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Dubai lures global media giants

Tax-free zones, high-tech buildings boost biz

BEIRUT — Only seven years ago, Dubai’s ambition to transform a seemingly lifeless plot of desert into a buzzing international media hub may have seemed far-fetched for many industry execs. But today the emirate hosts some 70 broadcasters, delivering more than 170 channels of TV content from the sprawling complex known as Dubai Media City.

Established in 2001, the tax free zone has been a pillar in the U.A.E. government’s bid to diversify its oil-dependent economy. And by many accounts, the plan seems to have worked.

Offering a lucrative package of incentives, the DMC’s tenants now include CNN, Reuters, Dow Jones Intl. and CNBC as well as regional media powerhouses such as Showtime Arabia, MBC and Dubai TV.

In addition to broadcasters, the DMC’s 300-plus tenants include dozens of publishing and production companies as well as some of the region’s biggest advertising firms, including the Choueiri Group, which announced the opening of its DMC headquarters in November.

The growth has been so stellar that Dubai’s government is now rapidly leasing space in yet another cluster, dubbed Dubai Studio City, to accommodate a new influx of broadcasters from the likes of MTV Arabia and Dutch production giant Endemol.

Dubai’s ability to attract such an impressive roster of multinational and Arab firms has largely been attributed to its relatively unconventional way of doing business.

In addition to being tax free, both Studio City and Media City offer streamlined systems for acquiring office space and broadcasting licenses — uncommon facilities in a region that is rife with bureaucratic procedures, especially in the media sector.

The government has also invested billions of dollars in its infrastructure and is funding a raft of cutting-edge construction projects that have drawn interest from major financial institutions.

“Dubai was kind of an obvious choice,” says Bhavneet Singh, senior vice president of MTV Networks Intl. “We didn’t really have to consider any where else.”

Like many broadcasters, Singh offered glowing reviews of the Emirate’s business and communications amenities

“It’s a great location with the infrastructure that we need to operate effectively,” says CNN spokesperson Susanna Flood.

At Showtime Arabia, CEO Marc-Antoine d’Halluin says the DMC won out over other regional locations including Kuwait, from which the majority of its investors, Kuwaiti investment company Kipco hail.

“In terms of a media hub and the size of the market, the U.A.E. was a bigger attraction to the company,” he says. “Dubai offered the right mix that we were looking for in terms of connections to clients, ease of doing business, infrastructure, all of these factors.”

But while Dubai’s amenities have impressed, many major productions continue to take place in cities like Beirut and Cairo.

MBC, for example, says its headquarters will remain in Dubai for the foreseeable future, but, according to marketing director Mazen Hayek, “We will continue to develop our production facilities elsewhere in the region.”

“I think a lot of the talent and creative skill throughout the region, whether that’s in Syria, Lebanon or Egypt, is still there because of the high cost of living in Dubai,” says MBC founder and chairman Sheik Waleed al Ibrahim. “But Dubai has been able to establish itself as the city where a lot of deals and transactions can happen and be done.”

The view is shared by many Dubai-based broadcasters who increasingly complain about the rising cost of living and the difficulty in locating talent.

“The main challenge is talent and crews and cost of accommodation,” says Ziad Kibbe, the head of Endemol Middle East. “Local talent does not really exist in Dubai so you have to fly people from other locations whenever you’re doing a big show.”

Showtime’s d’Halluin agrees that production costs have become a significant issue. “When you enter the business of producing movies and TV series, Dubai is an expensive place to do that compared to other markets,” he says. “For broadcasters, Dubai is very interesting, but from a production perspective, there are markets like Beirut and Cairo where production costs are lower.”

At the same time, most broadcasters agree that Dubai’s pro-business attitude still outweighs the prospect of wasting unforeseeable amounts of time dealing with the arcane bureaucracies and sluggish legal systems that exist in more competitively priced Arab production capitals.

Beirut in particular remains a favorite for talent, crews and locations; however, it is often seen as too politically unstable for a permanent presence by major media firms.

For CNBC Arabiya — one of the DMC’s earliest tenants — the choice was simple, according sales director Omer Ghani.

“Dubai was very easy; the infrastructure was there, the tax breaks were there,” he explains. “It’s like Disneyland, everything works. There isn’t even a red light that doesn’t work in Dubai.”

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