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Ian Ritchie CEO, MBC (Middle East Broadcasting Centre)

London, July 1998

TBS: MBC has acknowledged that it is preparing to lay off or buy back contracts of more than one hundred redundant employees. What is the reason for this move and will this reduce the effectiveness of MBC news and public affairs programming, which is acknowledged as an MBC strong card?

Ian Ritchie: In the current competitive environment in broadcasting, MBC needs to increase its investment on the screen and ensure that our running and overhead costs are at their most efficient. To maintain the competitive future of the business, we took the necessary action to announce that 120 staff could be made redundant. The continued success of the channel will ultimately be driven by maximizing the value from our direct investment onto the screen. A key part of our brand image is the effectiveness of our news and current affairs programming, and we are continually striving to enhance the quality of this output, not to reduce it. We need, however, to maintain a balance within our general programming to satisfy advertisers and viewers alike.

TBS: When Orbit ended its BBC-produced Arabic news service, MBC was all alone in offering news in Arabic at a technical and professional level that measured up to international standards. That's no longer the case. Now you face competition from al-Jazeera and ANN. Could you evaluate the impact of that competition on your market standing and plans for the future?

Ian Ritchie: Our news operation is still paramount in this field. Competition was always inevitable and this can only provide us with a spur to continue to improve the quality of our coverage. MBC as a channel does provide a general service and is not wholly dependent on news alone. The same innovation that led us to be the leaders in the field will continue to see us through as we respond aggressively to the competition. Our great experience, coupled with our international news operation, will enable us to continue to keep the lead with a distinctive high-quality service.

TBS: A few years ago MBC led the field in advertising revenue and advertising time/day for the Arab region. Now that field is a lot more crowded. How has that affected your standing?

Ian Ritchie: Increased competition for advertising revenue was not surprising. We need to improve and build on our own strengths, but I believe that we need to be more aggressive in our competitive scheduling and in our programming strategy. We want to maintain our high reputation for quality, and our performance in gaining advertising revenue will only be enhanced by a continued high investment in programming and production. Although the field is becoming more crowded, the market does have considerable opportunities for growth and for price re-evaluation, which will mean that those who deliver to the advertiser will gain a bigger share of the advertising revenue.

TBS: Those of us in the television news business were pleased to hear, more than a year ago, that MBC was going to produce a separate 24-hour news channel for broadcast on the Saudi MMDS system that was under construction. Why did MBC change its mind, particularly since you already have the bureaus and the extra services of MBC-owned UPI in place? Which leads us directly to the Saravision project for MMDS, which is now a few years behind its originally projected launch. The trade talk for the past six months has been that the Saravision MMDS project is a no-starter due to a variety of problems. Since MBC and Saravision are sister companies, can you set the record straight?

Ian Ritchie: This is a matter for AP&D [Ara Programming and Distribution] and Saravision. From an MBC perspective the MMDS situation in Saudi Arabia presents a tremendous opportunity. We will be providing transmission and technical support services for the operation, and there are exciting possibilities for us to provide programming services. This situation is still under review, but at MBC we would like to be active in this area, provided that it makes sense for the bouquet of channels and that we can provide the right quality at the right price.

TBS: Orbit, ART and Showtime are digitalized. What is MBC's take on the advantages and disadvantages of digitalization?

Ian Ritchie: We are well advanced in our thinking on going digital. That said, I think that it is often forgotten in the excitement of technology that it is still the content that drives viewers to watch. Our investment concentration will be in that area of programming. While digital technology is inevitable, we should not forget what is on the screen, rather than just its method of delivery. Going digital in that respect, therefore, has to make commercial sense as well as providing an improved service.

TBS: Oil revenues have significantly fallen over the past year. MBC is not in the oil business but all Saudi companies, given the nature of the Saudi economy, are to a greater or lesser degree, somewhere down the line, fueled by the oil industry. Has MBC's operating budget been affected by this situation?

Ian Ritchie: All broadcasters operate in the overall economic climate of their region. MBC gains its revenue from pan-Arab as well as from a Saudi Arabian perspective. Every business, therefore, while concentrating on its cost base, is really driven by its income. All recent surveys have indicated that the advertising market in the Gulf region is vibrant. Arab satellite stations succeeded in increasing their advertising revenue by 100 percent in 1997 to a total of $202 million, capturing 66 percent of total advertising spending in the Middle East. Our view is very much to invest in programming in order to drive revenue up, and I believe that this situation is achievable in the current economic climate.

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