More TV stations, less reason to change channel



There are now more than 500 free-to-air television channels in the Arab world, an increase of more than 10 per cent on last year, according to a report by the Arab Advisors Group.

Growth in the number of free-to-air TV channels is nothing new. The number of stations has been growing steadily, with an increase of 438 per cent between January 2004 and April 2011.

As of April 2011, there are 538 stations broadcast on the Arabsat, Nilesat and Noorsat satellites, Arab Advisors said today.

But this is no reason for regional media executives to rejoice. For an increase in the number of TV channels is not indicative of exuberant growth in the Arab world's media industry.

The reason for that is, out of these 538 stations, only a minority make serious money.

Television advertisers currently seek mass audiences - something that the majority of Arab stations distinctly lack. Many channels are loss-making, are run as vanity projects, or are owned by governments and do not have the same financial pressures as the private sector.

As Jawad Abbassi, the founder and general manager of Arab Advisors, told The National last year: "The 80-20 rule applies: 80 per cent of the audience follow 20 per cent of the stations. Some of the channels get very little audience share."

This is a shame, as there is room for more niche, targeted television stations geared towards specific populations. But the technology behind the mainstream Arab television industry does not favour this, because the same satellite-TV broadcasts get beamed out across the entire region, from Morocco to Oman.

Until that changes, the mindset of TV advertisers is likely to remain pan-Arab, rather than focusing on targeting specific countries. And while the number of stations may grow, the smaller stations are unlikely to flourish.


World Test Championship table

1 India 71 per cent

2 New Zealand 70 per cent

3 Australia 69.2 per cent

4 England 64.1 per cent

5 Pakistan 43.3 per cent

6 West Indies 33.3 per cent

7 South Africa 30 per cent

8 Sri Lanka 16.7 per cent

9 Bangladesh 0

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Name: Kumulus Water
 
Started: 2021
 
Founders: Iheb Triki and Mohamed Ali Abid
 
Based: Tunisia 
 
Sector: Water technology 
 
Number of staff: 22 
 
Investment raised: $4 million 
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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