At a time when business, advertising revenues and consumer spending are declining in a recession-hit world, the Middle East media sector is growing faster than the general economy, says a recent A T Kearney study.

The pan-Arab media industry is growing faster than the economy in general, at average about 19 per cent per year in the last year compared to three to four per cent in Europe and the US, according to recent research.

The region’s growth is driven by a growing young and wealthy population base, alongside a currently underdeveloped media industry with limited foreign direct investment and limited presence of major international media players.

The appeal of the sector to investors is expected to continue to grow as Middle Eastern consumers spend more disposable income on media and entertainment. While the industry is investing in talent development, support entrepreneurship, ease regulations and reduce the barriers to entry.

“The reduction of regulatory barriers is a major supporting factor as Middle East governments are moving their economies away from the economic volatility of dependence on natural resources and toward more knowledge-based economies, and media is being targeted as a priority sector,” said Dr Dirk Buchta, partner and managing director, A T Kearney Middle East.

“The media industry is a great opportunity for the region to diversify economies and stimulate entrepreneurship leading to small and medium sized companies providing local job opportunities... and long term sustainability and stability for the entire region,” he added.

Traditionally Mena media centers were placed in Egypt, Jordan and Lebanon as places with the required talent base, more liberal environments and an interface with western culture and values.

However, as the trend of government investment spreads more widely across the region, “media cities” are being created in new locations spread around the Gulf.

Several complementary media hubs are likely to emerge in the region, such as King Abdullah Economic City Media cluster, Dubai Media City, twofour54 (Abu Dhabi Media Zone) and potentially more in other countries such as Qatar and Bahrain.

Global media leaders, including the BBC and Thomson Reuters, are joining established regional names such as Al Jazeera, Dubai Media Incorporated, MBC and ART to form a burgeoning industry.

“The pan-Arab media and entertainment industry has grown faster than that of any other region,” continued Dr Buchta.

“Estimated at around $10 billion in 2007, the industry still has tremendous potential for growth and looks very promising.”

While the global media and entertainment industry is facing a multitude of challenges—decreasing readership, dropping revenues, online threats— the Middle East is offering many glimmers of hope for local, regional and global players across the media spectrum.

The important steps are to understand the consumers and establish a local presence; to think across the value chain; to collaborate where necessary; and to measure success properly.

The favorable demographics and the top-down structural changes across the Middle East media sector have put it in position for continued, accelerating and attractive growth. – TradeArabia News Service