Source: Kim Badawi/Getty Images[/caption]
Love of newspapers has a long history in the Middle East, where news publications first began appearing in the early nineteenth century, sometimes as government gazettes for publicizing official business. That was the purpose of, for example, Egyptian Affairs, a gazette launched in 1828 by Muhammad Ali of Egypt. Privately produced publications began appearing in Baghdad, Cairo, Beirut, and other Arab cities around the same period. Al-Ahram, still a leading Egyptian paper, was founded in 1875. Saudi Arabia was a pioneer in the Gulf region’s newspaper business, with papers like Al-Madina and Al-Bilad opening in the 1930s. Rising oil revenues in the 1970s led to an expansion of the Kingdom’s print media and today it has around a dozen national newspapers. In addition, Saudis own two of the leading pan-Arab papers, both headquartered in London, Asharq Al-Awsat and Al-Hayat.
Today there are almost two hundred newspapers in the Arab world, the vast majority of them published in Arabic; about a quarter are French or English language papers. According to the Arab Media Outlook 2011–2015, published earlier this year by the Dubai Press Club and Deloitte & Touche, total circulation of newspapers in the Arab region in 2012 is 12.8 million. Newspapers will take in around USD1.7 billion in advertising revenue this year, out of total advertising expenditure in the Arab world of around USD4.7 billion. The number of Facebook users in the Arab world has tripled in the last two years and as of June 2012 stands at 45.2 million, according to the Arab Social Media Report published by the Dubai School of Government’ s Governance and Innovation Program.
Unlike their Western counterparts, most Arab newspapers and many magazines are still performing relatively well. Advertising revenue has declined in recent years, but not yet enough to generate a crisis. News consumers in the Middle East still love to hold their newspaper, rustling its pages as they sip their coffee. Glossy women’s magazines remain top sellers at newsstands. Until now, the digital revolution has not presented print publications with competition in online content that is serious enough to disturb editors’ sleep. But the future is quite a different story.
The coming storm
The first thing Mamoon Sbeih does when he arrives at his Dubai office every morning “is read five or six newspapers.” The Arab region manager for APCO Worldwide, a global public relations and communications consultancy firm, adds, “I like the green color of Asharq Alawsat.” In contrast, APCO’s newly hired young employees “never read newspapers,” observed the 43-year-old executive. "They follow journalists on Twitter,” and as a result, “they’re ahead of us because news in the newspaper is a day too late.”
Sbeih added, “[I’m] working very hard to develop my online skills and . . . I’m going to start tweeting because you know what? We’ve started thinking in short sentences . . . and I know that if I don’t get on board with that, I’ll be left alone.”
Like many other media experts in the Middle East, Sbeih sees a rocky future for Arab newspapers: “Print media in the Arab world is not going to die soon,” he said, “but I can tell you it’s going to die quickly when the time comes. Once the young generation of today grows up and [becomes] a majority, they’re going to leave print newspapers behind.”
Print journalism in the Arab world is not immune to the digital revolution, and although it is affecting publications in the Middle East more slowly than in the West, it has already begun to transform news-gathering and delivery, according to interviews with Arab editors and media consultants.
It is not yet entirely clear how this will affect the current advertising-dependent business model of Arab print journalism and media. But what is certain, these experts say, is that if publications want to weather the coming storm they must start to experiment with new digital content, new ways of reaching readers and new revenue streams. “The future is definitely digital; however, it will probably take more time [to arrive] in the Middle East than it took in other parts of the world,” said Jayant Bhargava of Booz & Company in an interview.
A 2011 Booz report that Bhargava helped write, The Advent of Digital News in the GCC, talks about “the creeping digital threat” to the region’s print media. In a poll of more than five hundred news consumers in Saudi Arabia and the United Arab Emirates, Booz found that 76 percent already had reduced or stopped reading print newspapers and instead were getting their news online. Given this “alarming” finding, the report warned, traditional media “must prepare for the inevitable or risk losing share of their existing revenues.” It added that this will be no easy feat, given “that the digital landscape is still evolving and that the right business model has yet to be fully defined.”
