The whole process is being heralded as the beginning of a new era in Saudi radio, and comes years after companies such as Rotana (also recently awarded a license) began pushing for a more liberal and competitive Saudi radio market.

The first new license was awarded at the end of January to Alf Alf, a Saudi Arabian media company that produces a newspaper and is planning to launch a television station, for the price of 75 million Saudi riyals. The second was granted two weeks later to Ghayat Al-Ibdaa Innovation Holding for 66 million Saudi riyals, and the third one in early March to Rotana for 67.35 million Saudi riyals.

The four companies are entering a market that has been monopolized by MBC since 1994, and it’s a change that the media industry is very much looking forward to. “From a buyers’ perspective, the more the merrier,” says Choucrallah Abou Samra, managing director of OmnicomMediaGroup in Jeddah.
 

Mazen Fakhoury, managing director of Mindshare in Saudi Arabia, agrees that the more choices are available, the more interesting work becomes for those in the advertising and communications industry.

“By having a competitive market, we will have more variety of content and much more innovation, and ultimately consumers will gain from that,” he says. “And advertisers will gain by having more options to reach consumers and more interesting ways of reaching them, and from a media buying unit perspective, we have a medium that is going into an interesting phase.”

“This is where you play around with negotiation tactics and you put vehicles against each other,” says Abou Samra. “From a buyer’s perspective, the more you have the more you negotiate, and from a planner’s perspective, the more you have the more it will increase fragmentation. This is where analysis of research becomes critical, to assess which is the best vehicle for reaching your target audience.”

Firas Khashman, general manager of emerging business at Rotana, says he expects that the Saudi radio market will grow rapidly once the new stations begin operating (which is expected to be in about six months), simply because it could not grow while it was dominated by MBC.

“Because they were alone in the market, MBC didn’t have to compete and be the best,” says Khashman. “We believe what is currently being offered in the market is not really up to the expectations of listeners, as Saudi listeners deserve to have the choice to listen to more than one offering. MBC will now be obliged to work on their offering.”

Khashman adds that, with MBC currently monopolizing the market, the media giant isn’t making an effort to attract what he calls the “neighborhood advertiser.”

“Usually, radio advertisers are not only big companies; there are small businesses here and there that rely on radio stations, and this happens the world over,” he says. “MBC is not doing that; their spot prices are very high, and they are already sold to those who can afford them.”
 

According to the Ministry of Culture & Information in Saudi Arabia, all license holders must cover the entire country, broadcasting out of no less than 15 cities and a maximum of 30. “This will not be easy, unless companies enjoy great human and technical resources, and are deemed as fully equipped with technical cadres and radio programs, to succeed in attracting different categories of listeners from around the country,” says Dr. Riad Ben Kamal Najem, assisting undersecretary for Engineering Affairs at the Ministry.

“Companies should also establish upon implementation a Saudi company, with a 100 percent Saudi capital, headquartered in the KSA, and responsible for operating the network,” he adds. “One party cannot acquire more than one permit for the time being.”

Mazen Fakhoury, managing director of Mindshare in Saudi Arabia, is very optimistic about the changes happening on the Saudi radio scene, and says that the way the process has unfolded is highly credible.

“I have no doubt in my mind that the Saudi market, when it comes to competitive frameworks, is the best in the Middle East,” says Fakhoury. “From a legal perspective and from the demands they are making, it’s the most credible framework I have ever seen in the region.”

Fakhoury says that the Ministry of Culture & Information has ensured that the tender documents make for a level playing field, where all of those who bid and are awarded licenses will be able to compete with each other. “Rotana will of course have some sort of advantage in terms of content, as they own a lot of the rights to Arabic songs,” he says. “But as far as the spirit I’ve seen from the tender documents; I would have to say kudos to the ministry for creating a leveled playing field where all stations will have to come up with innovations.”
 

Nasr El-Beik, general manager of Ghayat Al-Ibdaa Innovation Holding, says that acquiring a radio broadcasting authorization has been part of company concerns and priorities for a while.

“Listeners need a greater variety of channels,” says El-Beik. “This is what incited us to be a part of the competing companies, particularly when the media sector in the Kingdom is going through a lot of changes and developments to go international. Media officials in the ministry are pushing to grant the private sector a proper opportunity to fulfill its potential and add value to the broadcasting business both locally and internationally.”

As part of the process the Ministry has offered to buy the land and erect the antennas required for the new stations, and Firas Khashman, general manager of emerging business at Rotana, says that he believes the infrastructure will be set up in less than six months. “We are ready to broadcast tomorrow, because we have our studios set up in Lebanon,” says Khashman. “So if they give us the frequencies we can start broadcasting immediately.”

Khashman says the process may have taken a long time to roll out, but this is a breakthrough in the Kingdom. “It takes a long time to get the regulations and right laws in place, but fortunately we are here now,” he says.

Dr. Najem says that censorship will be carried out by radio channels themselves, and that the ministry will not interfere with the quality of the programs. Though he adds that, “When live coverage is conducted for some events, certain arrangements will be agreed upon between the Ministry and the radio channels.”