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Power shift, Part II
The economic downturn may have jolted the region’s media industry, but it is triggering changes that are long overdue, Part II.
September 21, 2009 9:44 by Sam Potter
“Media assets which are strong in the market MBC, Abu Dhabi TV, Rotana Cinema are not affected by the crisis,” he says. “They are strategic and important assets, so advertisers allocate their budgets there.”
Chahine believes it is the print and outdoor sectors that have borne the brunt of the financial storm.
“The magazine sector got impacted the most,” he says. “Especially the niche magazines; a lot of them are going out of business. We’re seeing the big publishers consolidating their media assets and restructuring their portfolios. Outdoor was hit, too, particularly in Dubai. The prices in 2008 were irrational, so there was a massive impact.”
And that pattern repeats itself with Dubai’s newspapers. Newspapers across the GCC were very profitable to start with (2007 and 2008 were record years). With profit margins that Chahine places as high as 35 percent, they had a cushion to absorb the impact of the economic slowdown.
But in the UAE, the numerous Dubai-based titles were more heavily exposed to the real estate, financial and automotive industries, and consequently suffered badly. For quarters one and two combined, Ipsos records a drop of more than 40 percent in UAE newspaper ad spend in 2009, compared with the same period in 2008.