The BBC's Arabian plight

Its marriage with Saudi broadcasters has failed. Can Auntie ever do business with regions that have `local difficulties'?

The BBC's TV push into the developing world has been controversial, expensive and messy - as so dramatically demonstrated by last week's axing of the Arabic Television Service. But perhaps it was always going to be. As one senior BBC executive lamented last week: "Looking at the partners involved, the Saudis and the BBC, who would have thought two such different cultures could comfortably co-exist?"

The contract with Orbit, the Rome-based, Saudi-backed broadcaster, was unusual among the BBC's overseas programming deals. Orbit paid for the service, up to pounds 10m a year, and the BBC produced it out of studios in London. Orbit made its money back from the subscription charges it received from viewers. There was meant to be no interference, provided the BBC took account of "local sensitivities".

On paper, the idea was attractive, and broadly consistent with the commercial strategy developed by John Birt, the director general, and his deputy, Bob Phillis, head of BBC Worldwide, the corporation's commercial arm.

The BBC simply cannot afford to launch its own satellites around the world. In Europe and America, it has reached deals with broad- casters eager to transmit some of the English-speaking world's best television - everything from Pride and Prejudice to current affairs series such as Panorama. In the UK, the BBC has joined forces with private-sector partners to broadcast old gems from its programming library to cable and satellite customers. The BBC gets new markets, and a welcome added stream of income to supplement the licence fee.

In the Middle East, where the BBC brand name is much admired, the special arrangement with Orbit would give Arabic speakers access to dubbed BBC programming as well as custom-made news and current affairs.

That was the theory; in practice, the project looked doomed from the start. Indeed, that the contract lasted as long as two years surprised many in the Middle East satellite TV industry.

The relationship came apart on the prickly issues of editorial control and censorship, and came to head over a Panorama programme detailing Saudi human rights violations. Orbit unilaterally cancelled the contract, and the BBC did the same. The two sides are now negotiating testily, with legal action a distinct possibility.

Neither side will talk about the negotiations, but there is no mistaking the rancour with which the divorce was announced.

The tensions were already evident as long ago as January, when BBC coverage of the Government's decision to expel Professor Mohamed al-Masari, the London-based Saudi dissident, was plagued with what Orbit called "technical problems". Although neither the BBC nor Orbit made any detailed statements at the time, the resulting interruptions were said to have been the subject of an internal investigation.

Nor was the Masari interruption the first - coverage of the decline in health of King Fahd was similarly affected.

Robin Cook, shadow foreign affairs spokesman, saw the potential problems clearly. "The [Masari] example shows the potential conflict between commercial funding and the freedom of the BBC ... to broadcast without interference," said Cook in a Parliamentary debate earlier this year.

It is easy to understand what attracted the BBC to Middle East TV. The market is booming, with the established operators such as Star-TV, Middle-Eastern Broadcasting Centre (MBC) and Orbit now being joined by international giants Viacom and MultiChoice. Much of the investment in the region's free-to-air and pay-TV comes from Saudi petro-bucks, spilling from the coffers of the likes of the Mawarid Group, Orbit's financial backers. Mawarid's chairman is Prince Khalid Bin Abd al-Rahman, King Fahd's cousin and brother-in-law. London-based MBC was also established by private Saudi interests, as was Arab Radio and Television (ART).

Satellite dishes are technically illegal in Saudi Arabia. A visitor to Riyadh, Jeddah or Dammam might find this hard to believe, given that the rooftops have sprouted a forest of "devil dishes" - a term used by hardline Islamic fundamentalists to describe these tools of "cultural imperialism".

Opposition has done little to stem the tide, however. Indeed, the number of broadcast satellites built and launched with Arabic money is set to increase. The next generation of Arabsat's satellites is due to take flight in July, with a large portion of the $500m cost being supplied by Saudi investors. The UAE is to spend $1bn to launch two satellites of its own, while Egypt is to launch Nilesat. Even Iran has announced plans to send a "bird" in orbit.

It was once thought that the satellite revolution would erode the salience of borders, and foment democracy in every corner of the globe. The truth is less dramatic. Indeed, satellite broadcasting has encouraged governments to be far more interventionist, particularly in the Middle East, where the authorities are attempting to exert control over the new medium. The Turkish government, for instance, is applying political and economic pressures on various European governments and organisations to prevent a Kurdish satellite channel, MED-TV, telecasting via satellites belonging to the Eutelsat organisation. The London-based channel, legal under UK law, is considered by the Turkish authorities to be a mouthpiece for PKK terrorists. Last December, MED-TV also suffered interruptions during an interview with the PKK's leader, Abdullah Ocalan.

Broadcasters eager to penetrate fast-growing markets are perhaps too quick to give way to governments. The experience of the BBC's English language channel, BBC World, provides a telling example. Murdoch gave in to pressures from the Chinese government to drop BBC World from its package, after its coverage of Tiananmen Square outraged authorities. Murdoch calculated that the huge Chinese market was just too enticing to be passed up on a point of principle.

For more than 12 months, Star retained the channel on its Middle-Eastern package. But that agreement, too, has now come to an end. Last month, Star announced NBC and CNBC as the replacements, and BBC World moved on to two of PanAmSat's satellites, which provide transmission free-to-air.

What can the BBC now do to re-enter the Arabic-language TV market? An advertising-financed service, provided free-to-air, is still a possibility. A more likely solution would be to seek another satellite broadcaster able to pay the necessary funds. Two major newcomers to the Middle East's pay-TV market are about to launch digital bouquets via PAS-4. The media giant Viacom has joined the fray with a package called Showtime, comprising seven international offerings - The Movie Channel, Nickelodeon, MTV, VH- 1, TV-Land and Bloomberg Information TV. This essentially entertainment- oriented bouquet would benefit enormously from the addition of a heavyweight supplier such as the BBC. MultiChoice of South Africa is offering 1stNet, a package revolving around indigenous Arabic programming from the likes of ART.

Local viewers hope a way can be found to restore the BBC's Arabic transmissions to the region. Increasingly, news and current affairs are reckoned to be as important as entertainment channels in the satellite market. Indeed, the popularity of international programming, unedited, should convince satellite TV operators that there is a difference between "taking account of local sensitivities" and imposing censorship at the behest of one's powerful paymasters.

It is unclear just how much the BBC can do about the growing threat of censorship. It is surely right to stand by its hard-earned reputation for objectivity, but what good will this do if its programmes cannot be viewed? It is considerations such as these that are presently exercising strategists at the BBC's London headquarters.

The fallout from the Orbit divorce could be long-lived. For a start, it throws into doubt any future plans the BBC may have been hatching to co-operate with other outside partners in the developing world. In addition, 250 journalists in London are likely to lose their jobs.

A final, rude truth. Less than a month prior to its split with BBC, Orbit added the Disney Channel to its bouquet. The swapping of news for Mickey Mouse cannot be healthy. And which of the two, after all, is the more redolent of cultural imperialism?