High on Dubai

This article originally appeared in the MIPCOM 2013 issue of TV Middle East & Africa.

With investment schemes and high-tech facilities, Dubai is attracting the interest of media companies worldwide.

Sometimes only a cliché will do in describing the boomtown that is Dubai. The happy problem is that the clichés don’t begin to reflect the “go to it” attitude of the tiny emirate. And despite a hiccup a year or two ago when the financing train fell off the rails, all the clichés are back—and in most cases stronger than ever.

And while most eyes look at the endless sea of Manhattan-style skyscrapers in Dubai, the truth is that the message, at least as far as broadcasting and the media is concerned, continues to resonate well beyond the immediate region. Dubai Media City (which opened in 2001) and Dubai Studio City (which launched in 2006), both of which started out as straightforward real-estate schemes, have succeeded beyond the planners’ wildest dreams. The jobs that the schemes have created are real, valuable, and have become one of Dubai’s cornerstones in the emirate’s plans for its future.

And the TV and movie stars are turning up in droves. Whether it is Brad Pitt or Tom Cruise, George Clooney, Eva Longoria, Oprah Winfrey, Robert de Niro, or the likes of Paris Hilton, Dubai’s locations are suiting filmmakers, the celebrities and even the money men!

Dubai’s media-related investments continue. In September, Dubai Studio City’s latest addition opened. It is a 50,000-square-foot soundstage complex that is claimed to be the largest in the region and comes complete with craft workshops, dressing rooms and all the support paraphernalia needed for production. The MBC stage (25,000 square feet) has been leased for five years by the Arab world’s leading broadcaster and will be used for high-profile drama production. Next door are two more stages. The facility is booked (for a 103-day shoot, and for a film’s 95-day shoot). More are planned, and the desert is being made ready with roads, electricity and trees, and accompanied by mid-range hotels for visiting technicians and other support staff. A mile away is a complex of boutique studios, largely occupied by fast-growing creative businesses.

Jamal Al Sharif is the passionate and high-profile managing director of Dubai Media City and Dubai Studio City, as well as chairman of the Dubai Film and TV Commission. He says there are 15 film and major TV productions in the pipeline drawn from a mix of Hollywood, Bollywood, Turkish and other international productions.

Key to his overall strategy was establishing a New York-style Location Approval Services, a “one-stop” permit shop that now has considerable influence on local suppliers, police and such, as well as more than a little clout when it comes to getting discounts on airline seats and hotel rooms.

STAGING THE SCENE
“We have been very lucky winning good support from India, which is shooting more and more projects with us,” Al Sharif says, explaining that Hollywood blockbusters such as The Bourne Legacy as well as Mission: Impossible 4 have helped spread the message that Dubai can deliver. “Our objective is not simply to attract high-profile movies such as these, but also to boost the amount they spend here.”

The proof is that whether a movie’s VIP element might only be for a few days, the ancillary support and pre-shooting agenda might take many weeks. “For Bourne they brought in seven heads of department, and another 70 or 80 [were] hired locally. For MI4 they had about 150 high-end staff, but ended up with around 300 locals. The full crew was nearer to 450 people, and the shoot was for a month, but with two months prep. It was a great project for us.”

Dubai’s efforts to become a media hub are in line with the city’s initiatives to boost other segments of the economy, including Internet, biotech and industrial businesses, each designed to add value. Of course, the year-round tourism business helps keep the hotels busy and tens of thousands of staff employed. 

Al Sharif admits that as well as creating the logistics to support the new ventures, he had to listen to tenants and businesses. One local grumble was that the Media City had such explosive success that there wasn’t enough shaded car parking! That problem was quickly remedied. “Film was not an original thought, but it simply grew out of the demand from the other aspects of media and culture. But film demands its own special infrastructure, not only in terms of buildings, but also in terms of freelancers, training and the other skills.”

Dubai has a number of advantages, Al Sharif maintains, not the least being its location. The city is “just three hours from India, and within easy traveling time of just about everywhere. To the Arab world we are just a couple of hours away from Cairo and the other capitals. And we have 360 days of sunshine, I can guarantee that!”

Dubai Media City, established in 2001, was the starting point, targeting businesses in the broadcasting, advertising, production and publishing sectors and all sitting within a new concept for the Arab world: the Dubai duty-free zone. Plenty of other cities allowed for the free import and processing of goods within duty-free zones, but Dubai offered tax-free status, retention of 100 percent of profits and the freedom to operate without the state breathing down a company’s neck. Then came Studio City, announced in February 2005. “Today we have achieved 20 percent of the plan’s Phase 1, with much more under development taking us through Phases 2 to 4,” Al Sharif says. “We have everything from boutique studios to sound-stages to warehouses and workshops. We have a 3-million-square-foot back-lot. Today we are 100-percent occupied.”

BUILDING BLOCKS
Among Studio City’s occupants is TSL Middle East, a television infrastructure company. “We have looked after major TV projects in Kuwait, VTR in Lebanon, Dubai TV and ART’s OB [Arab Radio and Television Network’s outside broadcasting] trucks for covering the Saudi Soccer league, for example,” explains Andy Davies, the business development manager of TSL Middle East. One of the company’s most recent clients was Sky News Arabia, a joint-venture 24-hour news channel.

