A Diamond’s Eye View of the World

a multi-faceted look at the middle east, and the middle west

taking the “advertising cake”: today’s Arab satellite channels

Posted by adiamondinsunlight on November 15, 2009

I’m not a big television watcher: I don’t even own a television. But I do watch the television industry – particularly that in the Arab world. This weekend, The National, Abu Dhabi’s well-funded English-language newspaper, published a very interesting piece on the current state of the Arab satellite television industry.

Here’s the article, with commentary:

ABU DHABI // Despite losing billions of dollars every year, many Arab satellite television channels continue to operate because their purpose is to push political agendas, a recent report says.

[I’m not sure about the idea that each of these channels is meant to advocate a political agenda. There are all kinds of channels on air: real estate channels, “environment” channels, children’s channels, music video/sms channels, movie channels, etc. I agree that most are not economically viable – but this doesn’t mean that all are operated for political reasons. Some seem to be more vanity channels than anything else – a sign of the owner’s wealth, or philanthropic outlook, or cultural orientation, or technological hipness, or … the list is endless. After all, who knows what someone rich enough to bankroll a satellite channel might want out of it – the delightful variety of buying something other than another sports car?]

There are 510 Arab satellite channels operating at a cost of nearly US$6 billion (Dh22bn) a year, according to the report from the Emirates Centre for Strategic Studies and Research.

[Wow. in 2007, if I remember correctly, there were just over 300 channels. That’s a growth of 100 channels per year in the past two years – two years dominated by a major economic crisis. It might also help to think of this comparatively. The Arab world has an estimated 2009 population of nearly 340 million – which means that there is one channel for approximately 670,000 viewers. The United States has an estimated 2009 population of 304 million, which would mean by extension that we would under the Arab model have more than 450 channels. But our channels are meant to be profitable – and profits for them require viewerships in the millions.]

The combined annual revenue of those channels is less than $700 million, the report said.

[Wow, again. Operating costs: $6 billion. Revenues: $700 million. That’s an annual operating deficit of $5.3 billion. Even taking out the operating costs borne by state channels, think of how many sports cars and other luxury items that money could buy for these stations’ owners. The intangible benefits of station ownership must be very, very compelling.]

“That clearly means there are a number of satellite channels that are able to continue broadcasting despite their losses for more than 18 years,” said Ali Jaber, the dean of the Mohammed Bin Rashid School For Communication in Dubai.

“It also means that those who fund those channels despite their losses are governments and businessmen who have political pursuits.”

[Ummm. Here’s where we differ. I do agree that the clear non-viability of these channels means that they are being bankrolled by people who are indifferent to the cost – including governments running national channels. But I do not agree that all the private channels must be run for political gain – and I don’t think that Jaber has made his case for this argument.]

However, many of the channels have been unable to achieve the social and political change they had hoped for, researchers found.

“It’s true the number of channels has doubled and the quality of programmes has developed,” said Dr Mohammed Ayesh, a communications professor at Sharjah University.

“But the bigger question is how much they have contributed to political progress and cultural development. That is something that is still far out of reach.”

[Is that the standard by which television channels should be judged? I think there has been an elision here, between American and European ideas of public, non-profit channels and Arab-world channels that de facto bleed money. We do not ask whether NBC or HBO aid Americans’ political progress, or enhance our cultural development. I’m not sure that this is a fair standard to put on Arab-world channels.]

He said many channels were a source of cultural confusion because their programmes were not in harmony with the social norms of the Arab community.

[This is an interesting, but somewhat different issue.]

The report, which was published in the latest issue of Future Horizons magazine, found that Arab satellite channels account for two per cent of global advertising spending.

Most of that revenue, 95 per cent, is collected by fewer than 10 per cent of the channels.

[Advertising rates are incredibly low throughout the region, including print as well as broadcast media. I think these statistics show two things: that there are some highly viable channels broadcasting today, and that the others either have too few viewers to attract advertisers or do not make an effort to attract them.]

But the goal of many satellite channels is not to earn revenue, but to attract viewers to serve political agendas, Mr Jaber said.

“The advertising cake is known and its value is, at most, US$700 million annually, which is shared among the main networks, with small amounts left for small channels that revolve around the main ones,” he said.

[Um. First, I love the translation of “pie” as “cake”. Second: $700 million was the amount listed above as the total channel revenues. If this is the same number, I would like to know why other revenue streams – including mid-2000s revenue darling sms scrolls – have been excluded.]

Ahmad Abdul Malik, a Qatari writer and a founder of Sharjah TV, said many Arab satellite channels failed to attract large audiences because they lacked quality programming and were seen as propaganda outlets for governments and other groups. “I think the Arab official satellite channels have been obsolete,” he said. “And I can list more than 16 official satellite channels that no one in the Arab World would want to watch because they lack the basics of television operation, and they were established for political propaganda.”

Mr Malik said only a few private channels attracted large audiences because they “deviate from the ways of the official propagandistic channels”.

The rest, he said, either claimed to be independent when they were really official “to the very core” or called for sectarianism and indecency.

[This man says quite a lot. There is a quality issue: many channels simply buy older, already-broadcast content, generally from the U.S.. People still refer to Friends, for example. There is also an issue of blatantly propagandistic channels, often also sporting poor-quality productions – like Al Hurra😀. I think his statement about what channels people choose not to watch needs to be parsed a bit further: channels people do not watch because their content is bad or not interesting, and channels people do not watch because they disagree with their political line.]

Mohammed al Mashnooq, another media expert, said channels had fallen into the “hands of governments” because they lacked clear media strategies. TV channels that met the demands of genuine democratic change, transparency and freedom were the ones that would flourish, he said.

[I like Al Mashnooq’s optimistic viewpoint, but again, I’m not sure that television channels should be expected to do all this.]

The report found that despite current losses, some advertising experts were predicting an increase in spending in this sector, because of the growing number of channels and a larger, more active advertising market.

Between 2004 and 2007, according to Arab Consultants Group, the number of Arab satellite channels grew by 270 per cent.

The number of channels owned by the private sector increased by 56, music channels increased by 54 and channels owned by governments increased by 38.

There are now 1,100 satellite channels registered in the Arab world, but only 510 are operational, broadcasting from three satellites: ArabSat, NileSat and NourSat.

[Goodness. 1,100 channels? I can’t even imagine.]

Some of the more popular channels are Al Jazeera, which is based in Qatar; and Al Arabiya and MBC, which are based in Saudi Arabia but broadcast from Dubai.

[These are popular channels – actually, networks, with each having one flagship and several subsidiary channels. But Al Jazeera has historically had a very difficult time getting advertising – other than ads from Qatari state companies, that is. And I’m not sure that Arabiya does all that much better. MBC is the only network I see with a fully articulated economic model that pushes for a sizable advertising revenue stream.]

The UAE hosts 22 per cent of Arab satellite channels, the most of any country in the region.

[And most of these are Saudi-owned. Again – a very, very interesting article, about a complex, engaging topic.]

You can read the article, sans commentary, here.

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