London, Asharq Al-Awsat – Besides contributing to the launch of one of the most recognizable modern-day pop culture institutions known as MTV, Peter Einstein, has a surprisingly thorough knowledge of the Arab media and the challenges it is facing.

The Chief Executive Officer of Showtime Arabia, one of the leading subscription-based television networks in the region, proudly speaks of why his network initiated points of sale in a number of countries, “People in Saudi Arabia prefer direct contact; they would rather touch and see the merchandise before buying it. This is the main reasons behind opening these customer service centers, where guests are welcomed to sip a cup of Arabic coffee while watching our programs,” he explains.

During the course of the interview with Asharq Al Awsat, Einstein spoke about his “friends in the Arab media”, namely “Sheikh Saleh” (the Saudi businessman Saleh Kamel) and “my friend Sherif” (the Egyptian director Sherif Sabri). Einstein also made it a point to enquire about the Saudi stock market and the Saudi Research and Marketing Group, the first Arab media company to make its shares available to the public in the Saudi stock market.

Asharq Al Awsat met Einstein in London, where he was attending a conference and discussed his experience and knowledge of the Arab media.

Q: As an American who was formerly responsible for managing MTV, how did you become interested in the Arab world?

A: Throughout my career, I have been part of several “launch teams”. I helped launch MTV in the United States in 1981 and later in Europe . Since Showtime Arabia is partly owned by the same company Viacom, I was given the opportunity to move to the Middle East and launch this project. I had visited the region several times during my time at MTV. I like the region very much and I have enjoyed planning and working on Showtime Arabia’s launch. I even studied Arabic for two years to gain a better understanding of the region.

Q: Has it been difficult to understand the tastes of Arab viewers?

A: When you are managing a paid television operation, there’s only one standard to abide by and that is offering viewers a better product than what they already receive free. If you provide a service viewers can receive free, they will not pay you. We asked ourselves, what can we offer viewers? We then defined our target audience, decided we wanted to target the middle and upper classes, who has lived, studied or worked abroad and has a keen interest in Western entertainment, including films, soap operas and series’. This strategy has guaranteed our superiority in the market. It is hard to top the quality that has cost millions in production. On the other hand, we are adjusting programs to suit the market’s needs, as we don’t want viewers to think that we only broadcast western programs. It is for this reason that all our programs are fully subtitled and our adverts are in Arabic, even if they are for English-speaking programs such as ‘Desperate Housewives’.

Q: Does “adjusting” the programs, include censoring certain scenes?

A: I constantly repeat that we do not broadcast pornography on Showtime Arabia, however, some films are adult rated and we transmit these as they are because this is what our viewers demand.

At the beginning, many of the movies were censored, however, we soon realized that the viewer’s reaction to this was that if there was going to be censorship, they might as well watch the free network channels. The feedback we got was “I know what I am paying for, I am paying for a product of higher quality where there is no censorship, no adverts, and has regional premiers, programs should be presented as the director intended the viewer to see them, as long as I have the option to control what is watched at home”.

Q: How would you describe the viewers of Showtime Arabia?

A: Many believe that our subscribers are expatriates, however, over 80% of our viewers are Arab nationals and we are very happy about this. It is no surprise that expatriates would subscribe to our channels, as we offer programs that are available to them back home; however, these figures prove that we are successful in adjusting the product to suit the needs of the Arab viewer and to gain the Arab viewer’s trust. I have already mentioned, Showtime Arabia viewers mainly belong to the middle and upper classes who want to have the latest mobile phone handsets and trendiest cars and we offer them [this level of quality] in terms of television entertainment.

There is an interesting difference between this region and the western world and that is that in Europe and the United States , film premiers are shown on non-subscription channels, however we broadcast premiers on Showtime, i.e. subscription-based television.

Q: What about the free satellite channels that compete with you in broadcasting these programs?

A: These channels do not compete with us as they broadcast programs that are 18-24 months old and do not broadcast any programs at the same time as us. Also, do not forget that these channels censor programs and have adverts whereas we do not.

Q: Is it not possible that they have signed an exclusive deal with any of the major studios?

A: This is not possible due to the exclusive deals we have.

Q: What about ‘Orbit’?

A: Orbit is a “Pay TV” network and that is different. Orbit might broadcast a Warner Brothers production before we do because of an agreement between them, however, we have agreements with five of the eight biggest studios, namely Sony, Paramount , Universal, Disney and Dream Works. Their productions are first aired on Showtime.

Q: What about the problem of decreasing viewership that some western networks suffer from? How would you evaluate the situation in the Arab world?

A: Television ratings are very high in this region, particularly in countries such as Saudi Arabia where television ratings are higher than in the United States and Europe. We offer a subscription service for movies, which is very popular in Saudi Arabia considering that they would be watching these movies for the first time without censorship and adverts, and would not have this opportunity elsewhere.

