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By Jihad N.
Fakhreddine
With a GDP of
$81 billion in 2003, up 4.5 percent from the previous year, and an
8.7 percent population growth rate that brought the population to
more than four million in 2003, the United Arab Emirates (UAE) have
all the economic and business ingredients for the most dynamic Arab
media market, and in some ways, the UAE has manifested itself as
such, with rate card advertising revenues swelling to $420 million
in 2003, a 26 percent increase over 2002. The advertising spree
continued spiraling in 2004, where the advertising industry in the
first four months alone mushroomed to $238 million, a 49 percent
increase over the corresponding four months of 2003. Likewise, the
PARC Consumer Confidence Index (PCCI) soured by 21 points, from 145
in the spring of 2003 to 166 in spring of 2004.
But it is not
the economy alone that increasingly is making the UAE a regional
media magnate. Dubai, spear-headed by Dubai Media City, has gone out
of its way to demonstrate that it is a maverick regional business
and media center. What this article argues, however, is that despite
the surge in the economy, the population, and the media sector, UAE
media, and especially the television sector, have yet to harness
their full potential. Media ownership and structure, as well as the
limited number of media, current low advertising rates, and the UAE
political environment, are some of the factors that tend to
hamstring this potential.
These aspects
apply to UAE media in general. As far as television channels
specifically are concerned, their identity seems to be the most
crucial aspect. To put it differently, it is the adaptation of local
or national TV channels to a pan-Arab (transnational) concept that
has been the most critical test. But before identifying the
pre-requisites for passing this test and evaluating the performance
of the regional UAE TV channels, it may be useful to outline the UAE
media scenario from an economic perspective.
In 2003, just 20
percent of the rate card value of the advertising revenues of $446
million were generated by local TV, over one-half (53 percent) by
daily newspapers, 16 percent by weekly and monthly magazines, 4
percent by radio, and 8 percent by outdoor advertising. Total
advertising revenues do not take into consideration the advertising
generated by the UAE's two major pan-Arab satellite TV channels, Abu
Dhabi TV and Dubai TV, whose rate card ad revenues registered $141
million and $57 million in 2003 respectively. Both TV channels
advise the media research companies that monitor their ad revenues
that these should be counted as part of pan-Arab ad budgets. At the
claimed rate card value, the two TV channels together account for 18
percent of total pan-Arab television advertising revenues, which
stood at $1.1 billion in 2003.
The term
"claimed" is a prefix that must precede each advertising figure
related to Arab media. Lack of market transparency makes it
impossible to provide any reasonably reliable figures. Industry
insiders are comfortable limiting the real values to one-third at
best.
Without a doubt,
a significant portion of the claimed revenues of both TV channels
are from local UAE budgets. This is especially true in the case of
Dubai TV, and less so with respect to Abu Dhabi TV. As such, the UAE
advertising market is under-represented by a considerable
proportion--a proportion which, however, cannot be easily determined
without advertising monitors taking painstaking efforts to sort out
the local budgets from those generated by the pan-Arab market, or by
Saudi Arabia more specifically.
This syndrome of
wanting to be a pan-Arab satellite TV channel is a double-edged
sword. It plagues most Arab TV channels that are on satellite. From
the advertising revenues perspective, the pan-Arab market is the
other side of the Saudi Arabia market. From a purely political and
geographic perspective, however, the pan-Arab market spans the Arab
world and even beyond, well into non-Arab countries where there are
large populations of Arab origin.
There is
justification for this obsession with the Saudi market. It
constitutes about 80 percent of the Arab Gulf population. Similarly,
it is by far the wealthiest; with a GDP of $265 billion in 2003.
Saudi Arabia seems to represent a milch cow before which many of the
Arab media want to perform the pan-Arab dance so that they can
extract buckets of its milk. And indeed, it is difficult to ignore
the potential of a cow that grazes over one-quarter of the world's
known oil reserves.
Abu Dhabi TV and
Dubai TV are among the many satellite TV channels that go out of
their way to reach pan-Arab audiences and pan-Arab advertising
budgets, not seeing how lush and green the national pastures can be.
