What Murdoch is really doing in the Middle East

Here’s a copy of my cover story for the inaugural issue of Bold magazine:

By Habib Battah


Under an ornate gold lattice ceiling in an old Beirut mansion, rows of flat screen panels are buzzing at the offices of Quantum, a PR and communications consulting firm. The company’s clients include governments and opposition movements alike, both across the region and beyond– all seeking effective Arab media strategies.  

Having worked with many major broadcasters, Jihad Bitar, Quantum’s ‘knowledge director’ is frank when it comes to his experience in the Arab TV industry: “Very few people are in this business to make money,” he says.

Indeed, one could easily compile a list of reasons why Sky News Arabia, the latest venture backed by billionaire media tycoon Rupert Murdoch, could also be destined to join the ranks of cash-burning Arab TV outlets.

Murdoch owns News Corp., the world’s second largest media conglomerate, but he enters the crowded and abysmally low revenue-generating Middle East broadcast news business via a 50/50 joint venture with the virtually unknown outfit, Abu Dhabi Media Investment Corporation (ADMIC). Though it sounds a lot like the Abu Dhabi Media Company, which has recently partnered with major American studios to produce Hollywood films, ADMIC has no website, much less any track record to speak of beyond the fact that is owned by United Arab Emirates Prince, Sheikh Mansour bin Zayed Al Nahyan, who reportedly has access to a trillion dollar family fortune.


SHOW ME THE MONEY

Even so, billions of petrodollars have been sunk into the most popular Arab broadcast networks over the past decade, and few if any can boast to break even, let alone turn a profit, analysts say.
This is largely because those interested in wooing Arab viewers are willing to invest much more than the Middle East TV market is actually worth in terms of advertising value, which estimated around $1 billion. Over recent years, some Arab media moguls have spent half that amount in start-up costs alone.

Making matters worse, if money was an object, the growth in TV stations has been explosive. Despite the relatively minuscule advertising pie, the number of Arab channels has mushroomed from a handful in the early 1990s to around 1,000 today, according to estimates.

Granted the vast majority of these channels contain zero production value, and serve as little more than electronic billboards, the cumulative investment is substantial, reaching some $6.5 billion in annual operating costs, according to Ali Jaber, the general director of MBC TV Group, one of the region’s largest broadcast networks.

“The Arab political and financial elite is ready to pay $5.5 billion in loses on television every year,” he said during a presentation at the 2011 Tedx conference in Beirut.

Many wonder if the Murdoch-Abu Dhabi venture will be any different. But Quantum’s Bitar says one need look beyond the financials. “You don’t open a TV channel to make money, you open a channel to have influence.”

Indeed, the more intangible dividends of broadcasting have been made famous by Al Jazeera, whose rebel-rousing satellite feed not only electrified audiences but also proved mightier than the draconian police states of Mubarak or Qaddafi, both of whom tried desperately to scramble Al Jazeera’s signal and failed. As a sign of appreciation, Libyan rebels hung a Qatari flag across the top of their leader’s once impenetrable palace.

By putting up the money and facilities for Murdoch’s Sky, which will be based in Abu Dhabi’s state-sponsored media park, perhaps the Emirati royal family now seeks a piece of that all-powerful broadcast saber their Qatari counterparts have so deftly wielded– if not to influence others than at least to take protective measures against the potential waves of public discord that have so far largely spared the Arabian peninsula, where all major Arab broadcasters are based.  After all, the creation of Al Arabiya in 2003, which serves as Al Jazeera’s only significant rival, was widely seen as a direct reaction to the threat Qatar posed to the Saudi Kingdom’s influence.     

The idea was not new. As early as the late 1990s, well before the tremors of today, Saudi investors had offered some $5 billion to purchase Al Jazeera, the station’s then senior editor, Samir Khader, told participants at media conference in Texas in 2005. Famous for his dripping sarcasm, the battle-worn hack of Palestinian descent was blunt when asked why the Qatari royals refused to sell at the time: “Public relations,” he said. “The best operation of public relations launched by any government in the Middle East. What does Al Jazeera cost the State of Qatar? Nowadays, around $200, $250 million a year.  There are countries in the region, in the Gulf, that pay billions in public relations campaigns and the result is zero.”

