Diversity and choice: Numerous opportunities are available as the media landscape evolves

With a diverse population and an open and rapidly growing economy, Abu Dhabi is home to a dynamic and expanding media market that includes a broad range of players catering to a variety of interests and tastes. Growth is being driven by the emirate’s efforts to become a leading producer and exporter of creative content and media services, as the sector’s development has been identified as a key part of fulfilling broader ambitions of diversification under the Abu Dhabi Economic Vision 2030.

Regulations

 Oversight of content falls under the remit of the National Media Council (NMC), the sector regulator established in 2006. The NMC provides written and visual content in both English and Arabic to international news aggregators such as Reuters and Bloomberg, and the council also has supply agreements and exchanges with a number of national and regional news agencies. According to the NMC, while it is difficult to officially audit, the UAE is estimated to receive around 7000 mentions per day on average in international news outlets.

Landscape

 In terms of availability and diversity, the emirate’s media landscape has expanded considerably over the past two decades, in line with the opening of the economy, evolving from a sector with three state-run television channels and a handful of Arabic-language newspapers into one where digital, print and broadcast content cater to almost every imaginable segment of the diverse market.

Arguably the largest and most influential local media group is Abu Dhabi Media (ADM), a government-owned holding company that operates a number of leading local newspapers (including the Arabic-language Al Ittihad and the English-language The National), magazines, and television and radio stations. ADM has secured regional partnerships with international media brands including Sony Entertainment and Universal Music Group for the VEVO online music platform and National Geographic for the National Geographic Abu Dhabi Arabic-language channel and National portfolio are an outdoor broadcast company (LIVE), a local film company (Image Nation Abu Dhabi), a printing facility (United Printing Press) as well as a distribution company (Tawzea).

Abu Dhabi Media Investment Corporation, meanwhile, is a private investment firm owned by Sheikh Mansour bin Zayed Al Nahyan that also has partnerships with international media brands. The company established a joint venture in 2010 with UK broadcaster British Sky Broadcasting (BSkyB) to launch Sky News Arabia, a 24-hour Arabic news and current affairs channel. The network has 400 editorial staff based in 12 bureaux, with the main broadcasting studios located in Abu Dhabi’s twofour54 media zone.

The channel, which began broadcasting in May 2012, is accessible to around 50m homes across the region, according to figures from BSkyB, and viewers from around the world are able to stream its programmes online or via a smartphone or tablet.

State Support

 ADM upholds a public service mandate and is reliant on state funding. The government plays an important role in supporting a thriving media industry that provides residents with a wide variety of products, as this helps to position Abu Dhabi as a more attractive and cosmopolitan place to live and work.

As part of its public service mandate, ADM is undertaking an archiving project to digitise all print material and film footage produced and accumulated since the 1960s. According to the organisation, it has so far restored and converted more than 3m published records, 16,000 hours of radio broadcasts and 5000 hours of television, with indications being that the files will be made available to outside parties.

Broadcast

 Local media groups’ stakes in international broadcast networks position the emirate as a regional base for broadcasting a range of free-to-air and pay TV channels. According to the Dubai Press Club’s (DPC) “Arab Media Outlook 2011-15” report, approximately 50% of the UAE’s population watches Emiratis watch more, with 50% consuming between three and six hours of TV per day. Of the 72 free-to-air-channels available to UAE residents in 2011, some of the most popular included ADM’s general entertainment option Abu Dhabi Al Oula, Abu Dhabi Sports TV and National Geographic Abu Dhabi, an Arabic-language channel launched in mid-2009. Six of ADM’s channels are also broadcast in high definition (HD) through the satellite services of YahLive, a UAE-based satellite broadcast firm which signed a partnership agreement with ADM in February 2012.

Pay-TV penetration in 2011 was estimated by the DPC to be at 45% and internet protocol television (IPTV) at 33%. ADM’s Abu Dhabi TV network offers customers a range of 20 HD channels, and competes primarily with the Orbit Showtime Network (headquartered in Dubai) for the UAE’s pay-TV subscribers.

