The Operations Strategy

Developing a lasting Islamic (media) television network

The Operational Strategy INTRODUCTION......................................................................................................................................2 CASE STUDY 1: MTV...........................................................................................................................3 CURRENT MARKETING SITUATION...........................................................................................................4 ISLAMIC TELEVISION PROJECT

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THE SCOPE OF OPERATIONS.....................................................................................................................5

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Developing a lasting Islamic (media) television network Introduction The majority of the media projects have limited life-span1, because by nature they are prone to change. The unrestrained changes in technology are making current methods of operation into legacy systems faster than ever before. The continuous evolution of cultures, therefore people’s taste and preferences. As well as other significant factors of sociopolitical nature. Hence media projects and especially television ventures are limited by the high costs of establishment and more than that the cost of maintaining that project 2. Secondly, access to the media industry is restricted by the knowledge base and expertise, in a nutshell restricted by the ‘know how’ and ‘who you know’. Not least the access to the industry is verily limited to the few privileged in the ‘club’3, thus collective and continuous hostility to new entrants. One thing that may never change in media is the increasing need for information and the demand for it through various mediums. The strategic challenge that will always remain is the fact that “It is easier to set-up a television station BUT takes a mammoth work and effort in comparison to maintain and sustain one” – Mark Lewis, former Director General of the BBC. NDS Group plc, a leading supplier of open end-to-end digital solutions for delivery of services for television operators, reported in their annual accounts of 2002 that on average 75 channels starting up cease operations within the first year of broadcasting. The critical factors identified for the increasing number of start-up channels, such as channel East going off-air within the short period of time, are: 1. Lack of revenue and dependency on a single revenue strand 2. Content a. Increasing repetition acting as audience repellent b. Quality deficiency causing brand dilution from low customer satisfaction 3. strategic planning and control 4. Cost a. The cost of set-up acquiring the majority of capital and causing fault lines in the running financial health of the company. b. The costs of maintenance and sustenance are greater than start-up, which many fail to forecast and consider. 5. Weak Branding, although many new channels have set-up to provide for the niche market, they have failed to establish a strong enough brand to attract the aspired viewer-ship, thus revenue. In many cases, numerous channels catering towards or competing for a small niche.

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Thus decline within a short period of time, for example Channel East and Al-Majd II Both tangible and intangible costs, but mainly intangibles such a talent, branding and collaborations 3 Long-standing projects such as the BBC or CNN which are heavily state interdependent 2

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Developing a lasting Islamic (media) television network Case study 1: MTV Taking the success of MTV networks as a illustrative example of a channel which begun first broadcasting in the USA in 1981, as the first 24 hours music channel, a large part of its success is attributed to the network’s ability to understand, follow and even shape the volatile teens and twenty-something in a way that suit-and-tie wearing executives at traditional networks have found difficult to imitate. It is possible through television medium to set the trend and help shape the cultures of society. However in order to do that, one needs to firstly gain the trust of the audience and then inspire them to follow. This may be only achieved when the broadcaster understands the pulse of the audience and able to translate that into programming. Reasons for success: 1. A television channel needs constant supply of programmes for it to merely survive. MTV was able to nurture a unique relationship with a number of external stakeholders. This relationship involved the record companies providing music videos free of charge in order to promote their products, whilst this benefited both mutually. The record companies developed relative dependency on MTV for promotion. 2. Secondly, to survive as a TV channel, advertisers are essential. MTV managed to successfully attract advertisers, who have become whole-hearted partners of MTV. For instance, PepsiCo has a long-term relationship with MTV, with the intention of co-promoting both brands and reinforcing each other’s positions world-wide. 3. A third success factor for TV channels is distribution – programmes need to reach the viewers’ TV sets, either by satellite or by cable. Transmitting via satellite is relatively simple. Satellite ‘slots’ can be rented from third parties and viewers can receive transmission with a dish. However, in most countries the number of households with a dish is quite low, given the high initial cost, varying from $1000 to $3000. Therefore, most commercial channels prefer distribution via cable systems, which have a high level of penetration in most developed economies. Yet getting cable operators to carry a channel often proves to be an arduous task. Most cable operators have small regional monopolies and need to be convinced of the need to make extra costs to carry an additional channel. Many cable systems are technically limited to a fixed number of channels and therefore need to drop an existing broadcaster before a new channel can be accommodated. This gives cable companies quite a bit of power, leading operators in some countries to demand that commercial channels pay for a slot on the cable. Problems and challenges for MTV: 1. Although MTV has been enjoying a virtual monopoly for 15 years, increasing number of channel start-ups have been steadily rising in popularity, challenging MTV’s virtual ownership of the Music market. 2. The success of local upstarts has lead to many commentators and experts in the industry question MTV’s global relevance and hence survival in the longterm. 3. MTV has not initiated any radical strategic changes, but is actively searching for ways to gradually adapt to the new competitive circumstances. 4. MTV faces strategic paradoxes – a paradox of compliance and choice, markets and resources, competition and cooperation and logic and creativity. Sources: Financial times 20th Feb 2002, Broadcasting & Cable 2nd Sept 2003, The Economist 25th Feb 2003.