UAE alone has 10 percent of the world's known oil reserves. Its GDP
is nearly one-third of that of Saudi Arabia, and its population is
16 percent of that of Saudi Arabia.
It is true that
UAE does not have the population mass that makes news headlines, and
a bare one third of its population are Arabs, but it is not quantity
that ought to matter. What ought to count instead is quality, in
terms of disposable per capita GDP. UAE per capita GPD is $24,000,
the second highest-after Qatar-in the Arab World. This may be
compared to an $11,000 per capita GDP in Saudi Arabia.
The UAE TV
industry is missing out on local (national) advertising revenues on
two major counts. Firstly, in the quest of the two major UAE
satellite TV channels to be pan-Arab, they have lost sight, in the
process, of the grazing available in local audience pastures.
Secondly, and perhaps equally importantly from a financial point of
view, UAE advertisers are missing out on visual media communication
with nearly 2.5 million non-Arab expatriates.
The non-Arab
segment of the UAE population has historically been regarded as less
affluent that its Arab counterpart, and especially than the UAE
nationals. Over the past few years it has registered the highest
population growth rate due to an unprecedented influx of a
cross-section of expatriates of different professions. Recent
security instability in Saudi Arabia has resulted in an increased
inflow of professionals with high purchasing power.
The advertising
targeting non-Arabs in the visual media is at best pitiful and
hardly exceeds $10 million, most of it through the Asian TV
channels. Dubai-government-owned Channel 33 is the only local
English channel and has been kept languishing on the margins of the
local media scene. Reports state that its revival is due in 2005
(see Dubai:
Watch This Space in this issue).
The paucity of
the TV advertising expenditures that target Arabs in the UAE--less
than 20 percent of total advertising revenues--does not stand much
taller than the bare 3 percent of the TV budgets that target
non-Arabs. Should the share of TV advertising revenues at the level
of Arab markets in total be 44 percent, there is no rationale why TV
advertising revenues in the UAE market should not be one half what
it is at the regional level.
The nearly zero
TV advertising budgets that target the nearly ten million non-Arabs
who are mostly Asians may best be studied in the context of the
scale of the different media that target this important segment,
which is not within the scope of this paper. From a transnational
broadcasting perspective, however, what is interesting is that this
significant sector is catered to by TV channels that target the
Indian subcontinent. Only a couple of TV channels have segments
produced in the UAE.
Although about
ten million in number, the perceived low purchasing power of the
sector and the fact that they are spread over six GCC markets reduce
their advertising potential at the regional level. Economically
however the non-Arab residents of the UAE constitute the segment
with the highest purchasing power. And although Saudi Arabia has
twice as many non-Arabs of the UAE, their purchasing power is not
comparable. Hence for the non-Arab residents of the GCC, the
pan-Gulf visual media are feasible from a population homogeneity
perspective, while economically the non-Arab residents are not.
A completely
different scenario is observed for the GCC Arab population. But just
as being pan-Arab could mean opening up new advertising
opportunities, it could at the same time mean leaving the local
market unattended. The notion of "pan-Arab or perish" has kept the
UAE satellite TV channels with national defense lines unprotected in
the eventuality that they fail deliver pan-Arab audiences. Indeed
with an access to satellite that exceeds 90 percent and over one
hundred Arab satellite TV channels in addition to an equal number of
non-Arabic satellite TV channels, protecting national audience turfs
becomes a nearly impossible mission.
Abu Dhabi
Satellite TV made an effort to over-haul its program mix, format,
and presentation more than four years ago, but has yet to prove that
such efforts are fully appreciated by the Arab audiences in the UAE.
Its average day audiences are very much on par with its sister
channel Emirates TV, which is earmarked as a channel for a national
audience. Yet despite the fact that Emirates TV generates ratings
comparable to those of Abu Dhabi TV, in the UAE it functions
practically without marketing and barely generated $20 million from
local UAE budgets in 2003.
