Satellite PayTV is still a niche market with no more than 1.5 percent of Arab households subscribing, said the Arab Advisors Group (AAG), a telecom and media consultancy based in Jordan.

Although 50 percent of the Arab satellite stations are loss making, according to Jawad Abbassi, president of AAG, the four Pay TV operators in the region compete for an estimated 160 million dollars in subscription revenues.

"Free to air satellite television has been a boom for the satellite audience because they have a major choice and it has become cheaper, but the profitability of satellite stations is in doubt, especially news-based ones," Abbassi told AFP in a telephone interview.

The bulk of the market is shared by Showtime and Orbit, with the remainder split between ART and ADD, according to Abbassi.

The major audience comes from North Africa, followed by the Gulf, and the Levant, with the majority of advertising focused on the Gulf market.

Gross advertising revenue in the region does not exceed 250 million dollars, according to Abbassi, and as a result companies are trying to diversify into telecom-based revenues.

"To expand revenues, companies are turning to competitions and mobile short messaging services (sms)," said Abbassi.

The Lebanese based Future TV which ran "Superstar", a talent show version of the Western "Pop Idol", generated four million dollars in revenue from viewers who voted by sms.

SPACE.WIRE