Regional TV ad revenue years away from growth

Advertising revenues in the Arab region could take three years to grow, according to the head of the one of the region's most prominent news channels.

Mohammed Burhan of CNBC Arabia says the advertising market in the region may decline. Jaime Puebla / The National

Advertising revenue in the Arab world could take three years to grow, according to the head of one of the region's most prominent news channels.

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The total advertising market for the region amounts to less than US$5 billion (Dh18.36bn) a year - representing one of the lowest per-capita marketing budgets in the world.

Zero growth, or even a decline, is likely over the next three years, said Mohammed Burhan, the general manager and acting chief executive at CNBC Arabia.

"For the coming three years, the advertisement cake will not get bigger," Mr Burhan said. "If it will not be the same, it will be reduced. The best hope is to be the same."

CNBC Arabia is the region's only major 24-hour business-focused station in an overall news TV market dominated by Al Jazeera, based in Qatar, and Al Arabiya, which is broadcast from Dubai.

The already competitive market is set to be shaken up next year with the launch of two high-profile Arabic-language news stations.

Sky News Arabia is expected to launch in the spring, and Alarab, backed by the Saudi billionaire Prince Al Waleed bin Talal, is set to follow in December.

The new stations will fight for their share of a total TV advertising budget that is divided between more than 500 free-to-air channels.

According to the Arab Media Outlook 2009-2013, just $22 per capita is spent on advertising in the Arab region, compared with $462 per capita in North America and $273 in western Europe.

Mr Burhan said he did not expect the arrival of two new stations to expand the overall advertising market.

"The advertisement cake is already eaten - and eaten heavily in the region. So how they will compete is their matter," Mr Burhan said. "Al Jazeera, Al Arabiya and CNBC on the business side already filled the market. You have big fish in the Arab region. And already the market is filled."

Running a TV news station is notoriously expensive. The Qatari government reportedly pumps hundreds of millions of dollars into Al Jazeera every year.

Yet one of the newcomers to the Arabic TV news market hopes to become profitable by 2017. Jamal Khashoggi, the manager of Alarab, told The National last month that he hoped the channel would be profitable within five years.

CNBC Arabia was launched in 2003. The Arabic-language station is based in Dubai and claims a staff of more than 140. Mr Burhan said advertising revenue across the entire Arab region was hit hard by the economic downturn. Yet he said viewership of CNBC Arabia increased at the time because of greater demand for business news. And he believes the global economic outlook remains gloomy.

"Still we are in the middle of the crisis," he said. "We get used to that feeling, so we are not panicking. But at the end of the day, the world is still in the crisis."