Ongoing investments in Qatar's media sector point to an evolving market

Although Qatar commands a powerful position in global energy markets, it is a relatively small state. Nevertheless, the country has cultivated significant soft power over the last decade by hosting international events, stepping up to play a role in diplomatic mediation and developing itself into a regional and global media hub. In the mid-1990s the authorities took ambitious steps in establishing the news network Al Jazeera, which has gone on to become a highly regarded cornerstone of international broadcasting, providing in-depth coverage and analysis of news and current events. Building on this success, the country’s media sector has evolved into a vibrant industry, evolving along with the global media landscape.

However, in recent times marketing budgets have contracted across the MENA region, in part due to falling oil prices. According to the UK-based advertising agency ZenithOptimedia, as energy revenues ease, companies located in major oil producing countries like Qatar have opted to cut back on marketing spending. Still, the state’s continued focus on building up knowledge-based sectors, such as production and publishing, has helped shape an environment conducive to the sector’s future growth and potential.

Print 

The print segment in Qatar is still relatively young. The two major players in their respective languages are the English-language daily Gulf Times, founded in 1978, and the Arabic-language daily Al Raya, which began circulating in 1979. The Gulf Times competes in the English-language market with The Peninsula, founded in 1996, and Qatar Tribune, in operation since 2006. Meanwhile, Al Raya competes with Al Sharq, founded in 1985, and Al Watan, which dates back to 1995.

Newspapers take the lion’s share of advertising revenues in the Qatari national market, accounting for over three-quarters of advertising spending between 2012 and 2014. However, revenues have fluctuated somewhat, rising by 83% from $264m to $384m between 2012 and 2013 before easing by 8% to $353m by end-2014, according to data collected by the Dubai-based media think tank, the Pan Arab Research Centre (PARC).

Advertising Markets 

Similar to the advertising markets of other countries in the region, Qatar has seen some of its largest advertising spenders reduce their marketing budgets, symptomatic of belt-tightening during the sustained lull in oil prices of the last few years. Cover page advertising fell from $55m to $49m between 2013 and 2014, according to PARC, while spending on inside advertising fell from $319m to $295m. Though these rates represent a drop in overall value, both figures remained about the same as a proportion of overall newspaper spending, accounting for 14% and 83%, respectively, of total newspaper spending in the state over the period, with the remaining 3% accounted for by supplement advertising. The three largest buyers of newspaper advertising for 2014 were Qatar National Bank, at $4.1m, the Sheikh Thani bin Abdullah Foundation for Humanitarian Services, at $3.4m, and local medical care provider Doctors Clinic, at $3m.

Qatar has also seen its magazine landscape evolve in recent years. Two major players in the market are Oryx Advertising and Firefly Communications. Oryx, founded in 1973 and owned by Qatari businessman Yousuf Darwish, publishes several magazines, including the current affairs monthly, Qatar Today; Glam, a women’s lifestyle magazine; and T: Qatar, a local edition of T: New York Times Style Magazine. Qatar Al Yom, is Oryx’s only Arabic-language publication and covers business. For its part, Firefly is a relative newcomer to the industry. Founded in 2007, it has several publications, covering business in The Edge, luxury lifestyle in Sur La Terre, cultural affairs in Alef, construction news in QCN and men’s lifestyle in Volante. The Qatari magazine advertising market was worth $11m in 2014, according to PARC. Interpage ads were the highest earners, at $9m, representing 78% of spending for the year. These were followed by back-cover ads and front-page ads.

As with newspapers, magazines also saw a reduction in overall ad spending between 2013 and 2014, from around $21m to $11m. The highest-spending clients of 2014 were car manufacturer Nissan, at $245,000, and its luxury vehicle division Infiniti, at $234,000, followed by Al Mourjan Restaurant, at $202,000.

