Firms herald Saudi media city plan

Regional media companies are looking to expand in the advertiser-rich market of Saudi Arabia as anticipation builds over plans for a media city within King Abdullah Economic City.

Dubai - January 19, 2010 - Matthieu De Clercq is a senior manager with A.T. Kearney Limited in Dubai, January 19, 2010. (Photo by Jeff Topping/The National)  Object Name:	DECLERCQ
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Regional media companies are looking to expand in the advertiser-rich market of Saudi Arabia as anticipation builds over plans for a media city within King Abdullah Economic City. The media city would help diversify part of the Saudi economy away from oil to knowledge-based industry and provide more skilled employment for its large population of young people.

"All the big media companies today are Saudi-owned - Rotana, ART, MBC - and the big market is Saudi Arabia," said Matthieu De Clercq, a consultant with AT Kearney in Dubai. "So there is a clear question that needs to be asked, and that is why can we not bring some of those back to Saudi Arabia?" In a white paper last year entitled "Middle East Media on the Move", Mr De Clercq said King Abdullah Economic City's media city would present great potential "for media companies of all sizes to gain access to the largest population base in the GCC, and one of the wealthiest nations in the Middle East".

But he concluded that "significant regulatory change will be required for success". With a population of 28 million, Saudi Arabia already dominates the regional media scene. Television broadcasters based in the UAE use their ratings within the kingdom to formulate their advertising rates, and the region's efforts to improve audience measurement have been largely focused on installing "people meters" in Saudi households.

MBC, the largest of the pan-Arab satellite television broadcasters, has been in talks with Saudi officials about plans to move into the new media city. "They have said they are planning a media zone, and when the media zone is in place with the regulatory environment that has been described, that will clearly be attractive for all our productions which we are already doing in Saudi, but would be a lot easier to execute," said Sam Barnett, the general manager and chief operating officer of MBC.

MBC has already opened production units in Riyadh and Jeddah, and produces some shows, such as its top-rated Ramadan comedy show Tash Ma Tash, in the kingdom. But working within the media city would make everything from satellite links to finding talent easier. "I understand that they are talking about having special visa regulation for the whole King Abdullah Economic City so that it would be easier to come in and go out," Mr Barnett said.

The timetable for the development of the city remains vague. This month, Arab News reported that Dr Abdul Aziz Khoja, the Saudi minister of culture and information, announced the kingdom would soon have its own integrated media city, but declined to say where or when. However, not everyone is holding out for the media city. Nezar Nagro, the president of Rotana Media Services, the commercial arm of Rotana, said the company had no plans to take part in the media city project.

It already had offices in Jeddah and Riyadh, Mr Nagro said, although it was looking to boost activity in the kingdom this year. Last year, advertising spending in the kingdom was down by between 10 and 15 per cent, he estimated, and he is planning on a significant improvement this year. "This is one of the major markets, Saudi Arabia, for our holding company and our branches," said Mr Nagro, whose company is owned by the Saudi billionaire Prince Alwaleed bin Talal bin Abdulaziz Al Saud's Kingdom Holding. "There is a lot of action in Saudi Arabia."

Abu Dhabi Media Company (ADMC), the owner and publisher of The National, is opening its first office in Saudi Arabia this year, according to Raja Halabi, the chief commercial officer at ADMC. "One of our big focuses is on sales, because we believe Saudi continues to be one of the most important markets for us," Mr Halabi said. "We want to be very close to our partners, our advertisers and agencies operating out of Jeddah and the entire kingdom."