Ironically, Khader who has recently been appointed executive producer of Sky News Arabia denies any similar quid pro quo on the part of Abu Dhabi’s Sheikh Mansour.

“We are a private organization,” he said of Sky Arabia, when reached by phone. “We have nothing to do with the Emirati government.”

But to say that would be to believe that Sheikh Mansour, who is listed as the sole owner of Sky’s partner, ADMIC, in its press release, has little to do with the U.A.E. Emir, his half brother, or his own government positions for that matter, both as deputy prime minister and minister of presidential affairs.     

Of course it would also be hard to believe that U.A.E. royals did not see the potential diplomatic gains of owning a major news station at a time when almost every world economic power has launched a lavishly funded Arabic language “news” channel.

These include: Al Alam, which was launched from Tehran in 2003; Al Hurra from Washington in 2004; France 24 from Paris in 2006; Russia Al Youm from Moscow in 2007; BBC Arabic from London in 2008 and CCTV Arabic from Beijing in 2009.


VYING FOR HEARTS AND MINDS



Ramsay Najjar, an Arab television consultant based in Beirut, links the flurry of interest in Arab viewers with geopolitics and fossil fuel exploration.

“This is a gold rush,” he said. “We are living the last century of natural resources. It’s now or never. If you don’t get your cut, this natural resource will disappear.”

As the founder of Strategic Communication Consultancy, which also produces strategies for governments and corporations, Najjar says the region is ripe for influence initiatives:

“It’s the only part of the world where change is taking place.”

But despite the dozens of shiny news studios, sleek glass anchor desks unveiled and hundreds of jobs created for Arab reporters over the last decade, the audience numbers attained by foreign government projects has fallen well short of expectations.

None have approached the popularity of Al Jazeera and Al Arabiya which industry insiders say run head to head in many markets.

By contrast, most of the imported news channels were not even recorded in monthly 2011 surveys conducted by Stat Ipsos in key markets such as Saudi Arabia, Egypt and Lebanon according to information obtained from the firm. Among those that were, France 24 received an average score of 0.1 percent of the audience in all three countries while Al Hurra performed marginally better at an average 0.5-1 percent of viewers. BBC Arabic, which recently touted 80 percent gains in its reginonal audience, still paled in comparison to its competitors in Lebanon gaining a daily average of 0.5 percent of viewers compared to Al Jazeera at 11.1 percent and Al Arabiya at 9.6 percent. The BBC did show some improvement in Egypt at 2.8 percent compared Al Jazeera at 10.2 percent and Al Arabiya at 9 percent.


OTHER MARKET ENTRANTS 


With three years on the market, the BBC Arabic’s modest performance indicates Sky News Arabia will have a major challenge ahead if it seeks to compete with the mainstream players.


To its credit, Sky Arabia may have an edge in that it will be based in the Middle East, unlike many of the other Arabized news brands. But this won’t be the case for long. At least two more high profile home grown all-news networks are expected to be launched in 2012. The Saudi media mogul, Prince Walid Bin Talal, has said he will launch “Al Arab” in association with financial news giant Bloomberg. And former prominent Al Jazeera on-air personality Ghassan Ben Jeddou has said he will launch “Al-Mayadeen” with a handful of well-known broadcast journalists.

The channels are likely to attract viewers based upon both on programing quality and editorial line: the Ben Jeddou venture, to be based in Beirut, may voice the talk-show host’s publicly stated admiration for Hezbollah, a view shared by many Arab viewers. Bin Talal on the other hand, whose wide stock assets include a significant holding in Murdoch’s News Corp, will likely be pro-business and is rumored to be launched from Bahrain. As a joint venture, Sky Arabia may be harder to pin down: how much editorial authority will rest in Abu Dhabi and how much will be deferred to London?



JUGGLING ACT


Sheikh Mansour, who is better known for his investments in English football club Manchester City and Ferrari, has tapped Sultan Al Jaber as chairman of the channel. Equipped with advanced degrees in business, economics and chemistry, Al Jaber will have to juggle the helm of Sky with legions of other responsibilities he currently holds including chairman of ADMIC, chairman of Abu Dhabi Ports Company and chairman of UAE Federal Health Authority– not to mention multitudes of other UAE boards and senior advisory positions he serves in. If that were not enough for a day’s work, Al Jaber is also secretary general of the UAE National Committee for Climate Change as well as CEO and Managing Director of Masdar, which encompasses a series of multi-billion dollar, multi-faceted long and medium term renewable energy projects.  

