Radio tunes to drive-time success

Radio may date back to the 19th century, but car-loving UAE consumers are moving with the times, with almost a third listening to the top stations online.

DJ Simon Smedley, also known as Catboy, a DJ for Dubai 92. Dubai 92 is part of the Arabian Radio Network. Nicole Hill / The National.

If you drive a car, you probably listen to radio.

The commuter and shopping run has helped stations such as the Arabian Radio Network(ARN) to pull in 1.6 million listeners and expand during the economic downturn.

Dialing it in Radio networks in the UAE

Arabian Radio Network Advertising share of top 10 stations: 42%. Five of the UAE's top radio stations by advertising revenue are operated by the Arabian Radio Network, according to the data provider Ipsos MediaCT. The Dubai-based network runs stations including Virgin Radio, Al Arabiya and Dubai Eye.

Channel 4 Radio Network Advertising share: 28%. Channel 4 Radio Network is the only private company to rank in the top 10 radio stations in the UAE by advertising revenue. Its stations include Channel 4 FM, Radio 4FM and Al Rabia FM.

Abu Dhabi Radio Network Advertising share: 24%. The network operates Emarat FM, which is the most lucrative of all radio stations in the Emirates, according to Ipsos. Abu Dhabi Radio Network has four other stations, including Star FM and Abu Dhabi Classic FM.

"We like to call it a perfect storm," says Steve Smith, the chief operating officer of ARN, which is part of the Arab Media Group.

"Sheikh Zayed Road is never empty. And for radio this is a beautiful market."

Almost a third of radio listeners in the UAE tune in to its stations via the internet or mobile applications, according to the network, which operates eight stations, including Virgin Radio 104.4, Dubai Eye and Dubai 92.

Yesterday it launched a Farsi-language channel as the biggest radio network in the Emirates continues to grow.

So, what does the future hold for radio here?

The National asked three executives at ARN - Mohamed Almulla, the chief executive of Arab Media Group, Mahmoud Al Rasheed, the general manager of ARN, and Mr Smith - to give their views.

ARN is 10 years old this year. How does it plan to grow?

Mr Almulla: We have an appetite for a ninth station, as long as we are sure it is commercially sustainable and unique to the audience. Those are the major two conditions that we are always considering.

Your radio stations are available via the internet and mobile apps. How successful has that been?

Mr Smith: We have about 1.6 million listeners every week, and 500,000 are actually listening online. On average, they listen for around 42 minutes - and that's a really good stat. This market is obsessed with the smartphone and we see that as a real opportunity. It helps people access us wherever they want.

So almost a third of your audience listens online. Is that reflected in the proportion of advertising revenue from digital?

Mr Almulla: Looking at these digital platforms, if I knew the answer on how to make that amount of money, I would be the next Bill Gates. I think we are all struggling to find ways for digital platforms to be commercially viable as stand-alone media.

How big a threat are online music services such as Last.fm to traditional broadcasters?

Mr Almulla: Radio is not about the songs you are playing. It is what is being played between the songs. The beauty of radio is the local touch and local feel because everyone has access to the same songs.

In the UAE, radio accounted for 4 per cent of the total advertising market, which was worth at least US$300 million (Dh1.1 billion) in the first half of this year, up from 2 per cent last year. Do you see that trend continuing?

Mr Almulla: Print and TV has always been a priority in this market. Now I think radio has been able to take some of that revenue back again, so the percentage is increasing. Since the recession hit the market, we have seen radio's [share] increase.

Why did radio buck the trend during the downturn?

Mr Al Rasheed: New businesses came to us when the recession hit the market. I think the recession was an education to the market about radio. It was an ideal solution for companies who reduced their marketing budget.

Mr Almulla: For advertisers, radio is cost-effective. It's US$100 per advertising spot - that's the average overall.

Will radio always be a poor relation to TV and print media in terms of advertising revenues?

Mr Almulla: The advertising spend on those mediums will, of course, be higher, to balance out the investment made on programming. From a business point of view, I look at it from a profitability model, rather than the amount itself.

What about the other form of digital radio such as digital audio broadcasting. That has still to take off in the UAE, which still broadcasts analogue radio signals. Why is that?

Mr Al Rasheed: I think it will take time. Already it has happened in Europe, but in some countries they are still using analogue. To go to digital you need to change everything. You need to change your mobile phones, you need to change the receiver in your cars. It's a huge change.

There is a big car culture here. How does that translate to radio listeners?

Mr Al Rasheed: Eighty per cent of our listeners are car drivers. People in Europe are used to public transport, but in the UAE, even a student going to university has a car. That is the lifestyle here, and it increases listener figures.

What kind of relationship do people have with radio compared with other media?

Mr Al Rasheed: Radio [touches] people more than any other media. No one is watching the TV during the day. Radio is with people all the time.