Web of desire

Arab TV, online explosions fuel expansion

Dubai, with some justification, sees its future as the most exciting media city in world. Within its modest

border it has, seemingly in the past five minutes, created a spectacular skyline that owes much to Oz and its futuristic Emerald City.

Dubai’s Media City, Internet City, Knowledge City and multiplicity of “palm” islands, are just the tangible manifestation for using today’s oil income to invest in entrepreneurial-led businesses and in the process create another Hong Kong or Singapore.

In terms of media, it’s working. Abdul Hamid Juma is CEO of Dubai Media City (DMC), an impressive real-estate park near the Arabian Sea. He says the first stage of the vision was the Internet.

“But it soon became obvious that media generally was always going to be more important than the Internet. We have had a lot of (media-based) applications, and some of them have been very successful in just a year or two. Others have had to change their business model dramatically in order to stay in business.”

Juma’s main focus is television. “We have not built studios, for example. Other media centers have followed this route, and some of our clients have built their own broadcast facilities like MBC and now Showtime.

“But look at the problem we had: To build a studio might have cost $10 (million) or $20 million, and if (we) — as the government — had built such a studio complex, then we might have ended up competing with the very people we wanted to attract. We want those studios, of course, but it is right that the broadcaster should design and build his own facilities.”

Pay TV operator Showtime, part-owned by Viacom, is a case in point. Its new 50-plus channel facility sits alongside Taj TV’s 10 Sports channel, and a few yards from MBC’s massive four-channel complex, itself adjacent to CNBC Arabiya and a dozen other broadcasters. Helping deliver these channels to a mass market of at least 10 million homes is NileSat’s pair of satellites.

NileSat’s CEO, Salah Hamza, describes what’s happening at Dubai as nothing short of a fever: “We have big changes in the region, from ease of regulation, which allows private TV to blossom, and a fever from investors. New investors who have never before been involved in TV are making themselves known.”

Hamza says relaxed telephone regulations now enable text-based channels to operate profitably. “The Saudi government, perhaps the most conservative in the region, now allows texting out of the country. This was a major boost to business,” he says.

He adds that music channels are currently the flavor of the month. “There are now 12 of them, and all depend on SMS and other interactive applications. I can tell you that all of them are making very good money. The new model is private TV, and what we are seeing is new ideas coming to us with fresh interactive ideas and fresh ideas to make money.”

NileSat is planning for extra capacity to be available by the end of 2005, boosting the number of channels from today’s 240 to potentially around 400. But Hamza says HDTV is beginning to figure in some clients’ plans because of the growth in giant plasma flat screens.

“The drivers in HDTV will be sport, and new and restored films,” he says. “With new or restored movies, plus HD, then film will look so good again.”

Hamza concludes: “Look at the changes over the past 10 years. Ten years ago most Arab countries had just one or at most two public channels. Now they have access to more than 200. There are plenty of unfilled niches. We started a real estate channel with one client. Now we have three. We started one travel and tourism channel. We have three today. Investment is coming from everywhere, with the technological ideas coming from Dubai and Cairo.”