Yet if Jaber has too many pots on the stove to play a very active role at Sky, he can always rely on the top news talent that have been recruited to help run the channel. In addition to Al Jazeera veteran Samir Khader as executive producer, the former director of television at ThomsonReuters, Nart Bouran, will server as news director.  Both men are well known in the industry–Bouran has lead operations at Abu Dhabi and Jordan TV while Khader served at Al Jazeera for over a decade, ending his career as head of output. Still, even for these titans convincing Arab viewers to tune in to a brand partially owned by Murdoch, whose media outlets have gained a reputation for Islamophobia and war mongering, could pose somewhat of challenge.

At 80, the Australian mogul has always held close ties with Israel’s leaders, including Ariel “the bulldozer” Sharon–perhaps the most feared and hated personality in the Arab world. With his political views often mirrored in his media assets, Murdoch received an outpouring of support from pro-Israel media following the implication of his British paper, News of the World, in last year’s phone-hacking and police bribery scandal.

New York’s Jewish Week worried about the continuity of the “Murdoch media empire’s strong support of Israel” while Australia’s JTA Online warned of “highly adverse repercussions” for the Jewish State in the event of a “major erosion of Murdoch media…”

Having been honored at numerous dinners by pro-Israel organizations over the years, much praise has been heaped upon Murdoch publications’ favorable Middle East coverage, including The New York Post, The Wall Street Journal and The London Times to name a few.    

It remains unclear if Sky Arabia will receive the similar accolades seeing that its website claims it will be an “Arab voice” that will “shine a light on the Arab world from the Arab world.”

Ironically Murdoch’s prime American television outlet, Fox News, has managed to do quite the opposite, not only alienating Middle East viewers but vilifying Murdoch’s very own Arab business partners.


FAMOUS RIDICULE


During a 2010 episode of the banter-heaving program, Fox and Friends, the Saudi Prince Bin Talal, who is the largest shareholder in News Corporation outside the Murdoch family, was dubbed “a guy that funds radical madrasas all over the world,” by Fox contributor Dan Seener, a former advisor to George W. Bush.

The episode was famously ridiculed by Daily Show host John Stewart, who wondered if Fox was either “really evil” for failing to mention Bin Talal by name– because doing so could dilute their “fear-driven narrative”–or  “just really stupid” for not knowing that the purported “terror funder” was actually part owner of Fox’s parent company.

Other Fox hosts such as Bill O’Reilly have openly suggested that there exists a “Muslim problem in the world,” during a 2010 broadcast, an idea publicly advanced by Murdoch himself, a few years earlier. “You have to be careful about Muslims who have a very strong – in many ways very fine – religion….,” he told Australia’s Nine Network in 2006.
“They are much harder to integrate into a community than the average Indian or Chinese or Japanese even.”

It’s little wonder that Sky Arabia executives are distancing themselves from Murdoch.

“I know nothing about Rupert Murdoch, his affiliations, his relationships, all I know is what I read in newspapers and over the internet,” the new executive producer, Samir Khader said.

“I don’t know why you link always Sky news Arabia with Rupert Murdoch. He only has some stakes, but he is not the owner,” he added.

“I don’t see any relationship between Sky as an organization and Rupert Murdoch.”

This is a curious statement considering that BSkyB, the 50/50 partner in Sky News Arabia, is 39 percent owned by News Corp, and chaired by Murdoch’s son, James. Furthermore, Murdoch Senior remains fully in control of News Corp through his family’s near 40 percent stake in B shares which have the voting rights and effectively control the company.

And let’s not forget that it was James Murdoch who officially unveiled Sky News Arabia in Abu Dhabi last year alongside ADMIC chairman Sultan Al Jaber–as one would expect from a joint partner.  In fact, Murdoch junior has taken such an interest in Sky Arabia that he is even quoted in its press release touting the Arab world as “a highly attractive region for media investment” and Abu Dhabi “an excellent location from which to enter this exciting marketplace.”


