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Saturday, May 3, 2008
MTV muscles in on Mideast music market
It took us a half hour to drive from Sheikh Zayed Road in the center of Dubai to the Al Quoz Industrial Area where you\'ll find the headquarters of Arab Media Group or AMG. Their three-letter acronym will soon have a very familiar three-letter brand running right along side it, MTV.
The one you know is celebrating the launch of its 60th channel this weekend, 53 of those outside the United States. The other, AMG, gets a chance overnight to play in the big leagues of global media, with its 10-year partnership agreement.
A great deal has been said already ahead of the launch, but let me boil it down into three headlines:
· MTV is ready to enter a market of 50 music channels in the region
· Their lead music channel will be built around Hip Hop
· Two-thirds of the population in the Arab World is under the age of 25, so there is room to grow
What is equally important but often overlooked in the excitement about edgy programming and the rush for advertising dollars or in this case dirhams is what I call the third ‘D’, dialogue.
MTV sees itself as something much more than music television. It is a platform for debate to discuss drugs, health issues and can be a great vehicle to exchange cultures, music and ideas. Bill Clinton and Tony Blair jumped into MTV town hall meetings for the same reason advertisers choose this platform, to reach youth in their space.
Bill Roedy, MTV’s global ambassador since 1989, not only gets excited about rap music emerging out of Saudi Arabia, but the potential to break down barriers. “ I think often there are stereotypical views about the Middle East,” Roedy says, “And this will give us a chance to reflect this great culture and what I think is going to be a great product.”
His counter-part in the venture, Abdullatif Al-Sayegh the 30-something CEO of AMG, did the interview with me in the traditional Arab tobb, against the MTV graffiti studio backdrop. He talks about listening to the Arab youth and engaging them through entertainment.
“Just go with the language they understand, with the language that they believe in, with the way that they can understand you better. I am sure we can fill a lot of gaps between the West and the Arab World if we do this.”
Sounds worthy, but possible. How about the backlash against the message coming from what is clearly a western brand? Not a problem. The Virgin music store we went into was filled with a mix of Arab and western expatriate youth, thumbing through the latest offerings and perusing New York Yankee baseball caps. Downstairs in the shopping mall, teenagers and their parents lined up at Starbucks to get their iced lattes and blended fruit drinks.
So the lesson we may all learn out of the latest launch of MTV, is that many on the streets of the Middle East may not agree with U.S. policies in the region, but they do trust American brands and what they stand for – openness, edginess, and can we say it? Being hip. See this week\'s show.
The one you know is celebrating the launch of its 60th channel this weekend, 53 of those outside the United States. The other, AMG, gets a chance overnight to play in the big leagues of global media, with its 10-year partnership agreement.
A great deal has been said already ahead of the launch, but let me boil it down into three headlines:
· MTV is ready to enter a market of 50 music channels in the region
· Their lead music channel will be built around Hip Hop
· Two-thirds of the population in the Arab World is under the age of 25, so there is room to grow
What is equally important but often overlooked in the excitement about edgy programming and the rush for advertising dollars or in this case dirhams is what I call the third ‘D’, dialogue.
MTV sees itself as something much more than music television. It is a platform for debate to discuss drugs, health issues and can be a great vehicle to exchange cultures, music and ideas. Bill Clinton and Tony Blair jumped into MTV town hall meetings for the same reason advertisers choose this platform, to reach youth in their space.
Bill Roedy, MTV’s global ambassador since 1989, not only gets excited about rap music emerging out of Saudi Arabia, but the potential to break down barriers. “ I think often there are stereotypical views about the Middle East,” Roedy says, “And this will give us a chance to reflect this great culture and what I think is going to be a great product.”
His counter-part in the venture, Abdullatif Al-Sayegh the 30-something CEO of AMG, did the interview with me in the traditional Arab tobb, against the MTV graffiti studio backdrop. He talks about listening to the Arab youth and engaging them through entertainment.
“Just go with the language they understand, with the language that they believe in, with the way that they can understand you better. I am sure we can fill a lot of gaps between the West and the Arab World if we do this.”
Sounds worthy, but possible. How about the backlash against the message coming from what is clearly a western brand? Not a problem. The Virgin music store we went into was filled with a mix of Arab and western expatriate youth, thumbing through the latest offerings and perusing New York Yankee baseball caps. Downstairs in the shopping mall, teenagers and their parents lined up at Starbucks to get their iced lattes and blended fruit drinks.
So the lesson we may all learn out of the latest launch of MTV, is that many on the streets of the Middle East may not agree with U.S. policies in the region, but they do trust American brands and what they stand for – openness, edginess, and can we say it? Being hip. See this week\'s show.
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From Dubai to Doha
We took our programme on the road again this week to explore Dubai’s next wave business strategy.
