Real News On Tv? This Can't Be Saudi Arabia

One evening last year, a Saudi family in Jidda was startled to see some very hot fare on television: a satellite broadcast of a debate on the House of Saud's tenure in power and the taboo subject of succession to the throne. "As soon as we heard this, we were scared," said a family member. "We are not used to people talking publicly and honestly about the authorities."

It's just such unusual fare that's making satellite broadcasting a booming business in the Persian Gulf. There are a half-dozen privately held stations, whose owners include members of the Saudi royal family. They are using everything from British Broadcasting Corp. programs to soft-core porn from Turkey to lure viewers away from the stodgy, heavily censored state media. "We watch satellite news channels to find out what's going on in our own countries," says a Saudi media analyst.

Already, the newcomers are in a major fight with state-run channels for advertising revenue. The gulf's total TV ad spending will be about $260 million this year and is growing 25% annually, says Daniel Binns, network media director at Fortune Proseven, an advertising agency in Bahrain. He figures satellite broadcasters' share of the market has reached one-third and is still increasing.

Advertisers prefer satellite channels because they tend to be more professionally run and can hit the whole region with one ad. "Ads that appear on the different gulf local channels are time-consuming and costly to produce," says Wael Hussein of Saatchi & Saatchi in Dubai. "For instance, all the gulf countries have different rules for how much of a baby's skin can appear [in a diaper commercial]," he says.

Among the popular channels are Middle East Broadcasting Corp. (MBC) and Egyptian Satellite Channel (ESC). London-based, Saudi-owned MBC features serious news broadcasts with correspondents reporting from major world capitals--a refreshing change from Arab state channels, which are not above showing endless footage of leaders welcoming each other at airports. ESC, which is owned by the Cairo government, relies on Egyptian movies and soap operas, which are hugely popular in the Arab world.

Making inroads is Rupert Murdoch's Star TV, which is starting to produce its own music and variety programs in Arabic. A relative newcomer is Rome-based, Saudi-owned Orbit, which offers fare from U.S. networks as well as Arabic broadcasts by the respected BBC world service. Another player is Arab Radio & Television (ART), which shows movies, children's programs, and sports.

The satellite channels have a delicate relationship with gulf governments. Broadcasters employ a good deal of self-censorship to avoid clashes with conservative regimes. When Orbit aired the debate on the Saudi royal family, it was banned from selling its decoders for months.

Perhaps the leading gulf TV mogul is MBC's owner, Waleed al-Ibrahim, 34, who says he got hooked on TV while in business school at the University of Oregon. "When I got back from the states, I found a big void in television entertainment in the gulf," says al-Ibrahim. "I knew there was definitely a market to be exploited." It hasn't hurt that al-Ibrahim is the brother of the favorite wife of Saudi Arabia's King Fahd. Al-Ibrahim values his media properties at $300 million.

Another major figure is ART's owner, Saleh Kamel, a 54-year-old Saudi entrepreneur and religious conservative who says he moved into satellite broadcasting to provide Arabic fare to counter "the Western satellite invasion." Kamel founded MBC with al-Ibrahim but sold out to him.

A BEST BUY. Satellite TV is sold by subscription, ranging up to $1,800 annually. Orbit started out selling decoders for $10,000, but price resistance forced it to cut that to $2,500. Ads are relatively cheap: 30-second spots on MBC, which some advertisers consider the best buy, start at $540 and go up to $3,800 for hot events such as the gulf soccer finals.

In a move that could lead to renewed censorship, al-Ibrahim is installing a so-called wireless cable system for the Saudis. It is feared that once it is in place, the Saudis will crack down on dishes. They are now technically illegal but the ban isn't enforced. The United Arab Emirates, Bahrain, and Qatar are all at work on similar systems. But now that the gulfies are hooked, it may be hard to deny them their nightly fix.

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