Kippreport looks into the new trend and the change in strategyNovember 29, 2015 5:01
Interview: Nizar Nagro, President, Rotana Media Services
Rotana’s new channel could break even in five years. That’s if they get the focus right.
May 26, 2011 3:18 by Nathalie Bontems
Rotana Media Services’ president Nizar Nagro tells Communicate what he sees the future holding for the Rotana Group
What media does RMS currently represent?
Rotana, of course, as well as Fox and LBC Sat. And three years ago we established a radio station, Rotana Delta, based in Lebanon. RMS was launched in 2004 as a company selling media advertising; [in terms of business volume] we already come second after Choueiri Group regionally, but our target is to become No. 1, maybe by next year.
What developments are in the pipeline?
We are investing in new programs for LBC Sat. On top of Star Academy, we have 11 new shows, such as Top Chef, a high-quality production that we shot in the Atlantis hotel, Dubai, and Celebrity Do It. We believe in investment, and in high quality on the production side.
As RMS, we are looking for more media to represent – we have no outside clients for the time being – but our priority remains to better establish our existing media. Our objective is to make sure that Rotana, LBC Sat and Fox are among the region’s top 10 TV stations. So far, three are part of that list; we expect to have four stations in the top 10 within the next two years. We may also launch a new TV station in Egypt. There are 80 million people in that country; marketing is improving every year there and the infrastructure is available. But investing in Egypt is not easy.
What about the upcoming television news station Rotana wants to launch?
It is supposed to be launched around October 2011, maybe from the UAE, Saudi Arabia, or Qatar. This decision hasn’t been made yet. We are looking, in terms of criteria, for a profit center, facilities and freedom. Our main market will be Saudi Arabia and, for the first phase, we’ll broadcast only in Arabic.
What will it be called?
We haven’t taken a final decision on the name yet.
With competition including Al Arabiya and Al Jazeera, this specific segment – television news – seems cluttered. Why launch another news station?
We will differentiate ourselves by being more local, by looking at local issues with a positive perspective, which is [Rotana owner Prince Al Waleed Bin Talal’s] way with everything. We won’t go to extremes, but we won’t be in the middle either. We’ll support the culture, but there’s no political agenda behind this station. To be clear: We want to become a major player, and we plan to be profitable.
How do you plan to be profitable? That’s quite rare for a news station.
Business people believe in consultants, so we hired McKinsey and Booz Allen Hamilton. We also requested research from TNS and Ipsos. Our research shows that it is possible to break even in five years. We’ll target the banking sector, real estate and so on, both at a local and at an international level. The station will be fully owned by Prince Al Waleed, and it will have the support of Rotana – of which Al Waleed still owns around 90 percent. We hope that people meters will be launched in KSA by the time the station starts; they have already been approved, and this will help us tremendously.
What investment will be required to launch the station and then to operate it?
We’ll invest $200 million in the station, and our yearly operational costs are estimated at $70 to $80 million.
The fact that another news station, Future News, may soon be shut down doesn’t worry you?
Future News should continue; it belongs to one of the largest groups [the Hariri Group] in the region. Maybe it focused on the wrong places, targeting all Arabs across the region. This leads to a mix of clients, and a lot of clutter. Fox News, by contrast, makes money because it has only one target: the US market. And maybe Future News was not expected to make money; maybe profitability wasn’t its main drive, whereas it is ours.
What is the role of Lebanon in all this?
Lebanon is very important in terms of high-quality production. We have a 150-person team in Lebanon, not to mention the 400-strong staff of LBC Sat and its production company PAC. Lebanon is more of a kitchen than a market.
This article was originally published in Communicate magazine May 2011.