‘PREPOSTEROUS’ 


Even if Sky Arabia execs would like to divorce themselves from the views of Murdoch or the pundits on Fox, the new channel may also have to distance itself from the Sky brand itself, which though it has not yet debuted in Arabic, has already created distaste for many Arab viewers, particularly those in Lebanon.

During Israel’s 2006 bombing campaign on the country, the former British MP George Galloway famously ridiculed a Sky News anchor live on television after she asked that he justify his support for Hezbollah, a “terrorist organization” in “most people’s eyes.”

“What a silly person you are,” Galloway said, repeatedly mocking the anchor’s questions as “preposterous.”  Hezbollah were considered terrorists “only in the mind of Rupert Murdoch’s Sky and the Times and the Sun and the News of the World….In most people’s eyes, Israel is a terrorist state.” Pointing a finger at the camera, he fired back:  “It’s you who should be justifying the evident bias that is written on every line of your face and is in every nuance of your voice, and is loaded in every question that you ask.”

At the time, the clip went viral over email, well before the advent of Twitter and Facebook and has recently been uploaded to youtube with nearly 2 million views.

Khader could not immediately comment on whether or not Hezbollah, widely considered a legitimate resistance movement in the Muslim world, would be labeled as terrorists on Sky Arabia as the organization’s style book was “not yet finalized.”

“We don’t use terminology that will depict others positively or negatively,” he said.  “we will talk only about facts.”

To be sure, Sky Arabia is promising “objective and independent” journalism on its website, but viewers may wonder if Abu Dhabi’s rulers will be spared hard-hitting questions from Sky reporters just as Doha’s leading family has evaded those of Al Jazeera.

Surely Murdoch wouldn’t mind looking the other way either, judging by his reputation to acquiescing to friendly regimes, as his decision to bar BBC from broadcasting to China would suggest.

What then would Murdoch have to gain from Sky Arabia if its launch could more easily serve diplomatic rather than financial objectives?

Some have speculated that Abu Dhabi’s oil cash could be used to help expand Murdoch’s empire elsewhere in the world or buy out media assets he may need to divest in order to clinch deals that regulators frowned upon.

Back in July 2011 Murdoch’s bid to buy the 61 percent of BSkyB he didn’t already own was blown out of the water by last summer’s phone hacking scandal. Perhaps Murdoch’s new friends in the Middle East could now be prevailed upon to launch a bid of their own as they would have no competition problem- and might even relish owning a big slice of the UK’s digital TV media.

At the same time, Murdoch has his own beliefs to advance on the critical role the media is playing in the Middle East.  

While accepting an award at American Jewish Committee in 2009, he said “a growing assault” on Israel’s legitimacy had taken the shape of a “global media war” that creates sympathy for groups like Hamas.

By 2010, Murdoch had broadened this theory, telling the Anti Defamation league that the world was witnessing “an ongoing war against the Jews” that had moved past the violence and terrorism of decades past.    

“Now the war has entered a new phase.  This is the soft war that seeks to isolate Israel by delegitimizing it. The battleground is everywhere:  the media … multinational organizations … NGOs…”

Of particular concern was the kind of anti-Semitism that “dresses itself up as legitimate disagreement with Israel,” he said.

Considering that groups opposing Israel get plenty of air time on Al Jazeera and other Arab channels, perhaps Sky Arabia will attempt to mitigate against this trend. The current Israeli leadership could definitely use all the support it can get, particularly if they are to participate in another war in the region.    


AVERAGE DAILY VIEWERSHIP*:

KSA 2011

Al Arabiya: 28 percent
Al Jazeera: 15 percent
Al Akhbariya (Saudi state-owned): 5 percent
BBC Arabic: 1 percent
France 24 Arabic: 0.1 percent
Al Hurra: 0 percent


Egypt 2011

Al Jazeera: 10.2 percent
Al Arabiya: 9 percent
BBC Arabic: 2.8 percent
Al Hurra: 1 percent
France 24 Arabic: 0.1 percent

Lebanon 2011

Al Jazeera. 11.1 percent
Al Arabiya: 9.6 percent
Al Hurra: 1 percent
BBC Arabic: 0.5 percent
France 24 Arabic: 0.1 percent

*Source: Stat IPSOS, Beirut