“[Media organizations] are not sleeping. They see the dangers of the coming days,” said Mohammad Alfal, deputy editor-in-chief of Jeddah-based Okaz, which is Saudi Arabia’s most-read newspaper and has a daily circulation of 150,000. Alfal noted that “electronic media” gets little attention from Saudi advertisers, who still prefer to spend most of their money in newspapers and television. He added, “I think these attitudes will be changed soon. It will not continue like that.”
Digital advertising growing at expense of print
According to the Arab Media Outlook Report, television received the largest share of advertising money spent in 2011, at 40 percent. Newspapers were close behind, garnering 37 percent. The significant point, however, is that newspapers’ share of the region’s advertising revenue has been declining since 2007 (in 2009 it was 39 percent) and is projected to continue shrinking—to 31 percent by 2015. Newspaper circulation growth has also been slowing and recorded its smallest increase in 2011. “The number of newspaper titles has remained relatively flat despite the flurry of activity generated by new launches, shutdowns and continued migration to online,” the report said.
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Arabic and English-language newspapers in Dubai. Source: MARWAN NAAMANI/AFP/Getty Images[/caption]
Meanwhile, digital received a meager 4 percent of advertising revenue in 2011—but its future is bright. According to the Outlook, digital media are “the fastest growing platform in the region” and its share of advertising money is expected to increase to 10 percent by 2015—an increase that will be “at the expense of print.” By comparison, the digital share of advertising expenditures in 2011 was 32.3 percent in the United Kingdom and 16.8 percent in the United States, according to the Outlook.
The reasons why the so-called “digital platform” will increasingly grab more advertising revenue are fairly obvious. First, the Middle East is a youthful region, with 53 percent of its population below the age of twenty-five. Young people are comfortable socializing and getting their news online.
Second, broadband capabilities are expanding everywhere in the region, offering faster, more reliable, and cheaper connectivity to the Internet for more and more people. Web-enabled mobile devices are also proliferating. Overall, smartphone penetration in the region is around 18 percent, the Outlook noted. In some countries it is significantly higher: 67.6 percent in Saudi Arabia, and 28 percent in Egypt.
As for magazines, their share of advertising revenue is also declining (from 6 percent in 2009 to 5 percent in 2011), but those targeting specific audiences are enjoying more stability than newspapers “with new titles emerging in the lifestyle and women’s genres,” the Outlook stated. The “print magazine format still holds significant appeal for advertisers in the region,” it added.
Not yet in crisis, newspapers have some breathing room
The decline in newspapers’ advertising revenue has been, and may continue to be, less precipitous than in other parts of the world for several reasons. For one, says Bhargava, newspapers in the region profit from Arab television’s unusual profile. Despite more than five hundred free channels, a handful of pan-Arab brands dominate the market, such as Middle East Broadcasting (MBC) and Rotana. These large, pan-Arab stations attract the lion’s share of both audiences and advertising revenue. National television stations, mostly state-run, have far fewer viewers.
Thus when large national advertisers, such as banks and telecom companies, want to run national ad campaigns (rather than pan-Arab ones), they turn to newspapers. This has led to an anomalous situation, Bhargava added, where in some Arab countries “you would have over 60 percent of (advertising) expenditure at the national level going to print media, which is not seen in any part of the world. Typically, you would have television and newspapers pretty much head-on with how much share they get from advertisers in a country.”
The region’s strong newspaper culture is another reason why advertisers favor print media. “You still have people who like to hold a newspaper and buy it,” explains Magda Abu-Fadil, director of Beirut-based Media Unlimited, which trains journalists.
“You know, in the West, everybody starts their day by looking at their laptops and searching for news. This is still not the habit in the Middle East,” says Sana Nafia of the London-based Al Khaleejiah Advertising and Public Relations Company. Advertisers know that adults with purchasing power still read print editions of newspapers, she added.
