x Abu Dhabi, UAEThursday 27 July 2017

OSN chief got there from the lowest rung

The new head of the Middle East's largest pay-TV network has followed an unusual path to reach the top of the career ladder.

 
 

David Butorac, the new chief executive of the Orbit Showtime Network (OSN), only thought he would be away from Australia for 12 months.

It was 1987, and Mr Butorac - then working as a cameraman - left his native Perth with his girlfriend for what was supposed to be a short jaunt to the UK.

They were away for 21 years, during which time they got married and had two children before eventually returning to Australia. In that time, Mr Butorac, 48, made his ascent to the top of the career ladder, from the guy who holds the camera to the guy who runs the business.

"I left Australia for 12 months as a cameraman and came back 21 years later as a managing director," says Mr Butorac, who did a 14-year stint at the UK television network BSkyB, which operates as Sky, as well as at TV operations in Malaysia and Hong Kong.

"We left Australia with a backpack each and arrived home with two children and a 41-foot container full of furniture."

The great homecoming was to prove premature. Mr Butorac was appointed as managing director of WIN Corporation, Australia's largest regional free-to-air broadcaster, in early 2008.

But in September last year he left after differences with Bruce Gordon, the billionaire owner of the network. Mr Butorac later made a legal claim for compensation, which he says has now been "successfully settled".

He has since been lured away from his homeland once again. At the beginning of last month, he replaced Marc-Antoine d'Halluin as head of the Middle East's largest pay-TV network OSN, which is based in the UAE.

He will, no doubt, feel at home in Dubai. Mr Butorac already has some experience of the Middle East: in the early 1990s, he spent two months in the Gulf, in rather less tranquil circumstances than those of OSN's courtyard-facing offices in Dubai Media City.

"I was in Kuwait City the day after liberation in the First Gulf War, so my first experience of this region was perhaps slightly more of an extreme one than I'm having now," he says.

"I had a privileged time at Sky News, to be able to be at the forefront of a lot of major news gathering. I spent a fascinating period during the First Gulf War in Saudi and Kuwait."

Mr Butorac acknowledges that as the head of the region's largest pay-TV operator he faces "a slightly more refined battle" than his Gulf tour of the early 1990s.

But it will be a battle and one to be fought on several fronts.

Despite his earlier experience, he is still a relative newcomer to the region. One OSN insider described him as a "fresh face" in a media industry featuring various cultural sensitivities, political wranglings and corporate strife.

Mr Butorac faces a steep learning curve. Last week he was abroad meeting OSN's shareholders, while further travels to the 23 countries in which OSN is marketed doubtlessly await.

OSN was formed last year through a merger between the rival pay-TV networks Showtime Arabia and Orbit. Since then, several rumours have emerged concerning the sale of the business to other Middle East media companies.

Such rumours have subsided. But OSN's shareholders still expect a return on their investment, said to total billions of dollars, in what one insider says has "almost bordered on philanthropy". An initial public offering (IPO) remains on the cards. A few years before the merger of Orbit and Showtime Arabia, the latter came very close to an IPO, which was pulled at the last minute.

One insider in the company says a IPO is "on the horizon", although Mr Butorac says there are "no current plans". All he will say is that both Orbit and Showtime Arabia had "very committed shareholders" as separate entities and that their commitment remains firm after the merger.

"In coming together they recognised that, rather than committing resources to fighting each other, they can now commit those resources to actually growing subscription television across the region," he says.

One of Mr Butorac's colleagues calls him a "straight talker" and "very Australian", while one veteran of the television industry says he has the reputation of a gutsy Aussie who gets things done. Time will tell, of course, whether that is the approach for which OSN's shareholders are looking.

But one battle in which Mr Butorac will need to be tough is against the endemic piracy in the region and converting those who receive OSN's signal illegally into paying customers.

Using cheap satellite receivers and codes from the internet, users are able to watch OSN's channels illegally and for far less than the subscription price. But Mr Butorac says this will soon end through an initiative to swap consumers' set-top boxes to units with better encryption, a move initiated by his predecessor.

This will eradicate the piracy of OSN's signals by the end of the year, says Mr Butorac. And based on his experience in other markets, he predicts that a lift in subscriber numbers will follow.

"I went through a very similar circumstance in Malaysia when I was running the pay-TV company there," he says. "It took about a week or two for the people to take it seriously that they were not going to get their signals back. And then we saw a significant uptake in our subscriber base."

Mr Butorac's primary task is to boost subscriber numbers. OSN does not release its figures but industry insiders say the number lies somewhere between 300,000 and 450,000.

This is minuscule compared with the uptake of pay-TV in other markets. But that is partly due to the dominance of free-to-air television in the Arab world. There are almost 500 free channels available in the region, run by giants such as MBC, government players and private enterprises.

But again, Mr Butorac, as a veteran of the TV industry, has been here before. For he has witnessed, and helped precipitate, the boom in pay-TV in Asia and Europe.

"If you talked to [the British free-to-air broadcaster] ITV at the time when Sky launched - and I was there, I remember it - we were nobodies, we'd never get anywhere," he says. "But by the time the free-to-air markets take notice, pay-TV has usually achieved a position of economic strength."

"The opportunity exists for us to grow rapidly. Look at Asia: five years ago there was a very similar story. As those markets matured, the opportunity rests for subscription television to take off. And the MENA region is on the cusp of doing just that."

But to achieve similar growth in the Middle East market, Mr Butorac faces yet another challenge: to make OSN's satellite channels more compelling to viewers.

Before the merger, Showtime Arabia owned the rights to broadcast the English Premier League (EPL) in the region. The broadcaster focused on this heavily in its marketing material. But the network lost the rights to the EPL to the Abu Dhabi Media Company, which also owns and publishes The National.

Much to the surprise of Mr Butorac's predecessor, the loss of the EPL rights did not have a huge impact on OSN's subscriber base. And Mr Butorac says it did not make commercial sense for OSN to bid for the rights, the price of which he says has "gone through the roof".

To attract more subscribers, OSN is "investing in appropriate and relevant local content", as well as the western entertainment it is better known for.

"There is a vast array of free-to-air channels in this region. So the only way we're going to appeal to the consumer is to ensure that we have high quality and relevant content. And that will be a priority," says Mr Butorac.

"To get to the next million and the million customers after that, which the market certainly has the potential for us to do, we need to ensure that we are appealing to the local market with relevant content."

To do this, OSN will need the right people. Mr Butorac has pledged to invest in staff. His own rise from cameraman to chief executive was partly a result of such an approach: he was sent to Harvard Business School when at Sky.

Mr Butorac acknowledges such a rise through the ranks is not the norm in the TV industry.

"Not that many CEOs have actually experienced both sides of the equation," he says. "Certainly, I was privileged to work for a company that recognised the importance of investment in people and that's something I will always do … I went from being a cameraman to a CEO because of the investment that a company was prepared to make in me and the faith they showed in me. And I aim to show the same faith in our people."

Having worked as a cameraman, Mr Butorac says he can "have meaningful conversations in many facets of the business". He says that also means his tech-savvy employees cannot pull the wool over his eyes.

"If nothing else, it allows me to keep the technologists slightly honest in their protestations to the management … I know just enough to be dangerous," he jokes.

What this also suggests is that Mr Butorac, the perpetual expat, has not forgotten where he has come from.

 

bflanagan@thenational.ae