Rotana expands indoors with 80% Hyper Media stake

Rotana, the owner of the bulk of the world's Arabic media content, has acquired a controlling stake in Hyper Media, the Dubai indoor advertising company. The deal, finalised late last month, capped a year of expansion for Rotana. The purchase of an 80 per cent stake in Hyper Media, which owns the exclusive indoor advertising rights in the UAE to such retail giants as Carrefour and Spinneys, continues the rapid expansion of the company at a time when many other media companies are cutting back in response to slowing advertising revenue growth. Rotana Media Services (RMS), the Dubai-based division of the Saudi Arabian Rotana media empire responsible for generating revenue through advertising and value-added services, is also set to more than double its staff by the end of next year. "In 2008, RMS was 90 people," said Nezar Nagro, the president of RMS. "Today we are at 150, and our revenue is almost triple because we have grown so much." Mr Nagro would not disclose the revenue, but he predicted it would be 1 billion Saudi riyals (Dh980.7 million) by the end of this year. By that point, he expected RMS to have 200 employees between its Dubai and Beirut offices. Much of the expansion has come from taking over the lucrative advertising sales for LBC, which merged with Rotana in July after Saudi Prince Alwaleed bin Talal, who owns Rotana, increased his stake in the Lebanese satellite broadcaster to a controlling 85 per cent. LBC had formerly had a contract with the Choueiri Group, one of the region's largest advertising companies, to sell its advertisements until 2010. The new arrangement therefore required many months of delicate negotiation, Mr Nagro said. "We took our time because we wanted to finish it in a good situation," he said. "We didn't want to take it to court. At the end of the day, it's happened." RMS began selling adverts for LBC last week. Jean Pierre Tannous, the general manager of Media Sat, the arm of the Choueiri Group set up in 1996 as the exclusive representative of LBC's media sales, said the division was now "dormant" and the company was relocating staff to other divisions. "The whole operation has been absorbed," he said. "There have not been any layoffs. Media Sat is now redistributed, relocated and the company is dormant, probably waiting for another project." RMS has also expanded its staff to handle sales stemming from this year's addition of two Fox International Channels, Fox Movies and Fox Series. Other plans in the works included the establishment of Rotana Media Services Interactive, which would be bolstered by deals with regional telecommunications companies, Mr Nagro said. "We got the right to sell the ads on du mobile," he said. "We got the right to sell the ads on Zain mobile. This is a new market." The company has also been revamping its website, and is looking for other websites to buy to round out its portfolio. Such a portfolio of digital, print, television, film and musical offerings would allow RMS to offer advertisers "a 360-degree solution" that was unique in the region, Mr Nagro said. "Nobody in the market has what we have. We have content, and content is the king. If you have the content, you can do anything." Rotana missed the brunt of the impact of the economic downturn because most of its advertisers were not among those hardest hit, he said. "The economy affected different sectors, for example real estate and investment. We didn't get any revenue from investment companies and real estate companies. This is good for us. More of our revenue is from P&G (Proctor & Gamble), Nestle, Unilever, Coke, Pepsi." The one dark spot might be the beleaguered car industry, which is a big Rotana advertiser, but on the whole "we are in a good position", Mr Nagro said. Habib Wehbi, the chief executive of Hyper Media, said the decision to sell most of the company to Rotana was part of the 10-year-old company's plans to expand beyond the UAE into Saudi Arabia and other regional markets. He declined to disclose the sale price. khagey@thenational.ae