Given the UAE’s demographics, TV viewership is highly fragmented compared to many developed markets, where a handful of channels tend to dominate audience figures. According to a 2012 annual report published by tview, around 60 channels make up half of the total viewership, in comparison to around 10 in the UK or US, as channel and programme preferences vary significantly between Emirati nationals, Arab expatriates and South Asians, for instance.

Launched in 2012, tview claims to be the first reliable TV audience measurement system in the UAE, and the company makes its television ratings available to the public. This is expected to provide a boost to television advertising, which until now has been underrepresented, allowing prospective advertisers to be more targeted in their campaigns and more precise in evaluating the medium’s reach and impact.

Print

 Similar to television, while there is a proliferation of media titles that cater to a diverse range of interests, the competitive landscape for print continues to remain quite concentrated. This is especially the case when it comes to newspapers, where ownership of the top dailies tends to be linked either to a government-affiliated firm or a large business group.

Newly launched independent titles have not had much success. This is partly because the market has settled and become segmented, with each of the more widely read papers appealing to a targeted and loyal readership, and partly because advertising remains the main income generator.

Deeper pockets also allow state and corporate-backed entities to keep their papers running during tougher times when advertising spend slows, a situation which occurred, for example, during the 2008 real estate downturn, when property developers – which at the time made up a large portion of overall ad revenues – reined in their budgets sharply.

The market for newspapers in the UAE now includes a total of 14 dailies – eight in Arabic and six in English. The UAE has some of the highest circulation figures in the region and an estimated 56% of readers read a newspaper every day – compared to 45% in Saudi Arabia and 42% in Egypt. Total claimed circulation for daily newspapers was over 1m in 2011.

According to a 2012 report by the DPC and Deloitte, the five most popular papers among respondents in the country were Gulf News (48%), which is an English-language daily that has a largely non-Arab expatriate readership; Al Khaleej (39.3%), an Arabic-language daily; the Arabic-language Emarat Al Youm (31.6%); the English-language Khaleej Times (27.7%); and Al Ittihad (26.6%), another Arabic-language daily.

In a reflection of the UAE’s unique and diverse demographics, the top 10 newspapers also included two Indian dailies, Times of India (9.2%) and Malayalam day, which is lower than in Egypt, where 32% of readers do, and the regional average of 22%. However, the market is almost evenly split between readers with subscriptions (49%) and those without (51%), which is high by regional standards.

Advertising

 The Pan Arab Research Centre (PARC) ranks the UAE as the MENA region’s top advertising market, estimating spend for the first nine month of 2013 at Dh4.37bn ($1.2bn). This represents a 4% gain from the same period a year prior, and suggests the UAE will likely retain its leadership position within the region as some of the largest advertising markets in MENA, especially those affected by civil unrest such as Egypt, are currently recording declines in revenue.

Also boding well for the industry’s future prospects is a shift in advertising spend towards more consumer-driven sectors and a lessening in reliance on government-linked entities. Retail and entertainment ranked as the top advertising sectors in the first nine months of 2013, while PARC reported that government-run campaigns constituted one-fifth of overall outlays in the first half of 2012, down from the one-quarter contribution the public sector made two years earlier. The recovery in the real estate sector, which is making a comeback following four years of decline, is providing a further boost to advertising revenue as well.

Print is by far the most popular medium for UAE advertisers to get their message across, with newspapers accounting for 55%; magazines 15%; and television, 10% of advertising outlays in 2012, according to figures from PARC. Advertising spending increased 9% in 2012 over 2011, rising from $1.45bn to $1.58bn. While spending on ads grew by 4% in 2012 over 2011 in both the newspaper and magazine segments, television saw a decrease of 6% in 2012.

