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Abu Dhabi, UAESaturday 20 October 2018

Qatari broadcaster beIN's piracy woes are a scenario of its own making

Its dominance of sports rights in the Middle East has been unhealthy for the media industry and football fans as a whole

A microphone of the beIN Sports television channel during a UEFA Champions League semi-final football match at Stade Louis II Stadium in Monaco on May 3, 2017. AFP
A microphone of the beIN Sports television channel during a UEFA Champions League semi-final football match at Stade Louis II Stadium in Monaco on May 3, 2017. AFP

That we have arrived at a situation where a $1 billion arbitration claim has been made by Qatar’s broadcaster beIN against Saudi Arabia over its exclusion from the kingdom’s market, coupled with its action at the World Trade Organisation against what it says is the “most widespread piracy of sports broadcasting that the world has ever seen,” is not that surprising given how this row has simmered for months following the activities of channel beoutQ.

For seasoned media professionals working in this region, the scenario is even less surprising and perhaps inevitable given how beIN has operated since it began to aggressively accumulate broadcast rights for major international sporting events – from Champions League football to Grand Slam tennis to Major League baseball – over the last five years.

Since it was created as Al Jazeera Sport in 2003, the group has spent billions of dollars in its pursuit of hegemony in the Middle East and North Africa region, with little attention given to the health and future of the sector.

For a number of years now, there has been a concerted and collective effort by broadcasters across the region, including in the UAE and Saudi, to tackle satellite TV piracy and the associated theft of intellectual property, which is costing them up to $750 million a year. Last year, there were 257 raids carried out and thousands of pirate set top boxes seized across the region. Action by the MENA Broadcast Satellite Anti-Piracy Alliance resulted in 22 channels shutdown for illegally broadcasting content. The alliance was formed in 2014 but beIN only became a member earlier this year.

A senior industry source said that beIN in the past was known to not be too concerned about the theft of its own feeds while as many eyeballs as possible were watching its channels. This was partly a fudge amid tension between its small, paying subscriber base and the high rates that it charged advertising clients. It was also because sports are an integral part of Qatar’s projection of soft power.

In 2014, a year after it first secured the rights to show the English Premier League in the region’s 23 territories, BeIN was forced to restrict the number of live TV matches it broadcast after pressure from the league. Its feed was finding its way to UK viewers where Sky is dominant thanks to the billions of dollars it pays the Premier League for broadcast rights. In March of that year BeIN launched a campaign to curb the piracy, promising to protect the rights of subscribers.

The piracy of its feed did not stop completely. Weekend schedules of live Premier League games on TV in this region have never quite returned to the earlier, abundant days before the piracy issue first reared its head in the wake of beIN taking over the broadcast of top flight English football. The source said that piracy never became an urgent matter for beIN despite appearances. This was partly because its cash-heavy position had given it the upper hand in the Middle East. It could do what it liked.

A case in point: in 2013, the biggest regional broadcasters agreed to take a stand and not partake in a bidding war for the English game, in a kind of protest against the Premier League’s quest for each deal to be bigger than the last. Successive broadcasters had learnt that paying hundreds of millions of dollars for football was not commercially viable.

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They wanted more realistic prices in order to make it profitable for them. Initially the protest worked. The three-year rights to show 380 games across all platforms for the 23 countries of the Middle East and North Africa were sold not to a broadcaster but to MP & Silva, a sports rights agency, in January 2013 for $300m. However, by July, beIN had broken ranks and acquired the rights, leaving the other broadcasters behind as it plotted its path to global sports broadcasting domination as its chief Nasser Al Khelaifi put it in a 2012 interview with Reuters.

According to the source, beIN would strategically overspend at first to blow any competition out of the market. As a result, many other broadcasters, particularly state channels, scaled back their operations and investment in sports. This has had the effect of reinforcing beIN’s dominance and this kind of behaviour, while not illegal, would likely have attracted the attention of competition authorities if it took place anywhere else in the world. While beIN operates in this way, sports broadcasting in the Middle East has little chance of becoming a commercial venture anytime soon and will remain a soft power play.

It also means that – outside of the biggest sports media properties – BeIN remains happy to pay the most to win rights but refuses to invest to grow these brands in any meaningful way. It means that sport in general suffers as a result. Other broadcasters, unable to win but a few of the more minor sports properties, treat all of what they are able to show as premium content, in contrast, supporting the competitions beyond just an initial cash payment and helping sport’s popularity to grow in the region.

It is the almost complete domination by beIN that has been so disruptive for the Middle East’s media sector and has not been healthy for sport or business in general, the source said.

Beyond commercial considerations, broadcast rights have also trumped the rights of the fans who are at the heart of why sports, like football, matter so much in the Middle East. Countries like Saudi and Egypt made it to the World Cup in Russia, while Qatar didn’t, yet Saudi and Egyptian fans had no access to their national teams’ games as a result of beIN’s domination - in the case of Egypt this was resolved at the last minute when beIN bowed to pressure and offered to broadcast a number of games free-to-air.

Added to this, the source said, is that beIN has never prioritised the fan experience, often falling down in terms of customer service. It has used its unassailable position to charge for what in many countries is free of charge, such as watching national teams at a major international competition. It has also failed to invest in local sports programming in any meaningful way beyond the minimum expected.

BeoutQ is not the first pirate broadcaster in the region and it won’t be the last given all of the above. That this channel has been so brazen about its illegal activity is perhaps what is really the new development.

What is not in doubt, however, is that beIN could have done more in the past to tackle piracy if it had wanted to, making this situation that it claims to be so damaging to its business, quite avoidable.