Convergence might just be the answer to the media industry's prayers, argues Amr Hashem*
The world over the past decade has witnessed a technological leap in storage, dissemination and the review of multimedia content, all of which are areas that mainly use digital technology. The quality of images and sound delivered through digital technologies is much higher than that delivered by others. These new opportunities for a richer and a real customer-oriented experience have attracted service providers because of their lucrative potential to bring in more profits to companies.
This coincides with the worldwide boom in Internet usage which has encouraged many entities to start developing content, applications and services that could be made available to the Internet global community. Users' connecting to the Internet has also developed from low-speed dial-up access to high-speed always-on connectivity.
Egypt has been leading the media sector in the Middle East and Northern Africa. It was one of the first countries in the world to incubate the new technology of cinematography in the beginning of the 20th century. The Egyptian private sector in the mid 1930s established studios and laboratories, set up theatres and developed the necessary infrastructure in collaboration with foreign experts. It was able to establish its leadership and developed the cinema industry to become the country's second export, ranking second after the world- famous Egyptian cotton in the mid 20th century.
This could only be made possible by availing sufficient and adequate investments to the media sector, coupled with investors' capability to manage distribution channels and collect their proceeds. Today such mechanisms face major challenges. Investors counter difficulties in tracing their content because of the existence of various distribution channels. These are comprised of cinema theatres, satellite channels and personal viewing. Piracy has added a new threat to the industry. It is now becoming easier to duplicate and distribute content between user groups and online. We recently saw cases where pirates were able to distribute movies and songs, before even their lawful owners did. This has damaged the entire investment cycle. The Egyptian media industry at large, and cinema in particular, have been a prime victim of this situation. It is compounded by the absence of adequate intellectual property protection frameworks in many of the media industry's prime markets, and slow and feeble enforcement in other cases. This has adversely increased the uncertainty of proceeds accrued from media production, which in turn has affected the viability of investments and created disincentives for any further development.
Convergence is currently providing a new opportunity for the Egyptian media sector, however, by exercising better control over its distribution channels. The developments in the software industry have provided protection to intellectual property, coupled with assurances that the material will only be reproduced or activated according to a predefined set of rules and conditions. Such a system which is generally referred to as Digital Rights Management (DRM) necessitates a certain level of interaction between the media player, and the central location by which those rules -- or rights -- will be administered. The availability of always-on high-speed connectivity and the fact that content delivery has adopted a digital format have triggered a new market environment that is based on 'convergence' between the ICT and media industries. Such a marketplace has attracted sizeable attention from technology developers and service providers. Technology providers have also developed a number of technologies for receiving and playing media-rich content, along with the capability to originate and receive voice and data calls. Mobile phones with video cameras are also becoming regular commodities, and mobile phones with TV receivers are now affordable to larger segments of users. Content providers have started developing programming solely for the sake of delivery over Internet media. The latter include Internet-based radio stations or pop hits developed so that they can be received and played by i-pods or similar products to millions of Internet users. Mobile networks are also becoming an initial platform for distributing new songs, and are a primary source of income to media production companies. We have also seen Internet gaming develop to formulate virtual communities of worldwide gamers, who meet, play and exchange files in the cyber world.
If Egypt is to capitalise on such a phenomenon then stakeholders must initiate a dialogue on the various considerations involved, and how their contributions can be maximised. Players from the public sector and the media and financial sectors, in addition to consumers and the ICT sector, must all devise a plan on how to promote a converged service that is interesting, affordable and useful to consumers. Media labels, artists, hardware producers, credit card providers, software producers, Internet service providers and content portals must also design new methods. These would be geared towards collaborating in the delivering of content as well as in collecting proceeds. These parties must debate together, and reach a consensus with both policy makers and industry regulators on how to effect a shift from the industry's current vertical regulatory structure to horizontal regulations. With this, innovation and technological neutrality will have been promoted. There are many critical issues to be discussed and laid on the table. These are related to the carriage and distribution of converged communications services, regulations on content distribution, and the allocation and management of scarce resources such as spectrum. They also include the question of universality of the service provided, and how to define and deliver it to all citizens.
Egypt is inaugurating one such strategic dialogue at the Sharm El-Sheikh WEF meeting on the Middle East, on May 19 in a conference organised by the Ministry of Communications and Information Technology. This will be entitled 'Convergence of ICT and Broadcasting Industry: Regional Perspectives and Opportunities.' The conference will discuss the prospects of convergence based on technological development and international experiences in this domain, and explore the possibilities that such a step can generate for the Middle East and North Africa (MENA) region. The event is also important because of the fact that Egypt is on the verge of setting up its own new regulatory framework for the broadcasting sector. The Sharm El-Sheikh conference will be attended by national and regional operators with a current or potential interest in this kind of business opportunity. Egypt will have been among the first Arab countries to tackle this matter, thus setting the trend for other countries in the MENA region. The event will also signal the launch of a consultative process in Egypt about convergence between the broadcasting and ICT sectors. It will also look into how convergence can be a means of promoting the country's ICT industry, both locally and regionally.
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* The writer is advisor to the minister of communications and information technology for communications policies.