Media Sector Update 2017
This Article was first published in Media Law International 2017. In it Joby Beretta of The Bench looks back at the developments in the UAE media sector over the last 12 months.
The UAE media industry has been surfing a wave of recent success and sustained growth driven in part by the local film funds and government initiatives such as rebate schemes. It has however also had its own challenges in terms of piracy, consolidation and evolving to meet the changing consumer trends for viewing content and the challenges posed by the Over-the-Top (OTT) players such Netflix.
The UAE has successfully established itself as an attractive film location for the international film industry, with an impressive list of Hollywood films including Mission Impossible – Ghost Protocol, Fast & Furious 7, both Star Wars and Star Trek and numerous major Bollywood productions such as Dishoom and Bang Bang. In addition to the international blockbusters, there have been a number of high-profile Emirati films such as City of Life (which was the first locally produced film to be released in general cinemas in 2010), Sea Shadow, which premiered in the US in 2012 and more recent releases such as Aerials, Rattle the Cage (Zinzana) and The Worthy.
In addition to film, there has been continued investment into developing Arabic TV content such as Quest Arabia, a new Arabic language free-to-air, pan Arab channel launched by Image Nation Abu Dhabi (Image Nation), using licensed content from Discovery Communications.
The UAE has its own prestigious film festivals such as the Dubai International Film Festival (DIFF), which has been running since 2004 and Abu Dhabi recently hosted the GCC Film Festival in Oct 2016. We understand that a number of previous film festivals including the Gulf Film Festival held in Dubai and the Abu Dhabi Film Festival have been suspended for the time being. With the Emirates so closely located and aligned, the consolidation of these UAE based film festivals clearly makes commercial sense in any event.
Film Funds and Programmes
There are a number of UAE film funds or programmes to assist local filmmakers, which are at an Emirate rather than federal level.
DIFF, for example, established the Dubai Film Market (DFM) in 2007, which is a platform that has supported some 300+ projects including City of Life. In addition, there is the Dubai Film Connection (a co-production market for Arab filmmakers), the IWC Filmmaker Award (US$100k cash prize for directors from the Gulf) and Enjaaz offers production and post-production financial support (up to AED50k).
Abu Dhabi previously had 2 film funds: (i) the Sanad Abu Dhabi Film Fund (part of twofour54) which offered up to US$500k in funding and (ii) Image Nation (part of the Media Zone Authority – Abu Dhabi (MZA)). In April 2016 it was announced that these would effectively combine and all investments would be through Image Nation going forward. Films financed by Image Nation include Tom Hank’s thriller The Circle, The Best Exotic Marigold Hotel and Men in Black 3. In Nov 2016 Image Nation and China’s government-backed Intercontinental Communications Centre launched a US$300m fund to jointly invest in movies and TV content. In addition to these film funds, Abu Dhabi also offers an attractive 30% cash rebate on qualifying spend on location, production and post production in that Emirate. The Abu Dhabi Film Commission also provides support in finding locations, advice on script clearance etc.
Other Emirates have their own funds and programmes such as the Ras Al Khaimah Fine Arts Festival (RAKFAF) film grant for short documentaries.
In addition to the government backed film funds, there are a number of private ventures in the UAE such as the Fortress Film Clinic, a US$25m fund venture between Egyptian production house Film Clinic and Dubai based PE fund Fortress Capital Investments Group. Also UAE based Gulf Films recently signed an equity investment agreement with Europacorp for the US$170m budget sci-fi Valerian and the City of a Thousand Planets. There have also been a number of UAE films funded through crowd-funding companies such as Aflamnah. Unfortunately, that particular film focused crowd-funding company appears to have ceased business in 2015 but there are a number of general crowd-funding companies now in the region. Budding producers may even find individual investors in the UAE, such as billionaire B.R. Shety who is reportedly investing $150m into the production of The Mahabharata in India.
Changing Consumer Trends
Here in the MENA region we spend on average 10.9 hours a day consuming media and around 41% of that is digital (Arab Media Report 2013-2016). Time spent with traditional media such as books, newspapers and magazines are showing a decrease as highlighted by the recent sad demise of 7DAYS, the UAE newspaper, in Dec 2016.
There has been a noticeable shift to OTT streaming services such as Netflix and StarzPlay, which are changing the way consumers in the UAE view their favourite TV and film content. This has created some legal complexities in terms of how these OTT services interact with the exclusive rights granted to (and the revenue streams of) the same content delivered via more traditional media formats such as Direct-to-Home (DTH) TV broadcast, including Video On Demand (VOD). This highlights the increased importance of understanding and negotiating the ‘reserved rights’ in broadcast rights agreements whilst anticipating the next disruptive technologies and platforms.
As everywhere else in the world, piracy is a major concern for content owners and licensees in the UAE and wider Gulf region especially in terms of live streaming of sport events via illegal websites or IPTV.
This year we witnessed a number of successful actions taken across the Middle East region by licensees such as OSN, one of the leading Pay-TV operators in the Middle East and North Africa. OSN has been working with the authorities in the GCC to carry out anti-piracy raids, which have resulted in unauthorised operators being fined, shops closed and illegal equipment confiscated. OSN also secured a significant court conviction against an illegal provider in Dubai for the unlicensed and unauthorised distribution of IPTV services in the UAE.
Sophie Moloney, OSN chief legal officer, commented: “Our industry faces a number of threats from illegal satellite distributors as well as from the emerging scourge of Internet content piracy. The worrying thing is that illegal IPTV providers are openly selling their hardware and services through social media in the Middle East. We need to double our efforts working with the relevant authorities to curb this development, but we also need to get the message out to consumers generally; piracy will kill the very entertainment we love if we don’t all work together to protect content. ”.
One challenge for the authorities and the courts in these cases is that you are not dealing with simple counterfeit physical products e.g. a fake set-top-box but rather the distribution of multi-branded channels, which are not allowed to be distributed in the region because of the exclusive agreements in place with the content owner. The willingness of the content owners to engage in this process is therefore an important factor.
In this region, DTH operators such as OSN have faced issues not only from illegal distributors but also other licensees, which are actually licensed to broadcast the content in other territories but are allegedly commercially exploiting satellite spillover to illegally sell the broadcast services in the Middle East region. This was the reason behind OSN successfully obtaining an order from the High Court in India in Oct 2016 restricting Dish TV (the licensee of the content in India) from operating in the MENA region in breach of OSN’s exclusive broadcasting rights.
Regional groups such as the MENA Broadcast Satellite Anti-Piracy Coalition have also been instrumental in fighting broadcast piracy, with a recent report that all of their suppliers had removed channels proven to be broadcasting content illegally.
Continued support from rights owners, government authorities and the courts in the fight against piracy is essential if regional broadcasters such as OSN and beIN Sports are to continue to invest in major broadcasting rights deals such as the ICC and Premier League respectively.