In January, MBC Group CEO Sam Barnett led the Middle East’s largest broadcasterthrough a very successful IPO, which gave the Saudi-owned linear TV operator and streamer a $222 million financial boost.
This was preceded by the outbreak of the Israel-Hamas conflict in October 2023, that, as expected, has been taking its toll, in terms of both advertising intake and programming.
Below, Barnett speaks to PvNew about how he’s been navigating an undoubtedly exceptional year so far.
What’s the rationale behind the flotation of 10% of MBC that took place on the Saudi stock exchange in January?
The shareholders perceive that MBC is a regional media champion. Having been a private company for some 33 years, it seemed a natural progression for us to become a public company and have the opportunity of raising funds from the market for its expansion.
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Bloomberg called it “the world’s best-performing IPO.” What makes MBC so attractive to investors?
Middle East macroeconomics fundamentals are just very attractive. You have 170 million overwhelmingly young people with a per capita income growing at 4.2%. People are looking for exposure to the Middle East and looking for stocks which they don’t have in their portfolio already. We are the leader in broadcast TV and we have been for a long time. We are the leader in AVOD. We’re the leader in SVOD in terms of content, which drives both the Shahid [streaming side] and the [linear] TV side.
Of the top 100 programs in Saudi in 2022, 86 of them came from MBC, so we have a very strong content position. TV is growing in the Middle East; it’s growing at 6% a year. In some of the markets, it’s growing even faster than that. TV continues to be an important part of the cultural fabric.
On the streaming side, is MBC still beating Netflix in the Middle East?
Let me provide the data from September last year, which is based on market research that we received. That’s the one we quoted in our prospectus. It has us with a 23% market share and Netflix at 18%.
How has the Israel-Hamas war impacted MBC?
It creates a trauma on the region. And as the largest media company in the region, when your audience is going through trauma, that clearly reflects your mood and it reflects your content and disposition. In terms of economics, we projected that it would have a sharp drop-off and the guidance we gave at the time [when the conflict broke out] is we expected that it would cause a drop between $30 million and $50 million in advertising in Q4, which is one of our biggest quarters. And it did.
What happens is it’s not that people negotiate different prices, they just stop advertising, because FMCG [Fast Moving Consumer Goods] products don’t want to be on air advertising “fluffy this, or sweet smelling that” when you’ve got this crisis going on. So that’s happened. They tend to push budgets rather than cancel them. What’s happened is that, when they come back on air, the budgets are still there, but they’ve been elongated and we’re hoping that that starts to happen. In terms of content, you can’t change the scripted shows immediately because there is such a long lead time. But there is a bigger focus on news and calendar affairs and this reflects on the [programming] grid and it reflects the mood of the people. I think those are the key impacts.
Ramadan season, which of course is marathon TV time in the region ,recently ended. What do you consider the standout Ramadan show for MBC this year?
The drama that captured the zeitgeist of Ramadan ’24 would be “Zouga Wahda La Takfee,” which translates – we have to be careful about the translation – as “One Wife Is Not Enough.” But that’s in quotes. It’s an ironic title. In fact, it’s a rather clever drama that challenges all sorts of social norms across the [Persian] Gulf and was controversial in some aspects. It was also highly watched and highly regarded in the [forward] way it depicted marital relations, relationships with children and so on. That’s the one that grabbed headlines and is the equivalent of the water cooler show.
Can you give me an idea of your production volume through MBC Studios in Saudi. Especially high-end English-language content?
There’s a big slate, with hundreds of millions of dollars being spent in Saudi on series and movies in Arabic and also, potentially, in English. Now, some of those are for Shahid and others for linear TV, which are both part of our core commercial proposition.
Can you go into a bit more detail?
Some of the Turkish production companies that we have worked with in Turkey have now set up a Saudi operation and are doing long-running adaptations of dramas which used to be in Turkish. We’ve been doing Saudi versions of those. Those are big budget, they’re long, they’re successful. They’re kind of a sure bet. That’s happened and is ongoing. Then we have shorter series, more like the Shahid originals that we’re doing. Then we have a few high-end series and movies that are going to be in English. Those take longer to cook.
Speaking of which, when can we expect to see the long-gestating $150 million “Desert Warrior” starring Anthony Mackie and Aiysha Hart?
Soon. It involves lots of CGI, music, post-production. All these things are going on, that’s why it’s still in post.