Abu Dhabi TV is
a typical illustration of a TV channel that has invested heavily in
vying to attract pan-Arab audiences but has not fully realized its
goals either at the pan-Arab level or at the UAE national level. Abu
Dhabi TV has largely succeeded in shedding its image as a national
TV channel (or rather a local TV channel bearing the name of the
Emirate of Abu Dhabi) that showcases the political ambitions of the
Abu Dhabi government. From its re-launch inception in 2001 it had to
compete against formidable odds: primarily Al Jazeera, MBC, LBC, and
Future TV. The latter three are a mix of general TV channels, while
Al Jazeera is a news channel.
Abu Dhabi TV
wanted to be the pan-Arab satellite TV that combines the best of
both worlds: news and political talk shows on the one hand, and
entertainment on the other. This concept worked very well for MBC
for over ten years when the concept of general TV channels was very
much the norm on the pan-Arab satellite TV scene. For instance MBC's
9 o'clock evening (Saudi time) main news bulletin for ten years
consistently maintained 10 percent ratings. That ended with the
advent of Al Arabiya in the spring of 2003; with Al Jazeera, the
latter made it the norm that news be viewed on news TV
channels.
During the
US-lead invasion of Iraq, Abu Dhabi TV invested heavily in making
itself one of the main TV news channels for information about and
insights into the war. By Arab TV industry, and even international,
standards, it did achieve this objective to a large extent. But once
the guns of war went silent so did Abu Dhabi TV. Industry observers
were left without answers as to why Abu Dhabi TV decided not
capitalize on its success in covering the war on Iraq. But again,
had it done so this would have increased even further the confusion
about its product concept, in terms of general programming versus
news.
Abu Dhabi TV
could be a case-book study of a TV channel that is less likely to
succeed as two-in-one-that is, unless certain conditions are met.
Experiences of the main US news networks demonstrate to us that one
premium-quality main news program could be an anchor program in a
premium-quality general entertainment TV channel. With an
unconfirmed budget of over $100 million, the recent re-launch of
Dubai TV in a more upbeat format means that it must have learnt many
lessons from the successes and failures of Abu Dhabi TV since its
re-launch in 2001.
Five months into
its re-launch, national TV audience studies carried out by PARC in
the UAE during the summer and early fall of 2004 indicate that Dubai
TV had consolidated its audience base during several parts of the
day. Relative improvement in performance has been reported in Saudi
Arabia as well, although this is not comparable to that achieved in
its home market of the UAE.
Dubai TV sought
to establish a formidable presence during Ramadan through a half
dozen Egyptian, Syrian, and Gulf serials run exclusively on its
screen. Ramadan is just one month out of twelve where most of the
programming on Arab TV channels goes dry, and many end up recycling
what was shown during the saturated Ramadan program grid.
At any rate, it
may be too early to evaluate the performance of the new Dubai TV. We
need to keep in mind that the re-launch of Dubai TV is long overdue.
It is reported that internal politics has kept it from establishing
itself as one of the more prominent pan-Arab satellite channels on a
par with the many that played a significant role in creating the
pan-Arab satellite TV market.
The re-launch of
Dubai TV is part of the rejuvenation of Dubai government owned
media, which include the daily newspaper al-Bayan, the weekly
family magazine al-Usra al-'Asriya (The Modern Family)
and a number of local AM and FM radio stations. All three media
titles are now under the direct authority of the Dubai Media
Incorporated set up by Dubai Crown Prince Sheikh Mohammed. It is
headed by a UAE national Hussein Lootah. Falling under this umbrella
are three other TV channels-Channel 33 (English language), Dubai
Sports, and the older version of the Dubai Satellite TV Channel. At
the time of re-launching Dubai TV, Dubai Business Channel, which was
launched over two years ago, was shut off.
Both Abu Dhabi and
Dubai government owned media account for a total of one third of the
advertising revenues generated by the UAE media (at rate card value,
of course). The Abu Dhabi government owned media operate under the
umbrella of Emirates Media Incorporated. In addition to Abu Dhabi TV
and Emirates TV, it owns Abu Dhabi Sports TV Channel (part of the
Showtime pay-TV network), a national newspaper Al-Ittihad,
family weekly magazine Zahrat al-Khaleej, Majed (a
monthly children's magazine), and a number of radio stations.
