Dubai’s media industry grows, but headline challenges remain

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Dubai’s media industry attracted more than 250 new players in 2012, but fundamental problems in the industry are inhibiting further growth, executives say.

The Tecom Media Cluster - which comprises Dubai Media City, Dubai Studio City and the International Media Production Zone (IMPZ) – saw an influx of companies and freelance workers last year, according to figures published on Tuesday.

Mohammad Abdullah, the managing director of the Tecom Media Cluster, said there are now more than 1,820 partners across the three centers. Occupancy levels in 2012 stood at 100 percent for Dubai Studio City, 93 percent for Media City and 70 percent at IMPZ, he said.

“We are noticing a demand from the west and even the east – China and India – to do film and TV productions in Dubai,” said Mr Abdullah.

Tecom’s media free zones attracted new business partners including Euronews, Ticketmaster and Getty Images. The 257 new registrations were offset by 170 firms and freelancers who left the zones, giving a net increase of 87 for last year.

Mr Abdullah said he sees growth in five key areas of the local media industry in 2013, including digital publishing, internet advertising and film and TV production.

But challenges include the development of local talent, a lack of funding and piracy, he said.

Amit Radia, the head of the Dubai-based printing firm Atlas Group, acknowledged his industry had been through difficult times. “The print industry has been through a major struggle over the past few years, especially with the recession,” he said.

Atlas Group has a specialist printing press at IMPZ, which produces 52 international newspapers on an “on demand” basis for clients including some of the region’s major airlines.

The company has access to more than 1,900 international titles, which it can print in newspaper format on the same day of publication as the country of origin, and sometimes even earlier depending on the time difference. “The Daily Mail is distributed in Dubai quicker than it is in the UK,” said Mr Radia.

Such advances in technology mean that print is still viable in the digital age, he added. “Print is actually, despite what people say, a huge business”.

But other challenges remain for the Middle East’s media industry.

Nathalie Habib, the executive producer at Blink Studios, said the Arab world relies too heavily on imported TV formats, while not creating enough original content of its own.

“Maybe, in the future, we can stop importing our content and start exporting it. We always have to imitate – why?,” she said. “We import from other parts of the world and we adapt formats. Animation studios are struggling, production studios are struggling… Content can bring a lot of money into the region.”

Other media zones in the wider information and communications technology (ICT) sector also reported more business registrations last year.

Malek al-Malek, the managing director of Dubai Internet City (DIC) and Dubai Outsource Zone, said DIC saw 175 new registrations over the last year. These included the social media giants Facebook and LinkedIn, which both set up offices in Dubai during 2012. “We’ve been seeing a growth in ICT of an average of 15 percent annually,” said Mr al-Malek.

Jean-Marc Paufique, chief operating officer at the business website Zawya, said he saw “very healthy trends” in the Middle East and North Africa’s media industry.

“Revenues for the media are growing faster than the economy. And online is growing much faster than the rest,” he said. “There is a strong need for good quality local content”.

But despite the rising advertising revenues, not all media companies are making money.

Mazen Hayek, the official spokesman and group director of public relations and commercial at MBC Group, said the overall media industry was not profitable.

“The media and entertainment industry in this part of the world loses money,” said Mr Hayek.

MBC is “among the very few media conglomerates who are cash-flow positive”, Mr Hayek said. MBC Group is behind television channels including MBC1 and the Al Arabiya news station, as well as

Mr Hayek argued that, while there are more than 650 TV stations in the region, the top 50 attract between 90 and 95 per cent of the revenues.

“You have more than 600 channels that are struggling for 5 percent of market share. So these are probably 600 channels that no one watches and no one advertises on. This is a region that can barely sustain more than 50 channels,” said Mr Hayek.

Mr Hayek, Mr al-Malek and Mr Paufique were speaking at a conference in Dubai organized by the London Business School.

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