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Developing a lasting Islamic (media) television network Current Marketing Situation Strengths and Opportunities: The current market situation for the Islamic media, and especially for a television channel is one that may be described as long-waited venture, which has been tried and failed several times for almost fifteen years. However, the market condition is now ripe with technological advances as well as further deregulation of media legislations making a conception of an Islamic television channel attainable. As there are currently non-existent Islamic television channels, particularly in the English language, there is a huge development potential. From merely providing video programmes on tape as a production company, to a Media network and everything else encompassing within that. This may include portfolio of television channels broadcasting on several platforms such as Satellite, cable and even the Web. Proving a constant supply of rich contents are in-house production companies, dealing with production of programmes from preproduction to postproduction. However, this may only be achieved through a structured development phase and establishing a time-scale development strategy is essential to the success of such growth. This will require precision engineering methods being adapted into the business management, implementation and functionality. For the benefit of latter days, it must be noted that there are channels which do cater for the Muslims, but there is significant difference which is relevant and this must be strongly defined as part of the Corporate and Marketing strategy. Weakness: The critical issue for the survival and growth of the channel would be production of and constant stream of contents. There are no programmes that meet the broadcasting standards, and the majority of the available stock are lectures (as the GOD channel have found to the cost of 12 million pounds that preaching orientated content will drive the viewers away). Secondly, there are only handfuls of production companies who are capable of production Islamic content which will gratify the viewers. Thirdly, the project is faced with limited resources from lack of knowledge and expertise of people in the television Industry. Hence, the challenge to provide a real alternative to the current media becomes greater. Threats: There are already attempts being made by several sectarian groups from the Muslim community to startup an Islamic television station. As these sects already have extremist understanding of Islam and particular practice of the religion, this will indeed undermine the effort (mostly singular) to establish a mainstream medium. Such channel startups by sects and groups will have business backlash with dilution of brand, novelty and mostly importantly the cause. The repercussion from lack of the quality in the overall content and broadcasting experience is incalculable. Significant interests and goodwill of the audience will rapidly be lost. As seen in most cases in other Islamic projects, such as Radio Ramadan, magazines and recently alternative soft drinks to a lesser degree. Significantly any blunders made in the programming or broadcasting by these sideline independents, will have direct implications for the mainstream Islamic channel, as the ITC and later OFTEL may use this as precedence for coming down hard on Islamic channels, under various laws including terrorism act, racial equality act and other laws of the land. This is where professionalism & strategic planning will allow the Islamic channel to remain one step ahead.

Islamic Television Project Registration Number 4138904

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Developing a lasting Islamic (media) television network The scope of Operations Programming – Content & Production The content is king, and high quality, value added programming is the key to survival of a channel. The content is king because it is the true asset for a television channel, and it is the backbone for the existence and growth of the channel. This is because it is the content that defines the channel and differentiates it from the rest. To improve their chances of survival, broadcasters need more viewers in order to receive more subscriptions or attract more advertisers. As the key is a better content and content creation is very costly, it seems obvious that broadcasters have to maximize the revenue they generate from each content they have. They must select the best content and generate revenue from them instead of broadcasting anything that maybe available (such as low quality (VHS standard) lectures and talks) or repeat the same material time and time again. It will not only dilute the customer loyalty but will drive potential viewers away. Broadcasting – Distribution & Logistics Developing an Islamic television channel and eventually a successful network is more that just acquisition of good content, but it is also about establishing a sustainable infrastructure in order to distribute the channel effectively and efficiently. This is not only critical to the channel’s survival but also key to the channel’s growth too. A strategy of sustainability should always be and remain feasible and practical, without which the management, implementation and delivery of it will be difficult and costly. There are key issues to tackle, all of which have short-term and long-term implications for the channel. The difference is between success and failure. These issues include the choice of broadcasting platform – satellite, cable, FreeView or even the broadband media. Secondly, the Conditional access (subscription) or freeto-view access. Thirdly, the delivery medium of digital television, radio the web and even print media needs to be considered. Finally, location, location, location is critical. Location determines accessibility; accessibility is also limited by language too. In broadcasting, location is resolute through satellite usage, The Eurobird for footprint of Europe, Hotbird maybe used to beam into Africa and middle-east, TelStar for North America and AsiaSat for Asia and Australia. However, this involves either a uplink or relay system, ideally a combination of both. COST is the primary factor to the decision making of the broadcasting set-up. Channel ISLAM has developed a broadcasting model which allows maximum transmission whilst ensuring the minimum cost, to almost five folds down. Developing infrastructure for an Islamic television channel, that is feasible, practical and sustainable.4 The programming strategy and Broadcasting Strategy illustrates how to develop ‘A SUCCESSFUL PLATFORM FOR AN ISLAMIC TELEVSION CHANNEL’. Management & Administration The management and administration is the backbone of the channel. It is the core activity and the programming and broadcasting are periphery activities. Where the core fails or collapses, the periphery will cease to exist for long. Management and administration is fundamental. The channel can be brilliant, but without management it cannot generate revenues, organise itself or coordinate its decisive activities. The success of the channel from its start-up to its maturity as a network will depend on the management for vision, drive, strategy and delivery. This starts from Administration to corporate level process, content and contextual activities.

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Please refer to the ‘Broadcasting Scenario Report’ in the Business Plan II for further reading

Islamic Television Project Registration Number 4138904

Copyright2003