ARN sees the potential for radio among car listeners and increasing its share of advertising revenue in the UAE from two to five per cent.
Arabian Radio Network plans additional stations
The Arabian Radio Network (ARN) plans to launch additional stations in the UAE market, where it says there is the potential for radio to double its share of advertising revenue.
ARN, which is owned by the Arab Media Group, operates seven stations including Virgin Radio Dubai, Dubai Eye 103.8 and Dubai 92.
The group says it is studying the launch of additional stations as it envisages the radio sector, which currently attracts just 2 per cent of total advertising revenues in the UAE, growing its total share to above 5 per cent.
"From a commercial point of view, radio is only getting 2 to 3 per cent of advertising revenue," said Steve Smith, the chief operating officer at ARN.
"In most markets it is, on average, at least 9 per cent of advertising revenue. In markets like Singapore and Hong Kong it gets as high as 15 to 20 per cent."
Mr Smith said there was "a perfect radio market" in the UAE because of the time people spent in their cars. "We are going to continue to grow in 2011. We are launching new stations," he said.
Mahmoud al Rasheed, ARN's general manager, said the network could grow to have "maybe eight or nine radio stations" next year, although he added that research on future launches was still in progress.
"There is a place for a lot of potential new radio stations in the market. We are already studying a new radio station," said Mr al Rasheed.
"Radio is not mature enough in this region. In the UAE, [its share of the advertising market] should not be less than 5 per cent - it should be 5 per cent-plus."
Mr Smith said there was "potential in the market for new forms of radio", such as online stations.
ARN recently rebranded its Arabic entertainment station Al Arabiya 99, which now has the tagline "Music First" and will feature 40-minute "music marathons", uninterrupted by commercials or talk.
This followed a period of market research, including auditorium testing, in which a select group of consumers from the station's target audience is invited to rate music.
"In radio there's never a finish line, you always have to stay relevant. [Audiences'] likes and dislikes can change quite dramatically, relatively quickly," said Mr Smith.
Radio accounted for 2.1 per cent of advertising revenue in the UAE over the first half of this year, according to the Pan Arab Research Centre.
Amer el Hajj, the regional buying director at VivaKi, which operates the media agency Starcom MediaVest, said there was the potential for radio to grow its share of the advertising market.
"Local clients were no longer able to afford pan-regional media, so they started using more cost-effective media such as radio," he said. "Radio has the potential to grow. As to the figure, nobody knows."
Mr el Hajj said clients were "still looking for very cost-effective media". However, he said launching new stations would not guarantee increased revenues, because advertisers would put money on established channels first.
Mekki Abdulla, the chief executive of Fujairah Media, which operates several radio stations including Coast 103.2FM and the Arabic broadcast FM92.6, said the group was also looking to launch additional stations.
"We're looking at doing some more. Locally, in Fujairah, we can. But the market is obviously in majority along the Dubai coast," said Mr Abdulla.
"I think there is still room for more stations. I don't know where they are going to come from because the dial is pretty full. You're limited to 30 to 40 stations in the UAE."
Mr Abdulla said the limit on the number of stations was because of the UAE's geography and the ingress of signals from surrounding countries.
Fujairah Media said recently it had acquired a stake in the European station JazzRadio Berlin and was in negotiations in other European markets.