Advertising outlays in English-language papers totalled $499m in 2012, topping the $388m spent on Arabic-language papers. Government and organisational advertising remained at the top of the market in terms of spending with $371m, or 23% of all spend. However, the segment saw a slight 1% decrease from $374m in 2011. More promising growth was seen in vehicle and auto supplies, which saw a jump in spending of 37% from $81m 2011 to $111m in 2012; publishing media, where outlays increased 36% from $69m to $94m; and clothing and jewellery, which spent $84m, a 35% hike over $64m. Retail and tourism retained their positions as second and third, respectively, in terms of spending. Retail ad expenditures grew by 15% from $186m in 2011 to $213m in 2012, while tourism and hospitality spent 19% more on advertisements, or $136m compared to $114m.

In terms of brand names, Etisalat remained the biggest spender overall with $23.3m, though supermarket chain Carrefour outspent the telecoms giant in both the newspaper and magazines segments with $10.7m and $2.3m, respectively. Radio ad expenditure was dominated by Emirates Airlines at $663,000, and advertisements for the Dubai Shopping Festival led the outdoor segment with $15.9m.

Going Electronic

 Internet penetration in the UAE is on par with many developed markets in the West, and digital advertising is taking a growing proportion of the advertising pie. The Middle East as a whole is behind when it comes to advertising campaigns migrating to digital platforms, however, with digital advertising accounting for only 6% of all advertising spend compared to 36% in the UK, for example, according to figures from Deloitte. The region, and in particular the UAE, which has strongly embraced social media, is likely to catch up over time as astute marketers begin to better understand and employ digital marketing.

Efforts to monetise digital subscriptions have not yet gained significant traction, and it appears unlikely that online news will lead to an erosion of print sales for the foreseeable future. Mobile, nonetheless, is emerging as a highly promising channel to deliver content, as the UAE has a young population that has both the spending power and technical savvy for early adoption. In addition, infrastructure and state support for IT are both well developed in the UAE. For example, the World Economic Forum’s 2012-13 Network Readiness Index ranked the UAE second among Arab states and 25th overall (out of 144 countries in total) in terms of the country’s capacity to fully leverage information and communications technology (ICT) for competitiveness and development.

According to the International Telecommunications Union, as of 2012, 85% of individuals in the UAE were using the internet (see ICT chapter). This places the UAE towards the top of the GCC region, behind Qatar with 88.10% and Bahrain with 88%, but ahead of Kuwait (79.18%), Oman (60%) and Saudi Arabia (54%). In its “ICT in the UAE – Household Survey 2012” the Telecommunications Regulatory Authority (TRA), the UAE’s sector regulator, put the percentage of households with an internet connection at 72% overall, with this number rising to 84% among UAE nationals. Of those aged 15-74, 85% of UAE residents reported using the internet in the last three months. Meanwhile, DPC figures suggest that 73% of the population owns a smartphone or tablet, and that of this demographic, more than 75% have downloaded applications.

Social Media & Networking

 Use of social media and social networking sites in the UAE is among the highest in the Arab world, according to the “2013 Arab Social Media Report” produced by the Dubai School of Government’s Governance and Innovation Programme. In terms of Facebook penetration, the UAE leads the GCC and MENA regions, with 41.66% as of May 2013, followed by Qatar with 34.38%, Kuwait (26.75%), Bahrain (25.09%), Saudi Arabia (18.26%) and Oman (16.22%). The UAE comes in second in the GCC for active Twitter users, with 401,000 as of March 2013, topped by Saudi Arabia with 1.9m (and a much larger overall population), but ahead of Kuwait (225,000), Qatar (74,400), Bahrain (64,300) and Oman (38,800). Visiting social networking sites was the second-most-common online activity cited in the TRA’s “ICT in the UAE – Household Survey 2012”, with 83% of respondents reporting using them in the past three months, just behind those who said they had sent or received email (88%). In addition, among those who use social networking sites, usage is quite high, with 52% accessing them daily and 26% every other day, according to the TRA survey.

