DUBAI: OSN, the Dubai-based pay-TV provider, must develop technology to keep pace with customer demand and “deliver entertainment that matters” if it is to regain growth, according to its new chief executive. Patrick Tillieux, who took over as CEO at the end of November, joins at a time of uncertainty for the network. Last month Kuwait Projects Co. (KIPCO) hired Goldman Sachs to advise on the sale of its majority stake in the company. Increased competition from online streaming sites such as Netflix and Amazon, combined with piracy and a perceived lack of value for money, contributed to OSN’s declining fortunes. According to Bloomberg, KIPCO’s share of profits from the network fell to a loss of $65 million in the first six months of this year, compared with a profit of $36.1 million in 2014. “The Middle East and North Africa region is still under-served by pay-TV,” said Tillieux, who has been on OSN’s board for two years and chairs its executive committee. “Yes, there are more options for customers now, but I believe there is room for all players to coexist and grow. We were, in fact, the first to partner with Netflix in the region, which has been a big step toward industry collaboration and integration. “Changing viewing habits and the explosion of social media short-form content has affected everyone. However, this does not mean (customers) do not want high-quality entertainment for the family. What it does mean is that players such as OSN need to evolve our technology to meet customers’ viewing preferences.” OSN declined to comment on the nature of that evolution, saying only that it faced both increased competition and high operating costs. Organized piracy is also hitting the network hard. The pay-TV provider is responding to these challenges by adapting its offering through “value pricing and relevant packaging.” “Managing an entertainment network such as OSN, offering such a diversity of programming, technology and viewing experience, is a massive operation,” said Tillieux. “Operational costs increase every year, and this is true for every pay-TV operator. As an organization, we are responding to higher operating costs through stronger resource use efficiency and cost optimization, but at the same time we need to adapt and evolve much faster to be able to provide the entertainment that our customers want to watch, via any platform of their choosing and at a price they can afford. “This means we also need to review our content strategy and focus on delivering entertainment that matters to our customers. We recently piloted a new proposition called El Farq in the region, which offers all our entertainment at one price so customers get everything, contract free, providing exceptional value. “So far, the results have been promising and we will continue to tweak our proposition and pricing until we hit the sweet spot between price, package and value for money.” Turning OSN around, however, will be tough. The network’s sluggishness has been a significant contributor to its current predicament, with Karan Kukreja, general manager of media agency OMD UAE, saying that disruption in consumer viewing habits meant “opportunities for those players with deep pockets, the right strategies, and the agility to act accordingly.” None of which, arguably, applies to OSN. Diala Hamad, media director at Vizeum MENA, also believes that insufficient resources have been invested in Arabic content for OSN’s core Saudi Arabian market. The popularity of YouTube in the Kingdom has further complicated matters, while content providers such as Starz Play and Istikana are delivering Arabic content at much cheaper rates. “Netflix and other content providers have definitely played a role in OSN’s current downturn, especially as OSN’s content is still not addressing the local population in Saudi Arabia through relevant Arabic content that speaks their language,” said Hamad. “OSN could have become a strong competitor to the current video-on-demand platforms, but the entry point of a paid-TV subscription became a barrier,” said Kukreja. “The content line-up also would have played a key role.” For Tillieux, however, OSN’s biggest strength is its diversity of content, provided through both linear and digital platforms. Yet, at $30 a month, even its new El Farq package is triple the price of a monthly Netflix subscription. “One of my key priorities is to evolve the OSN value proposition to match customer needs and their wallet,” he said. “The perception of value for money is changing. People are more cautious about their spending and the time they spend on TV or streaming services. One of my priorities is to find the sweet spot between product, experience and price.”