Rupert Murdoch flags Abu Dhabi as key location in expansion

Partnership between Murdoch's Fox and twofour54, Abu Dhabi's media zone, announced on eve of first Abu Dhabi Media Summit

Rupert Murdoch, the chairman of News Corp, and his wife Wendi at the 82nd Academy Awards at the Kodak Theater in Hollywood.

Rupert Murdoch, the chairman of News Corp, has signalled that Abu Dhabi is to become a key location in his efforts to expand across the Middle East. The media giant revealed plans to open a raft of offices in the capital. Fox International Channels, a subsidiary of News Corp, is making Abu Dhabi its regional hub for online advertising sales, documentary production and satellite television broadcast.

The partnership between Fox and twofour54, Abu Dhabi's media zone, was announced on the eve of the first Abu Dhabi Media Summit, at which Mr Murdoch will deliver the keynote speech today. Mr Murdoch is expected to highlight the importance of the UAE and the Middle East region in his address. David Haslingden, the chief executive of Fox International Channels, said: "We are investing because we are confident that the sheer sociographic structure of the Middle East means that there is going to be a very large and demanding audience for media products."

The Middle East has a population of more than 300 million, half of whom are under 25 years old. GDP in the region is expected to increase 9 per cent between last year and 2013, according to the consultancy Booz and Company. Online advertising, bolstered by the rapid expansion of broadband networks, is expected to increase by about 40 per cent annually for the next five years, Booz said. This kind of growth outlook helped lure Fox into opening the regional headquarters of its global online advertising business, .FOX ("Dotfox"), in twofour54.

"If we can establish a sales office here, and have local sales executives as well as executives who are targeting local publishers, we may be able to secure a leadership position in this business, which is exactly what we are setting out to do," Mr Haslingden said. Tony Orsten, the chief executive of twofour54, said the partnership would also give local digital media companies easy access to a means of making money from their content, which in turn would drive the creation of more Arabic content.

According to several recent studies, Arabic content makes up only 1 per cent of the content on the Web, despite Arabic speakers making up 5 per cent of the world's population. "We are very keen to develop, from an internet perspective, content in Arabic, and one of the most important aspects of this is monetisation," he said. "To have a partner like Fox is a fantastic opportunity." Fox also plans to set up a high-definition and 3D documentary film production office in Abu Dhabi, through its documentary production arm, Natural History New Zealand, a production company with experience of working in emerging markets.

Finally, Fox will shift the broadcast of at least 10 of its 12 channels in the Middle East from Hong Kong to Abu Dhabi. These channels fall under the Fox, Star and National Geographic brands. "The closer you are to your audience, the faster you can be at reacting to time-critical elements," Mr Haslingden said. "Communicating with people who are as far away and in as different an environment as Hong Kong, a lot falls between the cracks."

Fox's decision to open an office in twofour54 grew out of its relationship with Abu Dhabi Media Company (ADMC), with which it teamed up to launch the world's first free-to-air National Geographic channel last year. ADMC owns and publishes The National. "We had quite a good experience working with them, and we learned quite a bit about the potential of the region for the television industry," Mr Haslingden said.

"I think that these announcements are really evidence of the fact that when you get into business with smart, well-positioned people, that business tends to grow and evolve into areas that weren't previously anticipated." @Email:[e-mail]