Arab advertising market has potential to double, says Indian media mogul

The billionaire behind one of India’s largest media companies says the Arab advertising market has the potential to double by 2016.

Subhash Chandra, founder of India's Zee Entertainment, says greater competition in the market would see spending on advertising hit $10 billion by 2016.

Zee Entertainment, which is part of the Essel Group conglomerate, recently invested $100 million launching a new Arabic-language TV station called Zee Alwan. It plans to launch additional free-to-air stations over the coming years, executives said.

The total advertising market in the Arab world was worth an estimated $4.7 billion last year, according to the Arab Media Outlook, which was published in April in collaboration with the Dubai Press Club and Deloitte.

Mr Chandra acknowledged this was “small” - but is bullish on the sector's growth prospects.

“In this market, it is only two or three media groups, and perhaps only two media sales agencies that are taking 80 or 90 per cent of the advertising,” he said.

“If they allow competition, I think this market can grow many-fold... It can grow in the next three to four years to $10 billion,” Mr Chandra added.

That is far more than the forecast laid out in the Arab Media Outlook, which estimates that the total Arab advertising market will increase to just $6 billion by 2015.

However, Mr Chandra said the growth of the industry depends on more challengers emerging to existing market leaders, which include the Dubai-based TV broadcaster MBC.

Mr Chandra is ranked in Forbes magazine's list of the world's billionaires, with a net worth of $1.8 billion.

He is the chairman of the Essel Group conglomerate - which has diverse holdings ranging from Zee Entertainment and the satellite-TV service Dish TV, to infrastructure and packaging.

It was reported last week that Essel Group is seeking to raise $500 million to fund expansion and pay debt at some of its companies.

Mr Chandra confirmed that several of the group companies are seeking financing as part of their “routine” activities.

“It’s not one single transaction of $500 million. A number of different companies are doing their different jobs on a daily basis,” he said.

The company’s infrastructure arm Essel Infra last week closed financing of $300 million for a road project in southern India, Mr Chandra said. “That’s part of the $500 million,” the executive said.