Media Sector in Middle East Undergoing Rapid Growth

(HN, 18 April, 2010) New trendy privately-owned television stations are changing the media landscape in the Middle East, fueled by growing consumer spending and regulatory reform in the region.

In fact the growth is so overwhelming - especially with bandwidth-hungry high definition channels - that satellites are becoming congested to the point where transmission speeds are deteriorating, industry executives from the region said at a panel at the National Association of Broadcasters. Waiting lists have been created for new satellites owned by such countries as Iran, Morocco, Nigeria and Syria.

The region was once-known for conservative, governnment-run channels but now private entities are entering the space at an unprecedented rate - with about 700 channels in the Middle East. However many are poorly-funded, have inferior content and sometimes exits for only a few months. It is no secret that some channels spring up during elections.

"I would say that 80 percent of the population - or 300-million people - watch about 10 channels," said Ashraf Hamdi Fouad of the Abu Dhabi Media Company, citing Al-Jazeera, Alarabia, Lebanon's LBC and the partially publicly-funded Abu Dhabi TV as the most popular. "The rest of them are run by the owners of the channels and his mother, cousin and nephew."

A good example of the phenomenal growth is Kuwait's private channel, Alwatan, which has 485 employees and has seen its viewership surge more than 65 percent in 2009. The station utilized cutting edge graphics, western-style sets and fast-paced presentation reminiscent of western networks. It even updates its Twitter feed every 15 minutes and maintains Facebook fan pages for each show.

"Some of the images you now see you'd never expect to see in the Gulf. Its a very good positive story that interests investors and others involved in the media," said Rami Eljundi, a Jordanian media executive.

Nassir Al-Sabah, a member of the Kuwait ruling family who runs Alwatan and a separate production company, said the station is keen to move into documentary productions that would also appeal to viewers outside the Gulf.

Abu Dhabi television, looking for new revenue streams, recently launched a pay-per-view sports channel (with broadcasting rights to the Premier League) that requires special decoders. The move is seen to counter rampant piracy in the region.

Wanting to take advantage of improved infrastructure and a rapidly-growing, media-hungry middle class, outside broadcasters are also moving into the Gulf with Arabic-language channels. Panel speakers cited as new entrants Turkish, Chinese, British and Iranian broadcasters."They are giving up everywhere else except in the Middle East," said Fouad.

Co-productions with such western media behemoths as National Geographic are also becoming more commonplace. "We want to see the day that something is aired on our own station and then it is marketed in the States," said Al-Sabah.

The growth is not limited to the broadcasting sector. In Abu Dhabi, public funds were used to launch what is described as the "New York Times of the Middle East" in the form of the English-language The National newspaper.

Said Fouad: "Newspaper readership is going down in the world and newsrooms are shrinking but here we have new newspapers starting."

Following on the heels of Singapore and Malaysia, governments in the region are trying to lure foreign media and production companies by creating special zones. Abu Dhabi’s twofour54 zone - named after its geographical coordinates - is one of the best known and acts as an incubator for start-up companies. Through agreements with such entities as the Thomson Reuters Foundation they also have training programmes for young people from the Gulf - even on such topics as acting as spokespeople.

CNN has a new broadcasting hub in Dubai and Turner Broadcasting’s Cartoon Network announced this month a partnership with twofour54 to develop Arabic animation projects in the Gulf emirate - including development and production studios and a training academy.

The panel speakers said they hoped to see a day that Middle East-produce packages could be aired in the West in Arabic, with English-subtitles. They also expressed hope that the Arabic dialects that fragment the region would not be an obstacle to future growth of the sector.

“The problem is how are we going to use this fragmentation to benefit each market,” said Nader Gohar of the Cairo News Company.

Added: Fouad: “One good thing about emergence of all these satellites is that it tears down the walls of all these dialects.”

While the growth in media in the Middle East is robust compared to other regions, some panelists said a digital divide still exists in many countries - with high percentages of people unable to afford broadband Internet services, let alone an HDTV.

Reporting my Michael Bociurkiw in Las Vegas