(Guest post by Keach Hagey, media reporter and co-author of Crane Country)
Argaam is reporting that officials from two of the region's major pay-TV providers, Orbit and Showtime, have agreed to merge. The officials reportedly met in Beirut last Sunday, and have appointed Credit Suisse to advise the deal.
We're
expecting more information about this shortly - insiders at both
companies are talking about an announcement within the hour - but for
now, let's ponder what such a deal would mean.
When Abu Dhabi Media Company snapped up the regional rights to broadcast the English Premier League from Showtime last week,
it was clear that the pay-TV game would be changing. As a free-to-air
broadcaster, ADMC can't stick the games on its feeds, so it has to make
deals with pay-TV broadcasters to keep the rights safely (and
profitably) within walled gardens. Already, they have been talking
about the possibility of putting rights on multiple pay-TV broadcasters
in the same market. A merger would make this deal a no-brainer, and
possibly increase the profitability for all involved.
But of course the roots of such a merger were in the ground long before
last week's deal. Pay-TV has had a hard time in the Middle East, where
free-to-air satellite TV overwhelmingly dominates the market (and is doing so even more lately, according to today's adspend figures).
There have been many whispers of mergers between some combination of
Orbit, Showtime and ART before, but if this one goes through -- as the
increasingly loud whispers suggest it already has -- it will be evidence
that at least two of the players were unable to break through the
free-to-air static and make a real profits from subscriptions. The
question, then, will be how will a newly consolidated entity compete,
when free-to-air seems only to be getting more of the region's ad
dollars, and more of its premium rights.
(Click here for the full (Arabic) story over at Argaam)