Recession got worse for UAE media in 2010, what about 2011?

Figures from the Pan Arab Research Centre confirmed what everybody in the UAE media already knows: that things got worse and not better in 2010 with a further 2.7 per cent fall in total advertising revenues on top of the near depression in 2009 when real estate ad spending collapsed.

Yet there was a regional recovery. Total GCC and pan-Arab region spending rose 25 per cent with gains of 7.7 to 37 per cent in other GCC markets. Confirmation, if any was needed, that the worst of the global financial downturn was experienced in the UAE.

TV worst hit

This year newspaper, radio and TV advertising in the UAE fell by 4.4 per cent, five per cent and 18.3 per cent, according to PARC, and accounted for the bulk of the declining revenues. Digital media spending remains low in the region, although it is growing against a falling trend.

Advertising tracker Ipsos MediaCT estimates a three per cent total market share for online compared with 30 per cent for newspapers in the region. But the increasing penetration of Broadband and the growing popularity of mobile Internet devices points to a much brighter future online, particularly in the UAE where Internet penetration is high.

For UAE the writing would seem to be on the wall for local TV stations whose amateurish and state-controlled content just is not sufficient to capture viewers who can turn to a global media alternative with the click of a button. Radio remains popular and profitable in certain niches with its much lower overheads.

Magazines close

Among the print media it is hard to believe that the magazine sector is not suffering more than newspapers. So many titles have closed over the past year. Advertisers in the recession have finally seen through the old business model of charging high rates for advertising and actually printing far fewer copies than claimed by publishers.

But newspapers are also clearly struggling with their high fixed costs and many must be losing money. Globally the Internet has got them on the run, and it is not really any different in the UAE. Newspapers here cannot give copies away. They lie in heaps at points of free distribution in clubs and bars.

Why is that? Could it be because everybody now likes to read the day’s news on the day it happens on the Internet? Reselling old news printed on dead trees is a dying business model. Advertisers in the UAE will one day wake up and realize it is no different here, and indeed that is why digital is the one area of UAE advertising guaranteed to grow in 2011.