On The Airwaves 

Qatar’s local television market, meanwhile, has continued to perform well despite lower advertising budgets. Although its earnings are not as large as other advertising segments in Qatar, local television continues to be seen as an important medium, even as digital platforms continue to grow. The proportion of Qatari internet users who said they consider television an important source of news, for example, actually rose from 53% to 66% between 2013 and 2015, according to “Media Use in the Middle East 2015”, the third annual media-usage study by Northwestern University in Qatar and Doha Film Institute (DFI). The two organisations worked together to collect data from more than 6000 participants to construct nationally representative samples from Egypt, Lebanon, Qatar, Saudi Arabia, Tunisia and the UAE. Correspondingly, according to PARC, the evening news was the second-highest-earning segment in 2014, drawing $2m, or about 21% of total local television spending. Other key segments were early-evening television, which took $3m, and afternoon television, with earnings of $2m. Total revenues for local broadcasts stood at $10m at year-end 2014, according to PARC data.

Television has continued to be important for Qatar’s economic aspirations and goals of becoming a cultural epicentre. Top television advertising spenders from within Qatar in 2014 included a national campaign for the conservation and efficient use of water and electricity, known as Tarsheed at $1.1m; Vodafone Qatar, at $910,000; and Al Dawa Islamia, a global Islamic NGO, at $675,000.

The regional Arabic-language market, with a population estimated at 370m, has traditionally been marked by intense competition. According to the media, more than 500 free-to-air satellite channels compete for audience market share and advertising spending. Qatar’s international broadcasting sector, however, is well established, following the launch of Al Jazeera in 1996. The global network has grown to become a major outlet for news, current affairs and entertainment, broadcasting to more than 220m households in over 100 countries, according to the network’s own data.

Al Jazeera is owned by the Qatari government but operates independently, with more than 70 bureaus and 3000 staff worldwide. Its network includes Al Jazeera English, launched in 2006; Bosnia and Herzegovina-based Al Jazeera Balkans, which began broadcasting in 2011 in the Bosnian, Serbian and Croatian languages; and Al Jazeera Türk, based in Istanbul. The new Turkish-language channel originally launched as a digital application at the beginning of 2014, with hopes to follow this up with a TV channel at a later date. Meanwhile, Al Jazeera’s North American TV news channel, Al Jazeera America, which began broadcasting in August 2013, earned itself several awards for journalism before it ceased broadcasting in April 2016, citing economic challenges in the US marketplace.

Stakeholders in the state have since been moving to expand beyond Al Jazeera, capitalising on its successes in the free-to-air satellite market. In addition to Al Jazeera’s children’s programming on Baraem TV and Jeem TV – both funded by Qatar Foundation – state-owned Qatar Television also broadcasts free-to-air inside the country. A newcomer has also entered the market in the form of London-based Qatari news channel Al Araby TV. The new channel, which is a subsidiary of Qatar-based Fadaat Media, was launched under the supervision of Azmi Bashara, a Palestinian academic and political voice with ties to Qatar’s leadership. Its programming aims to attract an audience of Arabic-speaking youth. Since it began operations in January 2015, it has worked with Qatar’s state-funded satellite company, Es’hailSat, to transmit its broadcasts.

Sports

While Al Jazeera and Al Araby TV both broadcast in the news segment, Qatari global television broadcasting has also found a foothold in sports reporting through the beIN Media Group (beIN). A spinoff of Al Jazeera Sport, the network’s former sports channel founded in November 2003, beIN has seen rapid expansion in recent years. In the summer of 2012 the network launched beIN SPORTS France and beIN SPORTS Americas. In 2013 it launched a channel in the Asia-Pacific region and by January 2014 had formalised its separation from Al Jazeera, rebranding itself as an independent network under the banner beIN SPORTS. With five companies and 34 channels across 33 countries, the two-year-old media group has moved quickly to establish itself in the Middle East and European markets. In November 2015 it announced the successful acquisition of broadcasting rights for Britain’s Premier League football matches in the MENA region for the 2016/17 and 2018/19 seasons. As for the European market, late 2015 marked a breakthrough. In December 2015 beIN SPORTS signed a deal with Spanish football stakeholders worth €1.9bn to broadcast La Liga, Spain’s premier football league, over three seasons from 2016 to 2019. beIN announced it made the deal through its Barcelona-based venture Mediaproducción. Spain-based competitor Telefónica DTS, meanwhile, paid €750m for a more limited lot of broadcasting rights for La Liga games.

