Viewers needed to fund astronomical HD costs in Emirates

More high definition channels are launching for TV viewers in the UAE, though companies are finding it a challenge to monetize their offerings.

The satellite operator launched Eutelsat 7 last September. Courtesy of Eutelsat

For the satellite operator Eutelsat, beaming high definition (HD) channels into millions of homes across the Middle East and North Africa (Mena) meant buying a satellite, launching it into orbit and paying huge insurance premiums.

The cost of a single satellite system, such as the one that began transmitting Eutelsat's 40 HD and more than 800 standard definition channels in the Mena region in October, runs to about €250 million (Dh1.21 billion). And the company plans to launch six more satellites between the fourth quarter of this year and the end of 2014.

"That's the name of the game," said Michel de Rosen, the chief executive of Eutelsat. "You need to spend a lot of money."

But companies need more money coming back in to warrant the high costs of investing in HD technology.

"There's a lot of infrastructure there, and where to monetise is a challenge," Rashed Majed Alabbar, the vice president of home product marketing at Etisalat, said in Dubai last week during the Cabsat exhibition for cable and satellite companies.

More people in the UAE are watching YouTube HD videos, although much of the content does not require a premium charge.

"Who's paying for that? It's free," said Mr Alabbar. "It's going through our pipes, and no one is earning money there."

Mr Alabbar said there may be more ways for the industry to generate revenue in the future through so-called over-the-top services, which could charge a premium for on-demand or HD programming.

Eutelsat said its sales had increased to clients such as telecommunications operators because HD required two and a half times the technological capacity of standard definition channels.

Some experts argue that while more HD television sets are being sold, their features are not always being used.

"Customers are buying HD sets but not necessarily watching HD content," said Said Bacho, the vice president for sales and service in the Middle East and South Asia at Harris, a communications company.

"We need to have more demand," said Awad Mousa, the head of content creation marketing at Sony Professional Solutions MEA.