Davies explains that out of Dubai they are quoting around five major projects a week from as far away as Singapore, Morocco and Libya. “TSL has always been focused on news, and file-based activity and multichannel play-out. Without breaking confidences, I think you’ll see movement in terms of pay TV in the region before too long.”

Sky News Arabia joins an extremely crowded free-to-air satellite landscape in the Middle East. Nilesat, for example, is now carrying almost 1,000 channels, and the satellite operator’s European partner, Eutelsat, will launch a new satellite to cope with increased demand for capacity. The growth in free-to-air broadcasting locally has been phenomenal. Arab Advisors Group in an August report talked about 600-percent growth in free-to-air channels over the past ten years.

It is fair to say that the top ten channels take at least 90 percent of the overall ad revenues, but broadcasters are continually trying to make their mark. Against this backdrop, pay-TV operators are looking to deliver high-quality content, in high definition, in a bid to convince viewers to pay a monthly subscription fee. Pay-TV operators, like the merged Showtime and Orbit, OSN, are now making their presence felt. Newcomers like Al Jazeera Sport and Abu Dhabi are conventionally using highly priced sports content to compete, and their pockets are deep.

Another new entrant was launched on May 30 in the form of My-HD, which, like OSN, is based firmly in Dubai. My-HD is a joint venture with satellite operator Arabsat and offers a bouquet of HD channels at an ultra-low cost. By July 30 it had announced that 9 Rotana HD channels would be added to the bundle of 41 premium channels, of which 35 are in HD.

CEO Cliff Nelson, who has a long history in Middle East pay TV, also announced that Irdeto would be protecting his broadcast signals. My-HD has also signed up leading Filipino channels from GMA Network, which should appeal to the region’s large number of guest workers. GMA has switched allegiance from pay-TV platform OSN to My-HD.

Nelson says that My-HD has been greatly influenced by the success of HD+, a low-cost HDTV service operating in Germany. My-HD is charging the equivalent of about $4.50 a month for its basic bundle (which compares to the $60-$110 a month paid to the region’s more established pay-TV suppliers).

SAFE HAVEN
Dubai also serves as the headquarters of the MOBY Group, which beams programming throughout—cliché time again—“war-torn” Afghanistan.

Saad Mohseni, the chairman and CEO of MOBY, has been described as “Afghanistan’s first media mogul.” The description is apt. Mohseni heads up a business of around 1,000 staff out of his headquarters in Dubai. The business operates the leading Afghan channels Tolo TV, Lemar TV and TOLOnews; the radio stations Arman FM and Arakozia FM, as well as the production house Kaboora. It also broadcasts the leading Farsi general-entertainment satellite TV channels Farsi1 and Zemzemeh. MOBY produces Afghan Star, the nation’s number one TV show on Tolo TV. In June, Tolo started screening its own version of The Voice.

Mohseni, together with family members, established the business in 2002 and over the past decade built MOBY into Afghanistan’s dominant multimedia powerhouse, with a reported 60-percent market share. Mohseni says it was often difficult for outsiders to imagine that the vast bulk of the Afghanistan nation was doing what most other people did in an evening—“they watch TV!”

AFGHAN STAR
MOBY’s output extends beyond TV into radio, Internet and publishing ventures and is the number one source of news, entertainment and educational content for 30 million Afghans, reaching 15 million of them daily on Tolo with soap operas, reality shows and journalism. Rupert Murdoch’s 21st Century Fox has a stake in MOBY Group.

MOBY is targeting tomorrow’s generation, and is expecting Afghanistan to grow into a nation that is increasingly educated, healthy and with a GDP that’s expanding by 10 percent annually. Today’s GDP growth rate per World Bank data is around 12 percent, and the forecasts talk about a population of more than 80 million by 2050.

“The core of our business is in Afghanistan and while our staff is happy enough to be in Kabul for work, they don’t necessarily want to live there or have their families there,” Mohseni says of setting up shop in Dubai. “We have Dubai’s schools, clinics and a very easy lifestyle for the families. To attract good people you have to be in a town like Dubai. Our wives, used to New York or London, are not going to move to a place that has no soul. Everything is relative, of course, and Dubai isn’t quite New York! But it is doing more than enough to make life interesting. We did look closely at Istanbul, but the city is a nightmare with traffic and bureaucracy.”

Mohseni notes that taxation rates were also a consideration when deciding where to base MOBY’s operations. “We pay plenty of tax in those individual countries where we operate, but it is important to be as economical as possible. We have offices in India, but getting a constant supply of electricity is a serious problem. Getting money out of India is a serious problem. And India’s bureaucracy is a nightmare. So these are the reasons why we are here in Dubai, and are very happy. Which is not to say there aren’t challenges: hiring staff here is expensive, because you tend to have to bring people in. You tend to have to pay ‘first-world’ prices, and private schools are as expensive here as anywhere else, same with health care, restaurants, and so on. Locate in India and you could save some significant cash, or Turkey, but productivity would suffer.”