UAE media faces more consolidation and closures

Having lost the Emirates 24/7 business newspaper and Freehold Monthly magazine over the summer, The Media Factory last week announced the sale of five English titles to Mediaquest in a further consolidation of the UAE media sector.

With advertising revenues still weakening this is unlikely to be the end of this process. No value was given for the Mediaquest acquisition which includes three magazines published under licence from the UK’s Haymarket Group, Autocar Middle East, F1 Racing Middle East and FourFourTwo Middle East.

Arabisation

Trends magazine publisher Mediaquest said the motorbiking titles would be translated into Arabic. Emirates 24/7 newspaper is now published as a website only.

Advertising revenues for such news portal websites have dwindled sharply since the real estate slump two years ago. There are simply too many of them to allow any one to make a profit now, with too much competition bidding advertising rates to the floor.

Magazine publishers are also suffering from an advertising revenue drought. The Media Factory told The National it was keeping its .Commerce magazine and Aileron, an inflight magazine for private jets.

But there have been many job cuts over the summer in the publishing world, particularly among the more highly paid staff. This is turning into a long recession for the UAE media.

What matters more for survival: actual readers or government finance? In the private sector it is definitely readers that are required as advertisers are scrutinizing readership claims more closely than ever, and the non-audited magazines have come under particular pressure.

The again government-owned TV and radio as well as newspapers like The National appear to have been somewhat ringfenced from reality. That may change in Dubai first as state-owned company budgets come under financial pressure from the need to repay loans.

Abu Dhabi different

Abu Dhabi still looks another world, although private sector firms trying its generous media free zone have found that advertising is hard to come by in the UAE capital.

There is a media shake-out in progress and the survivors will either be lean and mean advertising sales machines, preferably with some private equity support, or those protected by government indulgence. Many old business models will not stand this sort of revenue squeeze and a very different media sector will emerge fom this process of consolidation and closures.

That said the media and advertising world is cyclical and driven by the business cycle, and as the UAE economy recovers from its debt-driven boom and bust then so will its media world.