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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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