There is a rich history of trading in Dubai which stretches back to the 1850s. It is a mindset which is at the heart of the Emirate’s business plan for the next quarter century. Take DP World, the trading division of Dubai World. It has forged 23 different deals stretching from China to Djibouti. This allows Dubai Inc. to place a corporate flag in each country, planting the seeds for future relationships and growth. This sounds simple, but it may be the key differentiating factor for the United Arab Emirates vis-à-vis its competitors in the Gulf.
This week I had a chance to take an in-depth look at some of the building blocks for the future and to take in some high-level analysis from some of the top political and business leaders in the region at two forums -- the Doha Forum on Democracy, Development and Free Trade and Business Week’s Middle East-China Leadership Forum in Dubai.
Pieces of the Puzzle
Over the weekend, I sat in a few business plan briefings at three divisions of Tatweer, itself a division of Dubai Holdings, the key development vehicle of the government. Dubai Land, Dubai Healthcare City and Dubai Industrial City fit into the next stage of growth. To be candid, it was hard to appreciate the scale of these projects. You might have seen the brands on the many flags, which flutter in the Arabian winds, but to see where they fit into the puzzle of this economy is quite a different perspective. I could write a column on each of the projects, but simply put, one represents sizable theme parks and residential real estate; another is a new approach to integrated healthcare which is sorely needed and the final piece an industrial hub to support the growth which is underway. The hotel, residential and retail hub Bawadi according to its Executive Chairman Saeed Al Muntafiq is worth $53 billion alone.
The industrial city is under construction; 55 square kilometres of real estate which has logistics facilities, land available for global and regional manufacturers to lease space and even low income housing for laborers. This is to address one of the thorniest issues facing the governments in the region; that is to take care of the thousands of workers, primarily from South Asia who have been imported into the U.A.E.
If you take a step back, one can see the industrial logic of all the blueprints and buildings to come. Hotels, golf courses and villas are built to attract visitors and residents. The largest airport in the world is being constructed to bring tourists in and the industrial city will be there to support light industry which has expanded to accommodate the growth. The division managers of these projects smile when asked about the original feasibility studies presented by consultants for all these projects. They were rejected, I am told, by the Ruler of Dubai and now Prime Minister of the United Arab Emirates. It is obvious after this week in the region that the bar is set very high.
Dubai seems to be sprinting to stay ahead of its Gulf neighbors who are now constructing their own visions of the future. On the final approach after a 40 minute flight to Doha from Dubai, one can witness how Qataris plan to expand to more than a million people. The Pearl is the giant project on the cards. Like Dubai, Qatar realizes that trained workers and graduates will be needed to fill the buildings and map out the strategies for the future. The first graduates from the Qatar Foundation campus of four university programs with links to the West will commence May 6th. This is encouraging.
New Culture of Globalization
While the small but wealthy Gulf emirates expand, the sizable players of the Middle East are benefiting from what Turkish Prime Minister, Recep Erdogan called “the new culture of globalization.” Since coming to power in 2003, foreign direct investment has surged from $1 billion to $22 billion. Turkey has not only a large population, but is able to look East and West as an export hub for Europe and the Middle East. Egypt is enjoying similar growth in FDI. This is the benefit of greater integration.
U.A.E. officials say they mapped out their blueprints not on the 40 million people of the Gulf, but the 310 million people of the Greater Middle East Free Trade Area or GAFTA. They have tapped into years of pent up demand, especially after many residents repatriated their savings and assets after 9/11. While consultants may want to be conservative with their project studies presented to their clients in the Gulf, the leaders in the region have no plans to heed that advice.
With oil at $110 or more per barrel, it is full steam ahead.
There is a rich history of trading in Dubai which stretches back to the 1850s. It is a mindset which is at the heart of the Emirate’s business plan for the next quarter century. Take DP World, the trading division of Dubai World. It has forged 23 different deals stretching from China to Djibouti. This allows Dubai Inc. to place a corporate flag in each country, planting the seeds for future relationships and growth. This sounds simple, but it may be the key differentiating factor for the United Arab Emirates vis-à-vis its competitors in the Gulf.
This week I had a chance to take an in-depth look at some of the building blocks for the future and to take in some high-level analysis from some of the top political and business leaders in the region at two forums -- the Doha Forum on Democracy, Development and Free Trade and Business Week’s Middle East-China Leadership Forum in Dubai.