Despite growing broadband capabilities, many people still do not have easy, fast access to the Internet. As Fadi Salem, director of the Governance and Innovation program at the Dubai School of Government, notes, “There is still a future for the traditional and print media given that people connected to the Internet are not the majority yet.”
This is the case in Egypt, where broadband penetration is much lower than in the Gulf: people will continue to read print media for some time to come. Even young people still read newspapers regularly, usually when in transit to work or home, said Khaled Omar, a journalist at Al-Masry Al-Youm, Egypt’s largest daily (circulation 250,000). “They are very interested in politics and can’t [get] a good amount from the Internet,” he said.
Media ownership patterns matter too
Another reason many Arab print publications are not yet faltering as much as their Western peers, some analysts said, is because many are financially backed by governments or wealthy, politically-connected groups and individuals, so they have a cushion against advertising revenue slides.
This factor is relevant to how print media’s business models will evolve, said Jad Melki, director of American University of Beirut’s media studies program. “It’s important to emphasize that in general the business model in the Arab world and in Lebanon has been [that] the money that is coming to support these newspapers is not mainly from advertising,” Melki said. “The big money is actually political money . . . coming straight from the government and in some cases it’s money coming indirectly from the government through advertising for example, or through political groups . . . This business model has been around a long time.”
Whether this business model will prevent print media companies from adopting new strategies for the digital age is an open question. Bhargava noted that media companies that exist exclusively on commercial revenue and have no subsidies “are the ones progressing on digital much faster.” But Deloitte partner Santino Saguto, who helped produce the Arab Media Outlook, said government ownership would not necessarily slow the transition. He cited government initiatives in the Gulf such as media cities and free zones, which are intended to encourage digital expansion.
In any event, says Julien Hawari, co-CEO of Mediaquest in Dubai, ownership is secondary to the larger revolution that is at the heart of the contemporary challenges newspapers face. Government subsidies “might buy them more time, but at the end of the day . . . you are reporting the news of yesterday . . . No one wants to read that.” He concluded that “either you completely change the model [of newspapers] to stay relevant to the audience or you’re going to face . . . extinction.”
Hawari’s observation addresses the key test facing print journalism: competition from a variety of new sources on the Internet. There are, for example, online newspapers such as Sabq and Elaph, bloggers, social media sites like Facebook, and search engines like Yahoo and Google, as well as continually updated websites with live video streaming of international television channels such as Al-Jazeera, CNN, BBC, and Al-Arabiya—not to forget the most unexpected upstart: Twitter. “No news agency can go faster than Twitter,” said Hawari.
The trick for print media is not just to distinguish themselves from all this competition, but also to partner with these new forms of information transfer in ways that create revenue-generating business models. As the Arab Media Outlook Report stated, “Sites like Twitter have so far been considered both a threat and an opportunity for professional news organisations.” Social media can offer “a platform to drive traffic to news websites on one hand but [is] distracting eyeballs from professional sites on the other. However, news organisations which are able to use sites like Twitter smartly will no doubt be the ones to benefit from the opportunities it presents in the long-term.”
Problems and challenges in moving to digital
In addition to strengthening their brand identity and creating strategic symbiotic coalitions, print news publications also have to develop compelling online content— something so far lacking, according to most media experts; many newspapers have websites, but their content is not innovative, exciting, or attractive enough. The online experience must offer much more than the print version of a publication: it needs to be interactive and multimedia, as well as have applications and services for readers.
News websites also have to offer advertisers more creative options and opportunities than they do now, said Arnaud Verchere, founder of Tonic International, an advertising and marketing firm in Dubai. “We’re actually struggling to sell online advertising,” Verchere said, partly because a lot of advertising on newspaper websites is just words scrawled across the page. “It’s just noise or wallpaper; it really doesn’t do anything very interesting,” he explained. Online ads work best when they are “more like films or animations,” he added, but this is often not possible because of a website’s technical limitations; either its Internet bandwidth is not that strong or its software does not support video.
