10.17 AM Wednesday, 27 September 2023
  • City Fajr Shuruq Duhr Asr Magrib Isha
  • Dubai 04:52 06:06 12:13 15:36 18:14 19:27
27 September 2023 $dmi_content.escapeHtml4($rs.get('weather.code.w${report.significantWeather.code}')) Max: 38 °

Media industry to face a reality check this year

Developing nations have an advantage as far as print media is concerned. (EB FILE)

By Vigyan Arya

While some hope for a V-shaped recovery, others are worried about the double dip of 'W' this year, but professionals agree that the region's media will be more realistic and cautious in its approach in 2010.

Ever since the beginning of the economic downturn, media has witnessed a massive drop recorded as high as 28 per cent globally. However, in the region – especially in the UAE – media took a deeper plunge as most of it was dependent on the real estate sector that was hit hard, for advertisement revenues.

Tanvir Kanji, Chairman of Inca Tanvir, summed it up the best during his new year greetings broadcast: "Let's bury the past and resolve to make 2010 the best year ever." Speaking to Emirates Business on the lessons learned from 2009, Tanvir said: "We have all learnt to be realists."

In a realistic approach, Tamra C2 Managing Director, Tony Husseini, said:?"Last year was a year of panic and now we have a fair idea about what to expect. If it doesn't get any worse, 2010 should be a year of recovery."

Elias Ashkar, CEO, Saatchi & Saatchi for Mena and Pakistan, gave a regional perspective and said:?"Agencies will benefit from the crisis by becoming mean, lean and more effective. Certainly, they will have to become more creative by doing more with less. There is no room for lazy approach and fat margins. The consumer will be a king more than ever before. Clients would want a lot more for less."

Ashkar shed light on his company's approach: "2010 will be another challenging year with lot of uncertainties and lack of confidence. There will be significant movement among people and businesses."

Kanji added a more serious outlook: "We all face the new reality and have to adjust to it and avoid wastage of resources. Business growth will be slow and steady unlike in the past."

He said 2008 figures were far beyond anyone's expectations and industry will take longer than expected to get even closer to those figures.


While most regional and local companies are looking at cutting cost and retaining their operations, multinational companies such as S&S are taking expanding in the region.

"Yes, we do [have expansion plans]," said Ashkar. "The Levant will become more strategic for us and we will be opening a wholly owned office in Lebanon. The Abu Dhabi and Qatar markets will be closely monitored as potential regions for expansion."

Husseini said his company is looking for horizontal expansion rather than going vertical. "I am planning my expansion on satellite basis."

Representatives of his firm are already travelling regularly to Abu Dhabi and Qatar as plans to open fully operational offices are on.

Meanwhile, communications company, OMD has beefed up operations in Doha and sent a few executives from the Dubai office to undertake new jobs and handle campaigns in the fast growing market in Qatar.

Elie Khoury, head of Omnicom Media Group in the Middle East, the parent company for OMD, said: "The company would continue to drive its expansion plans with high emphasis on growing subsidiaries PHD and Integral in addition to expanding digital offering."

Khoury forecast high single-digit growth levels for Omnicom in 2010, while the industry continued its transformation with higher emphasis on accountability, digitisation of services and the emergence of business intelligence as the biggest lever to drive service offering.

The digital market, Khoury said, is expected to achieve 40 per cent positive growth in the coming three years making the digital market bigger than cinema and radio combined and reaching $300 million (Dh1.1bn) or eight per cent of total regional investments [real versus monitored] by 2012.

In an obligatory approach to get the best out of a campaign, most media houses are seeing the emergence of digital platform that is "widely used, widely available and is very affordable", Husseini added.

Khoury said: "The market bubble caused by artificial, unsustainable investments has been eradicated and we are back to the healthy market levels of 06-07."

Print order

The challenges triggered by the changes in the last one year are not in any way signaling the demise of print industry but rather an evolution. Technology was responsible for making print as the most popular and reliable medium with the emergence of web printing, and now, the World Wide Web complements the print industry enhancing and broadening its reach.

Developing nations have an advantage as technology is still catching up and a very large section of consumers still rely on the daily dose of newspapers and magazines for information.

Developed nations, on the other hand, narrate a different story and new technology, laced with the current recession has seen a closure of more than 10 local and regional newspapers in the last 12 months in North America alone.

Alarmed by the trends in the developed world, the global media is gearing up to face the downturn with new business models using modern technology and platforms.

Stating their faith in the digital media, some media professionals emphasise the technological advantage of the industry. "Digital will be growing in our region faster than any other media. However, this growth will be built on the small digital business base and will still be below the double digit figure for a while," said Ashkar.

The challenged state of the print industry in developed world markets does not signal the demise of the sector. Rather, 2010 is likely to mark the emergence of a range of new business models, including shared backroom infrastructure and online-only delivery.

Television rediscovers itself

Although the prospects for television in 2010 do not look great, the year could prove to be a period of renaissance. One of the boosts that television is likely to receive is in viewing hours, which tend to be counter-cyclical. Indeed, in the latter half of 2009, average viewing hours were already rising in some major markets as consumers increasingly entertained themselves at home.

Viewing hours may be boosted by digital switchover, one impact of which is to increase the number of channels available to consumers. Overall viewing is likely to rise by 30 minutes per week per viewer, Deloitte predicted.

The status of television may also be boosted by its pre-eminent role in two of the major global events of the previous years: the Olympic Games and the US Presidential election. Both events saw heightened use of a range of other media, from online video to mobile internet, for distribution of news. But television appeared to take the dominant role from the perspective of viewing figures and revenues.

The bonanza of Fifa football World Cup in South Africa this June will contribute to tightening of the small screen's grip and increase its share of revenues.

While advertising was likely to be tough in all countries because of the downturn, the television industry should view its situation in context and consider how other media are doing.

The media may well find its performance improving. It may be a good time to take advantage of that and the stronger cash flows to put some distance between itself and other media. The anticipated recovery period could be a good time for the strongest players to invest in content, contracts and an updated infrastructure.

The current deployment of HDTV by local broadcasters should be slowed as little as possible, as HD further enhances and differentiates the television experience for consumers.


Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here