The Press Market in the United Arab Emirates

In 2005 the UAE experienced a 6.7% growth in GDP, with Dubai registering a growth of almost 16% placing it among the fastest growing cities in the world. With an estimated population close to 5 million, it is expected to grow to 8 million by 2010, with most of the growth taking place in Dubai. 5 million tourists visited in 2005, a target of 10 million has been set for 2010. Historically the market share of domestically published English language daily newspapers has been split between Gulf News(Al-Nisr Publishing, founded in 1971, estimated circulation 99.856) and Khaleej Times (Galadari Printing, ABC 2004: 66.787).2005 saw the high-profile launch of Emirates Todayand its Arabic counterpart Al Emarat Al Youmby Arab Media Group both are tabloid format dailies. Three Arabic language dailies, Al Khaleej, Al Bayanand the state-owned Al Ittihadclaim a circulation in excess of 90.000. A total of 13 newspapers are published daily. In the year 2000 Dubai Media City, a free-zone that allows 100% foreign ownership (previously limited to 49%) of media related businesses, including publishing, opened its doors. What had prior to this been a fairly sedate domestic publishing industry suddenly witnessed a dramatic increase in the number of publishers and publications. Presently, over 75 publishers put out in excess of 250 consumer and trade publications mainly in English and Arabic, but there are burgeoning sectors in Russian, Persian and Malayalam language titles. The market is dominated by two major publishers, Motivate and ITP both of whom have a portfolio that contains home-grown titles and those published under license from international publishers, with ITP having the edge in trade publications and Motivate in contract publishing. The international press is well represented in the UAE, with the majority being English language titles imported from the UK and USA that feeds not only the traditional base of British expatriates, but a growing number of South Africans and Australians. French language titles also enjoy a strong readership, followed by German and Russian. Italian and Spanish titles also have a presence. Categories that show strong sales include weekly news & business, celebrity & lifestyle, women’s interest, automotive and men’s magazines. Previously stringent government restrictions on both editorial content in domestic titles and editorial/pictorial content in international titles are becoming increasingly more relaxed and liberal. Out-right criticism of the country’s rulers and government is still suppressed though debate on certain issues is being encouraged. Nudity is prohibited in domestic publications and must be censored, blacked-out by markers or pages torn out, in imported international titles. Every publication, whether imported or domestically published must be registered with the Ministry of Information and Culture. While both Gulf Newsand Khaleej Timeshave built up a substantial subscription base, the UAE remains essentially a retail driven market, particularly for consumer magazines; a sector in which subscriptions generally account for less than 10% of the circulation. A peculiarity of the market is that, to date, there exists no substantial public transport infrastructure, nor is the extreme desert climate pedestrian friendly. As a result there is a lack of specialty press retailers like newsagents and kiosks. Therefore press retailing developed in channels where it is convenient for customers, such as supermarkets, hypermarkets and to a lesser extent petrol stations, hotels and specialty bookshops. There are two importers and distributors of international press, Dar Al Hikma, based in Dubai handling Arabic, US & European titles and Jashanmal, with a country-wide pres- ence dealing with all English and other European language titles. Both also distribute domestically published titles, along with Emirates Printing, Publishing & Distribution who specialize in Arabic titles. Newspaper publishers generally handle their own distribution and most offer third party distribution services for local and regionally based publishers. Though no independent wholesalers exist, Jashanmal has developed itself into a wholesaler through category management agreements with the country’s leading press retailers which includes Spinneys, a home-grown supermarket chain with 16 stores and the international hypermarket chain Carrefour who recently opened their 10th store. Combined, the two chains account for over 30% of all newstrade sales of consumer magazines. Travel retail, especially the book- shop and departure gate shops operated by Dubai Duty Free, represents a substantial channel, particularly for international press. Dubai airport was the 11th busiest airport in 2005 and Dubai Duty Free registered the 3rd highest turnover for Duty Free retailers worldwide with sales of over $600 million. Generally the penetration of barcode scanning on the retail level is poor and where it does exist it has traditionally been on a price-point barcode generated by the retailer. How- ever, 2006 has seen Jashanmal working with several major retailers and adopting publisher’s barcodes allowing for improved management of the supply chain. The small number of distributors and wholesalers means that retail prices tend to be uniform across all channels with the exception of hotel bookshops where the retailer often marks up the price. With the recent explosion in new magazine titles, many publishers of consumer titles adopt a distribution strategy that heavily favors controlled free distribution. A number of factors contribute to this, including a lack of available newsstand space to accommodate the increasing number of titles, few specialty press retailers and the fact that there has been no pressure from advertisers on publishers to present audited circulation figures. Circulation auditing is not yet particularly well understood in the region, particularly among advertisers and as such its adoption has been slow. To date only two major consumer magazines have been audited, though several more have applied and a steering committee has been formed by the local chapter of the Internation- al Advertising Association to further this. For the time being though, without advertiser pressure, in a go-go market awash with liquidity and advertising Dollars many independent titles continue to launch and manage to stay afloat. It is worth noting the 2004 launch of 7Days, a Metro-style complimentary daily paper, operating on a model driven by advertising revenue, which has achieved a high-level of penetration into the market by aiming for maximum availability. It is delivered to homes, lobbies of apartments, petrol stations and office receptions. 7Dayssuccess can be attributed to the combination of editorial content (that people want to read) and appropriate distribution strategy. In 2005 7Days registered a BPA audited circulation of 64.276. Though the domestic publishing industry is still in its infancy (the oldest publishers were formed in the 1970s) it is maturing rapidly and the international press will start to face local competition, particularly in the form of price pressure, with more home-grown titles coming into their own and from increased license publishing arrangements between domestic and international publishers. HELLO! (Motivate & Hello), Car (ITP & Emap) and OK! (CPI under license from Northern & Shell) are among some of the most recent high- profile titles to launch Middle Eastern editions successfully. Newsweek (Dar Al Wattan, Kuwait) and Forbes (DIT Publishing) both have regionally published Arabic editions. DIT Publishing also publishes a Middle Eastern edition of PC Magazinein both English and Arabic. The Asian edition of The Financial Timesis printed locally by Al Nisr Publishing. Emap maintains a Dubai office for its publication Middle East Economic Digest. It remains to be seen whether or not the long-term economies of scale truly exist to support such a breadth and volume of consumer publications. However, demand is high for trade publications, from all the regional headquarters of international firms. But they do not face the pressure of competing directly with each other on the newsstand, but rather their fate will be determined by the strength of their sales teams and the ability of distributors and subscription fulfillment agents to successfully deliver the subscribers their copies. The latter has been a real, but probably short-term, challenge in this market. For the time being new titles will continue to launch and newsstand space will become scarcer and therefore will have to be better managed by both the wholesalers and retailers. Specialty retail channels for press and related products, presently in their early stages, will also develop rapidly making the products increasingly available to consumers. The short term issues facing adequate subscription deliveries are likely to be sorted out soon. All told, it is a time of rapid growth for the country, during which the regional future for this industry will be shaped. It is a time for investment and optimism.

Author: Narain Jashanmal, Jashanmal Newspapers & Magazines