities, in addition to some semi-urban areas. Since the objective of the study was to draw results from all families in the markets subject to the study, a random multi-stratified sample was used, whereas stratification was confined to the area/city in the five countries and citizens of the five countries.

The target sample in each country was restricted to a specific economic and social stratum in the Gulf area and those who receive LE800 and above in Egypt. The pollsters addressed the decision-maker or the main influential party in the family's decision to purchase a receiver.

Results of the Study

The study showed that Nilesat is the most familiar satellite to all Arab viewers. When the sample was asked about their familiarity with the satellite networks in the area, 80% mentioned the Nilesat as the most familiar satellite to them. In Egypt alone, about 90% of the sample mentioned Nilesat. Arabsat came as the second in name recognition.

In all five countries involved in the research study, Nilesat 101/102 had the largest share of viewership, with an overall percentage of 99% compared to 94% for Arabsat A3 and 42% for Eutelsat's Hotbird. (Fig.1) In Egypt, the percentage share was similar, with Nilesat being watched by 99% of respondents and Arabsat second with 83% of respondents. Eutelsat's HotBird was third with 28% of respondents viewing its programming. Eutelsat, Asiasat and Panamsat trailed with viewership percentages in the single digits. This pattern was repeated in the remaining countries in the survey, with the exception that Nilesat and Arabsat were equal in percentage of respondents, in all countries reporting more than 90% of the viewers tuning in to their programming. (Fig. 2a-2e)

Figure 1: Percentage viewership of digital satellite networks (Total Sample)

Figure 2a: Percentage viewership of digital satellite networks (Egypt)

Figure 2b: Percentage viewership of digital satellite networks (Saudi Arabia)

Figure 2c: Percentage viewership of digital satellite networks (Emirates)

Figure 2d: Percentage viewership of digital satellite networks (Kuwait)

Figure 2e: Percentage viewership of digital satellite networks (Tunisia)

The study showed that the primary reasons respondents tune in to the Nilesat package is that it presents a variety of channels. Sixty-five percent of the respondents agreed that having different channels gives viewers a highly valued choice in what they watch. Another key factor in respondents' preference for the Nilesat package was the amount of programming in Arabic, both as an overall factor and in specific the availability of films in Arabic and the Nile thematic channels. Viewers historically had a choice between restrictive and often poor quality state programming in Arabic and foreign-language programming from the West. Nilesat offers them access to programming in Arabic, such as Al Jazeera, CNBC Arabia, Al-Arabiya, and more, that meets international production standards. Other reasons for respondent preference of Nilesat were its roots as an Egyptian satellite and its educational programming. Other reasons given for watching Nilesat programming at homes included the high production values of its offerings and the entertainment value of the programs. (Fig. 3-4)

Figure 3: Factors that encourage viewers to tune-in to Nilesat 101/102 (total sample)

The study also surveyed which networks were the most popular among respondents. most Forty-four percent of the sample agreed that Al Jazeera is the most watched network on Nilesat. Thirty-four percent responded that Dream 1 was the most popular, 32% mentioned MBC2, and 28% mentioned Dream 2 TV. MBC and the Egyptian Space Channel both followed with 22%. Iqraa, an Islamic network that presents religious programs as well as instructional religious drama was selected by 20% of the sample as the most watched channel on Nilesat. (Fig. 4)

Figure 4: The top rated channels from viewer responses (total sample)

One of the goals of this study was to determine what are the main obstacles or barriers for the further market penetration of the Nilesat package. Respondents who do not currently have Nilesat were questioned as to why had not subscribed to the service, 43% responded that the satellite package provides access to many channels that contain programs that do not match their cultural and religious traditions. Thirty-four percent responded that they were satisfied with the local programming and did not need more channels. Approximately 33% of the sample responded that the Nilesat package is too expensive. Five percent said that they believe that Nilesat programming would keep their children from studying, and 4% of the sample said that they don't have time to watch television. Responses were roughly equivalent in the total sample and for respondents in Egypt (Fig. 5-7)

Figure 5: Attitudes of those who do not receive digital broadcasts towards those broadcasts

Figure 6: Reasons for not shifting to satellite broadcasting (total sample)