Arabic Content

 The “2013 Arab Social Media Report” reveals that Arabic is the fastest-growing language on social media. Yet despite being the world’s seventh-most-spoken language, Arabic only makes up around 3% of all online content, of which a large proportion comprises user-generated tweets and Facebook status updates. At present, according to the TRA’s ICT survey, the majority of websites accessed within the UAE are in English, with respondents reporting that they spent 58% of their time online on English-language sites, 37% on Arabic-language sites and 6% on other language sites.

Recognising that there is robust and growing demand for online content both domestically and across the region, Abu Dhabi is looking to seize on this opportunity. This effort is spearheaded by twofour54, the commercial arm of the government-owned and operated Media Zone Authority launched in 2008, which has a mandate to build a sustainable Arabic media and entertainment content creation industry. “The region offers compelling demographics. There is a market of 360m people scattered over 22 countries, 55% of whom are under 25 and all are speaking one language. As technology advances to create new distribution platforms, we are seeing a convergence of tastes and consumption as everyone gains access to the same content,” Noura Al Kaabi, twofour54’s CEO, told OBG.

Keeping It Local

Gaming and animation have been selected by twofour54 as components of the digital economy value chain where content is in high demand compared to what is currently being produced regionally. It is seeking to create a concentrated industry for each of these segments, with e-learning, e-commerce and e-publishing also on the radar as areas for which dedicated clusters could be created in the future.

The free zone has thus far attracted more than 250 companies, with the tenant mix ranging from international anchor brands such as CNN, Fox International, Cartoon Network and Ubisoft, to small local start-ups. The idea, according to twofour54’s Al Kaabi, is to create an ecosystem whereby “the anchor brands will serve as the content aggregators and distributors, while the entrepreneurs, supported by our incubation programme, will be the content creators”.

Prospective twofour54 occupants stand to be benefit from shared facilities and incentives, such as access to production studios, tax-free status and 100% ownership, which are commonplace in many of the region’s free zones. According to Al Kaabi, “We are not a real estate proposition and will only consider companies that are looking to transfer knowledge and expertise and make a contribution towards talent development. We want companies that share in our view that there are significant opportunities for producing content that is tailored to the region.”

Abu Dhabi’s ambition to produce and export media content certainly makes good economic sense as well. The MENA animation industry was valued at $1bn in 2011, according to figures cited by twofour54, while the regional online gaming business had revenues of approximately $100m by the end of 2012 and is projected to expand steadily to more than $800m by 2022. Yet Al Kaabi believes that beyond mere financial returns, developing a flourishing creative community will also serve as a complement to the emirate’s broader positioning as a centre for culture.

That's Entertainment

 To date, twofour54 has generated more than 18,000 hours of broadcast content across a spectrum of genres ranging from commercials, drama and television series to corporate videos and music promos. Success stories so far include “Driver Dan Story Train”, an animated show for preschool students created in partnership with the UK’s 3Line Media and local animation and production firm Blink Studios. Produced in both Arabic and English, the show now airs in 40 countries around the world.

In partnership with the Abu Dhabi Film Commission, a body that also sits under the Media Zone Authority, activity is spreading beyond the confines of the free zone, with the emirate now also being promoted as a shooting location for film and television. Filmmakers looking to source crews, equipment and production services locally where feasible are eligible to receive a 30% cash rebate for shooting movies and television in Abu Dhabi, an incentive which Al Kaabi told OBG is highly competitive when considering that the emirate is also a tax-free jurisdiction.

With the rebate as a starting point, Al Kaabi told OBG he believes that the industry’s cumulative growth will be self-perpetuating. “Once production companies and vendors realise that there is sustained demand for their services, they will look to establish operations in the free zone to take advantage,” Al Kaabi told OBG.