The broadcasting deals are the result of months of negotiations by the Spanish football league, which, like other European leagues, is trying to raise more revenue from broadcasting. La Liga announced its total revenue for international and television broadcasting rights reached €2.65bn in December 2015, bringing its average broadcasting revenues per season up from €800m to €1.5bn, according to local media. England’s top-flight Premier League, meanwhile, has led European markets in broadcasting revenue raised since February 2015, securing £5.1bn in domestic deals alone. The stakes for this type of deal cannot be understated, as these matches are a magnet for audiences around the globe. In November 2015 beIN had exclusive broadcasting rights for an “El Clásico” match between Spanish football rivals Real Madrid and FC Barcelona. The broadcast reached an average of 1.9m viewers across the beIN SPORTS and beIN SPORTS en Español channels, according to US-based Nielsen Media Research.

Pay TV

In addition to its continuing expansion as a sports broadcaster, beIN has also indicated plans to branch out from sports into other entertainment segments, through the launch of pay-TV services. Although the region has typically had only one major pay-TV network – Dubai-based OSN – beIN announced in July 2015 that it would take steps to enter the market. The pay-TV landscape is also receiving newcomers from abroad, with US-based Starz entering 17 countries in the Middle East as Starz Play Arabia – a subscription-based, online video service – in April 2015. In addition, Netflix launched an over-the-top service for streaming its content in the Middle East in January 2016. As for beIN, the media group aims to expand upon its largely male-centric audience based on sports programming, with recent acquisitions set to position the company for its entrance into the pay-TV market. The company acquired Turkey’s largest pay-TV network, Digitürk, in July 2015. The deal was reported by the Financial Times to be worth between $1bn and $1.5bn, though no financial details were disclosed to the public. At the time of sale, Digitürk had nearly 3.5m subscribers and rights to broadcast a content mix that included sports and entertainment. The move could help beIN to both expand its core sports business and further its ambitions to break into the entertainment sector. “Expansion into the Turkish market is a natural next step for beIN, due to the proximity of the Turkish market to the MENA region,” Nasser Al Khelaifi, chairman and CEO of beIN, said in a press release regarding the acquisition of the network.

Content Rights 

beIN has also been inking output deals for popular US content in the Middle East. In November 2015 it announced an agreement with the independent, Dubai-based film distribution company, Front Row Filmed Entertainment. Front Row has struck deals in the past with several Hollywood studios, including New Line Cinema, Exclusive Media Group and Cinema Management Group, which have helped it compile content rights to broadcast popular films across genres. “As we launch our entertainment portfolio, it is imperative that we align with independent content aggregators,” Yousef Al Obaidly, deputy CEO of beIN, told media following the deal. “We are confident that this partnership will be a major asset to the network’s expansion.”

In another landmark deal, beIN bought the Hollywood studio Miramax from a consortium headed by American international investment firm Colony Capital in the first quarter of 2016. The deal gives beIN rights to Miramax’s library of some 700 films, including titles that are still popular among US viewers, such as Pulp Fiction and No Country for Old Men. Although details of the deal have not been made public, international media reported that the consortium had originally asked for $1bn when they began their search for a buyer in 2015.

The Big Screen 

While the likes of Al Jazeera, beIN and others continue to broadcast popular foreign content around the globe, a different set of players are working in Qatar to shore up the creation of film content in the state itself. DFI, under the leadership of Sheikha Al Mayassa bint Hamad bin Khalifa Al Thani, has been behind major efforts to cultivate rising stars among Qatar’s local film talent. Central to this mission is the production of original, multi-platform content, including films, commercials, television programmes and videos for the web. Further to these goals, DFI hosts its own production unit, DFI Productions, which collaborates with local and international filmmakers to bring in the world’s top performers and create training opportunities in Qatar. Through its annual film festivals, Ajyal Film Festival for the Young and the Qumra Film Festival, coupled with funding programmes and showings of both local and international films, the institution has offered key support to Qatar’s budding film industry since its foundation in 2010. One of DFI’s key local partners is Katara Cultural Village, which hosts a series of exhibition spaces, theatres, concert halls and other cultural venues built on reclaimed land in Doha between West Bay and The Pearl-Qatar.

