UAE creative industries in figures
4.7 million: UAE population
2 billion: UAE trading hinterland
$100bn: Middle East public relations industry
Source: MEED/UK Trade & Investment
Britain exports $25bn-worth of creative services worldwide each year. The sector encompasses public relations and advertising, merchandise, fashion and gaming broadcast media and publishing. In the UAE, Britain’s creative industries influence UAE nationals’ business decisions, the goods they buy and even how they spend leisure time.
Sports and event management is another new niche in which UK companies are well placed to help the UAE
It is practically impossible to quantify the value of the UAE’s creative industries, as there is a shortage of reliable, audited private sector data. This in itself represents an opportunity for auditing and data-gathering companies.
“The lack of hard data makes it difficult for UK companies to research the market,” says Christine Losecaat, creative industries adviser to UK Trade & Investment. “The UAE is less transparent than many other markets.”
Film funding in the UAE
What is certain is that the UAE’s creative industries sector is poised for expansion. Abu Dhabi Authority for Culture and Heritage (Adach), to take just one example, plans to create a regional hub for film-making. It supervises the Abu Dhabi Film Commission and stages the annual Abu Dhabi Film Festival. The commission is building a film-making infrastructure from scratch, hiring makeup artists, script-writers, composers and editors. In April, Adach launched the Sanad Fund to subsidise Arab film-makers and promote creativity. In September the fund named the first 28 recipients and applications open shortly for the second round of funding.
And government-backed twofour54 media content creation company will become a hub for entertainment and film-making in Abu Dhabi. It moves from its temporary base at Khalifa Park to a new waterfront media city at Mina Zayed in 2014. The 200,000 square metre site will house a media training academy and state-of-the art production suites. Funding body twofour54 ibtikar offers start-up capital to creative businesses and entrepreneurs.
Meanwhile neighbouring Dubai’s 12 per cent share of regional advertising spend is second only to that of Egypt. It has several free zones dedicated to creative industries. Dubai Media City is home to heavy-hitting broadcast and publishing players, while International Media Production Zone is a $280m media production cluster that targets graphic arts, packaging and publishing companies. It expects to generate inward investment of up to $280m in packaging and publishing equipment. Then there is Dubai Studio City, a free zone cluster of production and film companies.
Last year the UAE generated $1.46bn-worth of advertising spend. That is a 27 per cent drop in ad spend from 2008: falling revenues from real estate advertisers have seen UAE advertising revenues shrink to 2007 levels. But industry watchers expect to see a 6-10 per cent increase for 2010. The Pan-Arab Research Centre (PARC) expects financial sector and telecoms advertisers to drive growth in ad spend.
In the Middle East, digital media accounts for just 1 per cent of ad spend. This is expected to increase by 79 per cent by 2020.
The GCC market for clothing is valued at an annual $12 billion. Studies by AC Nielsen ranked UAE residents top in its list of global buyers of luxury brands. UK retail and design brands are well established in the market, particularly in Dubai. Opportunities exist in luxury goods, childrenswear and accessories.
Demand is growing for consumer electronics in a market worth an estimated $2.8bn. Young UAE consumers are hungry for the latest video games, hand-held devices and laptops.
Event management opportunities in the UAE
Sports and event management is another new niche in which UK companies are well placed to help UAE event companies deliver.
One of the main barriers to entry is the way tenders are issued. UAE companies expect bidders to pay a deposit of E50,000-150,000 to submit a tender. This is a challenge for smaller players. The best solution for them is to team up with larger consortia.
Issues of copyright and parallel imports can also be a problem. In a survey published this summer, BSA-IDC reports an increase in levels of software piracy, rising from 34 per cent in 2006 to 36 per cent in 2009. TV piracy, too, remains a problem. Local publication Media Week Middle East estimates there are 1.5 million illegal set-top boxes in the GCC that allow viewers to watch pay TV for free.
Unauthorised imports are another issue. When Apple launched its iPad in the US this spring, unofficial imports allowed UAE online retailers to pre-empt the Middle East launch.
UK Trade & Investment is taking a proactive approach to finding UAE opportunities for UK creatives, Losecaat says. “There is no shortage of interest and the UAE has proved to be one of the best places to sit out the global recession,” she concludes. “Success requires interest and high levels of disposable income. The UAE offers both these things and is therefore a major emerging market.”