Examples of Hollywood feature films that have been shot in Abu Dhabi include “The Bourne Legacy”, “Syriana” and, more recently, “Beware the Night”. The emirate, according to Al Kaabi, can provide settings beyond just desert landscapes, “ranging from futuristic-looking mega-cities for science fiction films to grittier locations that can double for places in Iraq and Afghanistan”. A key feature that should appeal to international film productions, in addition to a near guarantee of blue skies year round, is the emirate’s safety and security.

In addition, Abu Dhabi is looking to engender an appreciation and understanding of cinema among its residents by hosting international film festivals. The Abu Dhabi Film Festival, for example, which takes place in late October, screens a blend of international and Arabic feature-length films, while TROPFEST Arabia, currently in its third year, is focused on showcasing short films from across the region.

Human Capital 

As Abu Dhabi’s media industry is evolving and developing, significant attention is being devoted to building up a local Arabic talent pool, both in terms of numbers and skills. One programme designed to help do this is tadreeb, a vocational media training academy operated under the auspices of twofour54 that has so far run courses for over 7000 students, 41% of whom were Emirati.

The venture has formed partnerships with flagship tenants, such as the Cartoon Network and Ubisoft, to establish dedicated academies in both animation and gaming. In addition, tadreeb also offers a 12-month paid traineeship programme, known as intaji, that aims to provide young Emiratis who are interested in the media with broadcast training as well as on-the-job mentoring. As part of the programme, students are taught by instructors from the BBC Academy, as well as other media organisations.

In mid-November 2013 twofour54 signed a partnership agreement with Agence France-Presse (AFP) to train journalists. Courses will be offered through tadreeb and taught by Arabic-speaking AFP journalists in the region, and will focus on developing professional skills, such as news writing, photography, media law and ethics, video production and editing. Speaking to the media, Al Kaabi said, “The programmes will upskill established journalists and introduce new journalists to the profession, helping to create a sustainable media industry for the region and ultimately adding value to the news that the general public consume.”

And tadreeb’s efforts are not just limited to the UAE either. In late November 2013 it announced that it had begun to offer media skills training courses in public relations and graphics design to Bahraini students, as part of a broader media training agreement with Bahrain’s Tamkeen signed in 2012.

Complementing tadreeb at the tertiary level is the Abu Dhabi campus of New York University, which offers majors in film and new media, theatre and visual arts, as well as a local branch of the New York Film Academy – the first accredited film school in the Middle East.

Outreach efforts are also under way at a grassroots level to inspire young Emiratis to pursue media as a profession. “Throughout much of the world, media is seen as an enticing industry that youth gravitate towards. But as it’s something new for this region, there is often a lack of understanding about the full range of career opportunities available,” Al Kaabi told OBG.

“People incorrectly think of media as only journalism or filmmaking. Yet if you’re passionate about IT, you can pursue a career in gaming or special effects. Or if you’re interested in law, you can specialise in media-related intellectual property. It can be a rewarding career offering both critical and commercial success,” Al Kaabi added.

Outlook

Solid economic and demographic fundamentals combined with the emergence of new growth sectors are helping to position the UAE as a regional advertising base across a variety of platforms. Currently an underrepresented channel, digital advertising, for example, is demonstrating notable potential expansion for forward-looking marketers. Abu Dhabi’s media landscape, though concentrated in ownership, does not lack for choice and diversity, and residents are able to access a variety of media catering to their needs and interests. Moreover, the sector’s potential going forward is considerable.

According to the Abu Dhabi Economic Vision 2030, the Middle East’s media industry is expected to expand by around 25% per annum. Looking to capitalise on this growth and expansion, the emirate has shown a commitment to incentivising and nurturing creative activity in the sector, with dedicated agencies, such as twofour54 and the Abu Dhabi Film Commission, offering support to prospective investors.

Indeed, MENA is hungry for more locally tailored output, and to meet this need Abu Dhabi is aiming to become a regional centre for generating Arabic content across a variety of traditional and new media and entertainment segments – youth-oriented ones in particular – such as gaming, animation and e-learning.