Q: Are films broadcasted on Showtime long after they are shown in the cinemas?

A: Sometimes the film is screened on Showtime on the same day as it is shown in cinemas. This was the case with the film ‘Sabaa Waraqat Kutshina’ (Seven Playing Cards) starring Ruby and directed by my friend Sherif Sabri. This film premiered in Egyptian cinemas but was subjected to over 30 minutes of censorship. We showed the entire production exclusively to our subscribers. This is what we are working towards and this will benefit the Saudi market (where there are no cinemas).

Q: How would you evaluate what is being described as the “Arab media boom,” namely in television?

A: An outsider might stop and express amazement since there are around 350 (free) satellite channels and 3 major subscription-based networks. Therefore, anybody would assume that there is a lot of money to be made from all this an. However, there is a huge difference between getting into television and getting into television and making a profit out of it. Many people are not aware of this and many channels are unsuccessful because they lack professional resources, [do not conduct] market research and lack accurate statistics to determine the viewer ratings. Furthermore, there are many advertising companies that offer extreme discounts on adverts which results in the prevention of the growth of the advertising sector, because agencies are acting as of they are selling a consumable product instead of a television spot.

Until this has all changed, there will not be any progress in television in the region.

Q: What is the rate of subscription to Showtime? How much does the channel pay for programs and how much of its income is from advertising?

A: We do gain revenue from advertising but it is a small portion of our overall income. As for the number of subscribers, there are several figures but I cannot recall at the moment. Booz Allen has conducted a study in the summer of 2005, which has been considered the first of its kind in the field of subscription television in the region. The study conducted last year, estimated that there are 175 thousand ‘Direct to home’ subscribers (which means this excludes group subscriptions such as hotels and residential compounds).

Q: But why is there a problem mentioning your figures openly? Didn’t you mention earlier that one of the major problems of the Arab media is in the absence of accurate statistics and figures?

A: It is not a problem for us; however, we are currently running financial operations and cannot publish any figures during this period. All figures will be revealed in the end.

Q: You have recently announced plans to introduce Arabic programs to the channel. Can you tell us more about that?

A: We are always thinking about the next step, as we consider ourselves the leading channel for western entertainment and we want to add new value to our service, which will be a new kind of Arabic television programs. Usually, we would avoid Arabic programs because there are so many already, however, now I sense that there is an opportunity to produce Arabic programs especially for subscription channels, which means that they will be more liberal. I would like to clarify again that what we can broadcast as a subscription channel is not the same as what other channels can transmit because we are invited into households.

For example, the Arabic version of the reality show ‘Big Brother’ which was called ‘Al Ra’is’ was completely unacceptable for free channels and was taken off air, however it would have been suitable for subscription channels. We held several meetings at Showtime to characterize the quality of our programs and what we offer encompasses a wide range of programs including films, soaps, comedies, dramas and talk shows.

Q: Considering the fact that you helped launch MTV, are there any plans to launch MTV Arabia especially that the number of Arabic music channels is increasing at a fast rate?

A: Firstly, we broadcast MTV exclusively on Showtime. Secondly, many people forget that although there are many free channels that target a certain audience, few of them are actually making any profits. I know for a fact that many of these channels depend on the revenue that SMS text messages from audience brings in. However, the main income for any channel depends on advertising and until now, the rate of advertising in this region is still small.

If we wanted to launch MTV Arabia with the same standards as the mother channel, it would be considered a financial risk because there are not enough advertising budgets. Also, let us not forget that we are in an area where people would launch a satellite channel just because they want to or can. There are many music channels; however, I do not believe that any of them are up to the same standard as MTV.

Q: How is Showtime coping with the World Cup?

A: (Laughing) Basically, just enjoying watch it! As you know, ART is exclusively broadcasting the matches and what did make me happy was that Sheikh Saleh Kamal was able to maintain the exclusive of the World Cup matches for subscription television, reinforcing the idea that some things you get free and other things you have to pay for. This is a good thing and it helps us all.

Q: Showtime as well as other television networks suffers from piracy, how do you deal with this problem?

A: Piracy is a problem for subscription-based television worldwide, not only in the Middle East . Since we operate in nearly twenty countries, we deal with each country separately. Most of them have sound laws regarding intellectual property, however, the problems lies in the enforcement of these laws and this is up to the government. Until the governments face this responsibility, people will continue to steal through technology or through wires such as in Lebanon . I believe Lebanon would be an excellent market for subscription television since the Lebanese love new shows, however, despite the good laws for intellectual property, piracy is permitted.

We are working hard to resolve this issue and have taken this matter to court; however, it is up to the government to enforce the law.