Figure 7: Reasons for not shifting to satellite broadcasting (Egypt)

Conclusion

Nilesat is becoming the main satellite and program provider for the Middle East. It is gaining popularity in the region as a broadcasting environment offering both free and paid options to Arab viewers after decades of having access to only local, government controlled television. The Nilesat offering is having an effect on a large number of people who are defined are as the satellite households in the Arab countries. Most of the packages offered are carrying local and international services that are appealing to wide variety of audiences. This new environment is affecting the audience in many ways, changing thought and behavior well as educating the audience about other cultures and traditions as well as providing an increasing number of forums for the free expression of ideas and viewpoints. This freedom, however, is viewed as threatening to religious and family values by a significant portion of the population in Arab countries.

New private satellite services are gaining popularity. These privately owned channels are not uncensored and in most cases are up to the production standards of the West. Arabic music video clips are similar to the western songs in style and presentation. Although music television is popular in the Arab world, it receives criticism from a portion of its Arab audiences similar to what MTV receives from conservative American audiences.

The popularity of privately owned or semi-private satellite challenged the government-owned TV channels to try to renovate themselves. The attempt from Arab government to meet the challenge was difficult. However, some Arab governments launched satellite networks to enter the competition (Fakhreddine,
2003). This, of course, was to the benefit of Nilesat.

The results of this survey showed that Arab viewers prefer to have a variety of channels that present news and information as well as entertainment. They also prefer to have such services offered to them in Arabic rather than in English and other languages.

An important reason for popularity of the Nilesat service revealed by the study was the decrease in the price of equipment and installation of the Nilesat dish and decoders in the past three years, which has resulted in greater audience share. This is underscored by the response that the cost of the service continues to be a barrier to many viewers. Nilesat might consider developing innovative subscription options that would make the service affordable to a larger segment of the population, broadening the potential market for its subscription service. If Nilesat continues to gain in popularity and broaden both the size of the market and its market share, Nilesat officials must think about launching the second generation of Nilesat satellite to meet the potential market demand in the near future. TBS

References

Amin, Hussein (supervisor). "A Study on The Arabic Satellite TV Media: Accomplishments and Challenges," Unpublished research conducted by the Pan-Arab Research Center, July 2003.

Amin, Hussein. The Current Situation of Satellite Broadcasting in the Middle East, Transnational Broadcasting Studies (TBS), TBS 5, Fall/Winter 2000 www.tbsjournal.com

Amin, Hussein. The Regional Satellite Giants, Transnational Broadcasting Studies (TBS), TBS 5, Fall-Winter 2000 www.tbsjournal.com

Amin, Hussein. Satellite Broadcasting and Civil Society in the Middle East: The Role of Nilesat, Transnational Broadcasting Studies (TBS), Spring 2000 www.tbsjournal.com

Amin, Hussein. Nilesat Research Shows Increased Penetration, Transnational Broadcasting Studies (TBS), Fall-Winter, 2003 www.tbsjournal.com

Amin. Hussein. The Arabic Satellite TV Media: Accomplishments and challenges. Unpublished research carried by Pan Arab Research Center (PARC) for the Egyptian Company for Satellites (Nilesat), Cairo, 2003.

Bassiuni, Amin. Personal Communication, Egyptian Radio and Television Union (ERTU), Cairo, Egypt 2003.

Fakhreddine, Jihad. Pan-Arab Satellite Television: Now the Survival Part . Arab American Television. www.allied-media.com/ARABTV/pan-arab-sat.htm

Hamza, Salah. Personal Communication, Egyptian Radio and Television Union (ERTU), Cairo, Egypt 2003.

Hamza, Salah. Personal Communication, Egyptian Radio and Television Union (ERTU), Cairo, Egypt 2004.

Kraidy, M. M. (1998). Broadcasting Regulation and Civil Society in Post-War Lebanon, Journal of Broadcasting and Electronic Media, 42 (3), 387-400 .

Sakr, N. (1999). Satellite television and development in the Middle East. Middle East Report , Spring.
Nilesat 101 Channels, Transnational Broadcasting Studies (TBS), Fall 1998 www.tbsjournal.com

Satellite Channels, Electronic Retailing Association, 2003
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