Dubai: News channels in the Arab world have mushroomed in the last two decades. Newscasts on state-controlled television channels before then often featured dry updates of cables of greetings exchanged by rulers to decrees and edicts issued by them.
The monopoly was broken with the groundbreaking arrival of pan-Arab news channels in the 1990s that today offer their viewers a vibrant range of views and opinions that are broadcast from around the globe.
Despite the diversity of opinions presented, all pan-Arabic news channels today continue to be controlled to a varying degree by Arab and non-Arab states or individuals closely associated with the ruling families.
However, the region's news sector is set to be tested again with the arrival of two news channels that are largely expected to be commercial, profit-seeking ventures, a first of their kind in news.
Sky News and the Fox News channel, both owned partly by Rupert Murdoch's Newscorp, have revealed plans to start Arabic language channels.
Like their English counterparts, observers expect the Arabic channels to be commercial ventures seeking advertisements by attracting large audiences.
"Welcome to the club. Welcome to the money losing business," Mazen Hayek, spokesperson for Al Arabiya and the Saudi owned MBC Group, tells Sky and Fox.
Losing business
It is no secret that news channels in the Middle East are a losing business. Many would prefer not to even call them a business. Their managers do not hide the fact that the channels are not commercially driven or commercially viable.
Salah Negm, a regional media veteran and director of news at Al Jazeera English told Gulf News recently that the region's news channels did not consider their returns in terms of revenue, "but viewers".
The two newcomers are expected to change that.
But Hayek says that despite Al Arabiya bringing in seven times as much advertising revenue as its main competitor, referring to Al Jazeera, it is still a loss-making venture "for the simple reason that your target audience, and the advertisers' target market, are geographically limited to the MENA region, while you have to operate in five continents".
The US pours over $60 million into its Arabic channel Al Hurra annually despite not showing any advertisements and has failed to win a sizable audience.
Even Al Arabiya, the number two channel on a pan-Arab level, is kept afloat thanks to its parent network, MBC, under which fall some of the most popular and profitable entertainment, movie and children's channels.
Faisal Abbas, a blogger for Huffington Post and former media editor for the London-based daily Asharq Al Awsat, says that Sky News' arrival in the Arabic news channel market will be watched closely.
"Sky News would be the most interesting trial to penetrate the Arabic satellite market because it is likely to be commercial.
All other recently launched projects such as Al Hurra, BBC Arabic and France 24 were all politically, not commercially driven," he explains.
He says however that it will not take long to determine which way commercial news channels go. If they want to survive, he suggests, their content will have to cater to the audience's needs. If not, they will have to leave the market.
"It's a simple model: the channel must get high numbers of viewers to get advertising money. If it gets the money, it continues. If it doesn't, it can't last for long," he says.
Attracting advertisers however can be a challenge for news channels even if they do attract a sizable viewership.
Despite being the most widely watched news channel in the region, with a reported reach of over 40 million viewers, Al Jazeera's Arabic channel is shunned by most advertisers, leaving viewers with repetitions of commercials for companies backed by the Qatari government.
Advertiser enthusiasm
The lack of advertiser enthusiasm is likely to be based on political and not commercial reasons, observers say.
Mohammad Al Nawawy, co-author of Al Jazeera: How the Free Arab News Network Scooped the World and Changed the Middle East, has said that Saudi Arabia, which has often been at odds with the channel, has in the past pressured Saudi advertisers to boycott the news channel.
Saudi Arabia is the Gulf's biggest market, has its highest GDP, and has its second highest advertising spend, which is expected to grow by 10 per cent annually until 2013.
"If you are an American company, or even an Arab one, would you really want to be associated with a channel that had so much bad publicity? …In business it's always better to play it safe," says Abbas.
Al Arabiya's Hayek however dismisses the idea that there is a stigma attached to advertising on the region's politically polarised news channels.
"Advertisers are smart businesspeople. They reason in terms of impact and return on investment, not in terms of political affinity or editorial lines. They don't [ask] if Al Arabiya or Al Jazeera [follow] their policy.
"Honestly, blaming the political line for not having advertising is an old no-fly game," he says.
Observers say however that without a real understanding of Arab audiences, international players will continue to have difficulty entering the news sector, whether backed by governments or private players.
Wooing advertisers an uphill task
Surfing through the more than 500 Arabic television channels available in the region, one is likely to find everything from Indian actresses speaking in Arabic to Arabic-dubbed Turkish soap operas.
The globalising effect of satellite channels has in the last two decades diversified the preferences of Arab audiences, leading private players to cash in on this young, 300 million-strong market.
The potential of the television market, however, is still considered to be in its infancy in terms of advertising spending, which is now being realised by foreign television networks that have launched Arabic versions of their channels.
Mazen Hayek, spokesperson for MBC group, says that foreign newcomers lack the experience and do not have a deep knowledge of the market and its culture that traditional players have acquired.
"Perhaps this is why they are now looking for local partners to come back through them. Many have attempted to come and they failed," he says.
Joint ventures
Some of the major foreign networks that have launched Arabic channels recently have done so in collaboration with local players. MTV Arabia, for example, is a joint venture between MTV networks and the Arab Media Group (AMG).
AMG has also brought Virgin Radio and Nickelodeon Arabia to the region. Similarly, National Geographic Abu Dhabi, launched last year, is a tie-up between Abu Dhabi Media Company and the National Geographic Society.
Media expert and blogger Faisal Abbas says that this "failure" of foreign networks to penetrate the region's television sector has made traditional players complacent and arrogant.
Complacency
"This is bad because the networks can rest on their laurels and keep on thinking they are the best … They are good at buying rights to western shows or commissioning the dubbing of Turkish series into Arabic, but where is our own local content?"
"We [the MBC Group] bring the best available, bar none — in soaps, movies, from Hollywood to Bollywood, news and sports," says Hayek, suggesting that current networks are already fulfilling their audience's needs. He adds, however, that room could be made in the industry for more locally produced content if ad spend rises, which is likely to be what the newcomers are banking on.
Mukund Cairae, Territory Head for India-based Zee Network, concurs. He says there is "vast potential" in the market, despite the network's Zee Aflam, a Bollywood movie channel, not having made a profit since its launch in June 2008.
"The ad spend here is only $22 per capita which is way lower than elsewhere in the world with America being at $462 and Western Europe at $273," he says.