The earlier
re-launch of Abu Dhabi TV in 2001 and now the re-launch of Dubai TV,
are efforts by the respective governments of Abu Dhabi and Dubai to
rejuvenate the media that are under their control. Nevertheless,
their efforts are not coordinated under one national government
body. The Sharjah Emirate also owns a satellite TV channel as well
as a local FM radio. Both are heavily loaded with religious and
educational content. The first UAE privately-owned TV was Ajman TV
(Channel 4), which started as a terrestrial channel in the second
half of the 1990s. No sooner, however, had the federal government
provided it with a satellite C-band frequency on Arabsat than it
pulled the plug and sent it into a financial free-fall. Now it
subsists on an annual federal assistance of about $1
million.
While one foot
of the UAE media is galloping freely in the private
sector--especially the print media--the second foot--especially
TV--is still firmly rooted in the state-funded sector. UAE
state-funded media have much of the look of privately owned media
but this dual media economy is creating media creatures that are not
necessarily totally fit for survival off the umbilical cord of the
two main city-state governments of Abu Dhabi and Dubai. These two
operations have grown into media adults which the state has found
itself unable to wean.
In effect, the
continued excessive reliance on state funding seems to set no clear
estimates for when they can expect to claim semi-independence--let
alone total independence--from the state. On the contrary, for them
to be more competitive locally and regionally the state will have to
pump more funds into them. This seems to be particularly the case
with Dubai TV. In this regard, UAE state-owned media does not differ
from any other Arab state-owned media, with possibly one difference:
the Dubai government has been especially successful in running
state-owned enterprises with a private- enterprise mentality.
Just as Abu
Dhabi TV attained considerable success in shedding its local image,
the new Dubai TV, however late, ought to capitalize on the brand
image of Dubai as the most dynamic and vibrant city-state in the
Arab region. The motto of Dubai Crown Prince Sheikh Mohammed bin
Rashid has been "The business of government is manufacturing
opportunities." While the new Dubai TV has many of the
ingredients of a successful pan-Arab and national TV channel,
similar potential needs to be demonstrated in its marketing, an
activity that has been delegated to Choueiri Group (Tehama-Mems).
Choueiri Group is by far the major media marketing representative;
in addition to representing LBC and Al Jazeera, it also represents
MBC, MBC2, Al- Arabiya, ESC (Egypt Space Channel) and Spacetoon, a
children's TV channel.
It is evident,
however, that opportunities for the UAE visual media are still far
from being realized locally or regionally. One could argue that the
sophistication demonstrated by the media in realizing their full
potential lags behind that depicted by the advertising agencies as
well as the marketers. In terms of both dynamics and the tools, the
advertisers and advertising agencies who are supposed to be
"partnering" with the media differ greatly from their partners. For
instance, while the advertising agencies continue to upgrade their
media planning tools and know-how through international affiliations
and research, the UAE Arabic media, both audio-visual and print,
have been moving at a snail's pace in adapting themselves to the new
trends.
On the other
hand, because of its population composition, the UAE is blessed by
being a microcosm of a pan-Arab market as far as catering to diverse
TV viewing needs is concerned. Success at the national UAE level
could have regional implications. TV advertising inactivity at the
national level has resulted in marked ambivalence, with the bulk of
the advertising budgets channeled to the print media. National TV
channels that carry local adverting have been stigmatized as "local"
TV channels, depriving them of regional budgets or, more bluntly, of
budgets that target the Saudi market.
The success of
the UAE pan-Arab satellite TV channels means that they are required
to walk on a very narrow rope that needs to be tightly stretched
between national-regional audiences and advertising budgets. So far
this rope is as slack as it can get. TV channels have yet to take
the lead in showing an effective performance that could lure both
regional and national audiences and advertising budgets. So far, the
advertising agencies have been in the driver's seat. This is an only
natural outcome of two business activities run with very different
mentalities--the private, which can only survive if proves its worth
(the advertising agencies), and the UAE national TV channels, which
do not have to prove their worth as long those in charge of their
governments' coffers set no limit to their support.
Jihad
Fakhreddine is the research manager for media and public opinion
polls at Pan Arab Research Center (PARC). He is based in UAE and
writes on Arab media and US public diplomacy.
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