Local Productions 

DFI’s efforts, in conjunction with those of other local players, have not gone unnoticed. “Eight years ago many of the high-end productions were produced and directed from companies abroad, as local clients did not believe or trust local production companies at the time,” Stefan Lindberg-Jones, managing director of Qatar-based Ginger Camel media-production company, said in an October 2015 panel meeting covered by local media. “Over the last eight years, [local production companies] have worked endlessly to prove to agencies and large companies here in Qatar that there is an industry locally based, and that we are as good, if not better, better than companies abroad,” he said.

The panel, which focused on Qatar’s film industry, was organised by DFI and held at Doha’s Museum of Islamic Art. Other film stakeholders that participated included Resolution Studios and Innovation Films, two local production companies. Representatives from the three firms described how local production studios currently rely on producing commercial content to support their aspirations of creating short and feature-length films. Over time, the idea is to begin producing more Qatari films that can attract more widely dispersed audiences. Until then, local production companies are continuing to work with NGOs like DFI to develop and promote film production in the state. “[Our hope is] that DFI and local-based production companies can work together to build an industry here in Qatar, working together to promote local talent [and] films,” Lindberg-Jones said.

Digital Content

Globally, internet advertising has been steadily making gains on traditional segments like print. The internet’s share of global advertising spending is set to rise to 34% by 2017, just behind television’s expected 35.9% that year, according to UK media consultancy ZenithOptimedia’s industry forecasts. Meanwhile, in Qatar, growing access to the some of the world’s fastest internet speeds is increasing the consumption of digital media, which could mean more opportunities for growth in both content and advertising.

A fast-developing ICT landscape has supported the rapid expansion of telecoms infrastructure in Qatar. The number of internet users in the country as a share of the total population is among the top 12 in the world, according to data from the Ministry of Transport and Communications, which was previously called the Ministry of Information and Communications Technology (ictQATAR). In 2015 both of the country’s telecoms operators, Oordeoo and Vodafone Qatar, deployed advanced carrier-aggregation technology for their LTE networks to deliver even faster speeds to customers (see ICT chapter). In addition, at over 80%, the country has one of the highest smartphone penetration rates in the world, according to data released in December 2014 by ictQATAR. This combination of sophisticated mobile broadband infrastructure and fast uptake of new devices has opened doors for the digital and social media segments. Indeed, the proportion of Qataris who say the internet is important to them as a source of news grew from 75% in 2013 to 88% in 2015, according to Northwestern University in Qatar and DFI.

The importance of Arabic-language content is also on the rise. The share of internet users polled who reported using English to access the internet decreased from 41% to 33% across the region between 2013 and 2015. Still, Qatar’s population continues to rank highly in the region for its ability to access content in English, with 38% of Qatari internet users accessing English-language content. Qatar also had the highest proportion of nationals watching television in English, at 32%. This was followed by the UAE (26%), Lebanon (22%), and Tunisia and Saudi Arabia (both at 16%).

Globally, growth in mobile media content seems to be making significant gains. While desktop internet advertising accounted for 19.8% of global advertising spending in 2014, this is set to ease slightly to 19.4% by 2017, according to ZenithOptimedia. As for the mobile advertising segment, major changes are also afoot. Although mobile ads accounted for 5.7% of 2015 global spending, the UK-based firm expects this to reach 15% by 2017. The trend towards increasing mobile content is visible in Qatar, as well, where mobility seems to be a key factor for social media users. According to ictQATAR, as of December 2014, 50% of all social media users and 70% of Qatari nationals said it was important for social media to be mobile-friendly, with 20% of the sample saying they would leave a platform if it were not mobile-friendly.

Outlook

Media – whether consumed in print, through broadcasts or on the web –  is rapidly developing in Qatar. State support for large broadcasting projects like Al Jazeera, beIN and the newly launched Al Araby news network have helped create a name for Qatar in the global media world, while more dynamic players in film and local production are refining their skills through international partnerships. Although lower energy prices may have dampened marketing spend in the short term, the sector’s long-term prospects still hold potential. As the country’s two telecoms operators roll out some of the most sophisticated mobile internet infrastructure in the world, media companies in Qatar also stand to gain from the possibilities of growing web and mobile segments.