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Five years ago, the only TV available in the Middle East was controlled by conservative governments. Programming was local, cheap, poor in quality and dull. And when ad agencies inquired about media planning, media buyers were known to quip, "What planning?"

Then came the Gulf War in 1991, revolutionizing the TV industry in the region. Citizens hungry for war news installed satellite dishes and became hooked on CNN International and foreign programming.

That move spurred the explosive growth of pan-Arab satellite networks, a movement undeterred by strict censorship laws that require chameleon-like changes in global ad campaigns, observance of tight government controls and satellite dish bans.

The biggest player in the region, born of the Gulf War, is London-based Middle East Broadcasting Centre, the first to target the increasingly sophisticated Arab world with a 24-hour satellite news and entertainment channel free to satellite dish owners. But MBC's success is inspiring rivals, including the Egyptian Satellite Channel, Arab Television & Radio and Orbit Satellite TV & Radio Network.

The activity is centered around the Arab nations. While peace talks might someday move Israel into the satellite orbit, the longstanding boycott of Israeli products still stands, and none of the networks has moved into Israel yet.

"I strongly believe in MBC," said Brenda Allen, media director at Lintas Gulf, Dubai. "I sold it to clients even before it started."

Last year, advertisers spent $41.3 million with MBC, according to Dubai-based Pan Arab Research Center. "MBC brought in a fresh and more daring program presentation [compared to local networks] and still maintained the Arab culture," added Raja Sowan, regional media director, Leo Burnett, Dubai.

Multinationals, including Procter & Gamble, Unilever, Pepsi-Cola International and BMW, account for about 25% of MBC's advertisers. The network's ad rates for a 30-second spot range from $1,350 to $2,140.

Although the market leader, new rivals reduced MBC's audience share of the Saudi Arabia market to about 20% from 30%.

ESC was runner-up in Mideast satellite spending, according to the Pan-Arab Research Center, earning $16.3 million in ad revenue. ESC, a 24-hour ad-funded direct-to-home entertainment channel beamed by the state-owned Egyptian Radio and TV Union, initially was started for Egyptian troops fighting in the Gulf. It has since developed into a separate service, carrying such advertisers as appliances marketer Bosch, Sharp Electronics and Panasonic.

A newer contender is ART, a five-channel Saudi operation owned by Saudi conglomerate Dallah Al-Baraka Group, broadcasting from Jeddah. The channel, specializing in children's programming, variety, sports, films and music, began in 1993.

Orbit, beamed up from Rome into the Arab-speaking world, is taking a different approach, entering the region as a pay-TV service. Introduced in May 1994, it currently broadcasts 16 encrypted channels, including the BBC World Service Television Arabic Language Channel, Orbit-ESPN Sports Channel and America Plus. The channel also features Hollywood hit progams such as "Melrose Place" and "Seinfeld."

Orbit News retransmits U.S. news coverage from ABC, NBC and CBS and transmits an ad-financed Promotional Channel featuring highlights of what's on and when on the other channels.

Orbit believes wealthy Arab families and resident expatriates will pay about $6,000 for the reception dish and between $55 and $200 a month in subscription fees. The service is currently free while the network increases its viewing figures.

"Advertising in the Middle East is growing, and we believe it will benefit us in the long term as viewership grows," said Carl Meyer, Orbit's senior VP-marketing and sales. Rates on the Promotional Channel, used by about 15 multinational advertisers including Pepsi-Cola International and Estee Lauder, range from $1,200 to $1,600 for a 30-second spot.

The one Middle East nation all satellite operators are panting for is Saudi Arabia. With 18.2 million citizens and $269.4 million in ad spending last year, it is a hot market. Advertisers spent $59.6 million on Saudi Arabian TV last year, said Bahrain-based agency Fortune Promoseven, more than double that of the UAE's $29.4 million.

But there's a catch. "Saudi Arabia is also the most difficult country with strict censorship laws," said Imad Kublawi, managing director of agency TMI London. Cigarette and alcohol ads are banned and the conservative governments have banned satellite dishes.

Black market dish sales, however, continue. "More than half a million dishes are still operational in Saudi Arabia despite the ban," said an MBC spokesman.

There's also the difficulty of reach and censorship. Ad agencies recommend that clients wanting Saudi viewers combine regional satellite TV and local TV for their campaigns. "We have to use [over-the-air] Saudi TV stations, if we want an adequate reach," Mr. Kublawi said.

To bypass strict Saudi censorship laws that forbid a woman's hair and face from appearing on TV at the same time, he added: "We always have to produce two versions of the same commercial. The one in which the woman is veiled for Saudi TV, and the other in which she isn't for satellite."

A TMI-created commercial for Reckitt & Colman's Barbara Gould cosmetics line, for example, shows a woman's face. But her hair is covered by a stylish cloth blowing in the breeze. "It shows you can glamorize within censorship restrictions," he added.

Now broadcasters are vying for slots on a 20-channel Saudi state cable system due to start operating in 1996. Crucially, the new system will enable the government to edit foreign programs; censorship is the price for a bigger audience.

Satellite broadcasters targeting the Gulf are compensated by Egypt's population of 60 million. The country's satellite distribution is low, but cheap dishes and Cairo's reputation as the center of Arab film industries should encourage growth.


An economic snapshot

1993 GNP

per capita

Population (U.S. dollars)

BAHRAIN 586,000 $7,870

EGYPT 59,325,000 $660

IRAN* 65,612,000 $2,230

IRAQ 19,890,000 $1,940

ISRAEL 5,051,000 $13,760

JORDAN 3,961,000 $1,190

KUWAIT 1,819,000 $23,350

LEBANON 3,620,000 $660

OMAN 1,701,000 $5,600

QATAR 513,000 $15,140

SAUDI ARABIA* 18,197,000 $6,500

SYRIA* 14,887,000 $2,300

TURKEY 59,461,000 $2,120

UNITED ARAB EMIRATES 2,791,000 $22,470

YEMEN* 11,105,000 $775

*1992 figures. Sources: New World of Nations: Today's Almanac, 1994; The World Bank Atlas 1995

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