In addition to technical deficiencies, another drawback that has been hindering development of compelling digital content is the lack of local talent, many experts said. “You find that there isn’t the wealth of digitally knowledgeable and conversant talent that you would have in the Western world,” said Kamal Dimachkie, executive regional managing director of advertising firm Leo Burnett in Dubai. Another advertising executive said he was dumbstruck when a client, who handles marketing for a major brand name, asked him if he had Youtube on his computer.
The search for new business models
In order to sustain their journalistic mission into the future, Arab newspapers and news magazines “need to think hard about what they can offer in addition to content if they are to convince users to pay,” Bhargava and his Booz & Company colleagues wrote in their 2011 report on digital news. “This is not a quick and easy decision,” they added. “It will require true product innovation in the digital world and new pricing models that few publishers have yet imagined.”
Successful money-generating business models for digital content remain elusive, in part because Middle Easterners—like people everywhere—resist paying for online content. Of more than five hundred Saudis and Emiratis polled by Booz, 74 percent voiced reluctance to pay for such content.
Mapping Digital Media: Lebanon, a 2012 study of the Open Society Foundations that AUB’s Melki helped write, found that Lebanese “media owners know it is only a matter of time before the traditional business model becomes obsolete.” As a result, they are looking at new strategies for revenue generation. In fact, Lebanon is set to shortly see two new experiments in digital journalism.
Now Lebanon is an English-language news site that began online in 2007 with no advertising. It was financed first by political interests—backers of the March 14 coalition, and later by private business interests, according to its editor-in-chief, Hanin Ghaddar. Despite its popularity with readers, however, it has never made a profit. A new strategy was needed, and after months of preparation, the site recently unveiled its new self. It features a new design and direction, expanded content, and an online partner in the form of a commercial entity selling digital content, Ghaddar said. The intent, she added, is that the commercial partner will produce enough revenue to support the journalistic work of Now Lebanon , which was renamed “Now.”
Journalist Samer Husseini said he will launch a new kind of news website sometime early in 2013 that not only embraces citizen journalism, it also rewards it. Called Yakshof (Reveals), the site will post reports about current events from people registered as contributors to the site. “It’s like Twitter, where everyone can have his own profile as an ‘ireporter’ and can get points” every time a post is viewed, commented on, or shared, Husseini said. Eventually, regular contributors found to be consistently accurate will be given cash for their earned points.
The idea, said Husseini, is “having constant news coming in from different [locations], from different people and different views . . . It’s a new thing happening in the Arabic language. We will see where we go from there.” And his business model? Eventually, it will be based on advertising, but until the site gets on its feet they “might have some entrepreneurs coming in investing in the website—based of course on the condition that there won’t be any bias or censorship,” Husseini said.
Elsewhere in the region, Zawya has pioneered a hybrid model called ‘freemium.’ The online business news site, which Reuters bought earlier this year, offers readers some information for free. If they want deeper or more exclusive information, they must pay for it. Then there is Dubizzle, a sort of Craigslist that offers space for free online classified ads, once a staple revenue stream for print newspapers.
Imagining the future
So what does the future hold for Arab print journalism, apart from mind-boggling competition and imperatives to be highly creative and flexible? Ten years from now, Bhargava said, he expects to see fewer newspapers. “I would definitely see the dominant, the mainstream newspapers still existing in print form but much more active on the digital space, and the multi-platform experience of users will be far richer than what exists today. I’m sure I would see a lot of citizen journalism,” which will become “if not a competitor . . . a coexisting form with professional journalism.” Magazines also will be fewer and those that survive will cater to specialized audiences.
Leo Burnett’s Dimachkie said future success for print media means being available on mobile devices. “You’ve got to be there,” he said, adding that “the standard of excellence” for viewing digital content today is not how it looks on a laptop, but how it looks on tablets like the iPad. As for the business model of the future, Dimachkie said, that will depend on several factors, including the global economy, the rate of proliferation of mobile devices, the cost of Internet connectivity, and the levels of poverty in many Arab countries. “All of these have bearing on what will happen to the printed media,” he said. “Will it continue shrinking? Absolutely, yes. The only big question is at what rate.”