Pieces of the Puzzle
Over the weekend, I sat in a few business plan briefings at three divisions of Tatweer, itself a division of Dubai Holdings, the key development vehicle of the government. Dubai Land, Dubai Healthcare City and Dubai Industrial City fit into the next stage of growth. To be candid, it was hard to appreciate the scale of these projects. You might have seen the brands on the many flags, which flutter in the Arabian winds, but to see where they fit into the puzzle of this economy is quite a different perspective. I could write a column on each of the projects, but simply put, one represents sizable theme parks and residential real estate; another is a new approach to integrated healthcare which is sorely needed and the final piece an industrial hub to support the growth which is underway. The hotel, residential and retail hub Bawadi according to its Executive Chairman Saeed Al Muntafiq is worth $53 billion alone.
The industrial city is under construction; 55 square kilometres of real estate which has logistics facilities, land available for global and regional manufacturers to lease space and even low income housing for laborers. This is to address one of the thorniest issues facing the governments in the region; that is to take care of the thousands of workers, primarily from South Asia who have been imported into the U.A.E.
If you take a step back, one can see the industrial logic of all the blueprints and buildings to come. Hotels, golf courses and villas are built to attract visitors and residents. The largest airport in the world is being constructed to bring tourists in and the industrial city will be there to support light industry which has expanded to accommodate the growth. The division managers of these projects smile when asked about the original feasibility studies presented by consultants for all these projects. They were rejected, I am told, by the Ruler of Dubai and now Prime Minister of the United Arab Emirates. It is obvious after this week in the region that the bar is set very high.
Dubai seems to be sprinting to stay ahead of its Gulf neighbors who are now constructing their own visions of the future. On the final approach after a 40 minute flight to Doha from Dubai, one can witness how Qataris plan to expand to more than a million people. The Pearl is the giant project on the cards. Like Dubai, Qatar realizes that trained workers and graduates will be needed to fill the buildings and map out the strategies for the future. The first graduates from the Qatar Foundation campus of four university programs with links to the West will commence May 6th. This is encouraging.
New Culture of Globalization
While the small but wealthy Gulf emirates expand, the sizable players of the Middle East are benefiting from what Turkish Prime Minister, Recep Erdogan called “the new culture of globalization.” Since coming to power in 2003, foreign direct investment has surged from $1 billion to $22 billion. Turkey has not only a large population, but is able to look East and West as an export hub for Europe and the Middle East. Egypt is enjoying similar growth in FDI. This is the benefit of greater integration.
U.A.E. officials say they mapped out their blueprints not on the 40 million people of the Gulf, but the 310 million people of the Greater Middle East Free Trade Area or GAFTA. They have tapped into years of pent up demand, especially after many residents repatriated their savings and assets after 9/11. While consultants may want to be conservative with their project studies presented to their clients in the Gulf, the leaders in the region have no plans to heed that advice.
With oil at $110 or more per barrel, it is full steam ahead.
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Damaging dollar
There are many policymakers in the current White House who’ve silently supported a weaker dollar policy for the second term of the Bush Administration. This, the argument goes, helps support U.S. exports. True, but the downside risks today are percolating on many fronts. One can make a solid case that the common thread, which weaves through the financial markets today, is the weak dollar.
President George W. Bush was quick to criticize the 13 members of OPEC this week for not increasing oil output at their meeting in Vienna. That may be politically palatable but it seems to be short on economic realities. There is at most, as numerous leaders and analysts have outlined on our program, 500 thousand barrels of spare oil capacity within the cartel and that is not enough to drive prices down from their historic highs.
The culprit is the weak dollar. As a bet against dollar-based assets, global liquidity pools controlled by global fund managers have put money into the oil market. So the record prices we are seeing today are in part driven because these managers are looking for a more attractive return for their money.
A similar story is playing out with the hard commodities – gold, platinum, silver, iron ore. The $100 barrier for oil has been broken and gold appears to be on its way to the $1000 an ounce with its record run.
Don’t get me wrong; pressure from the developing world is intense. Countries within the broader Middle East are growing nicely and this is true from Dubai to Shanghai, from Kiev to Kuala Lumpur. As this band of growth from the Middle East to the Far East continues to expand, the pressure for the entire basket of commodities will continue to grow. But a strong dollar policy based on sound budget management in Washington would likely take out the top 20 percent of these record highs.
Keep tapping the wealth
There is a less obvious, sidebar story that has been a result of the soft dollar policy and that is the hunt for better returns by the giant and still growing sovereign wealth funds of the Gulf countries. When the dollar was solid, these funds were quite happy to park their money into the U.S. dollar and U.S. bonds. That is not the case anymore. With the coffers overflowing from $100 oil, they are re-deploying their assets around the globe, in U.S. and European equities, property deals and utility companies.
This had many crying foul, but the rhetoric this week toned down considerably. As European Commissioner Charlie McGreevy noted on our program, the debate changed a great deal in the last year. “From being looked upon as, I say \'pariahs\' as it were, a year ago. I think people are now looking at it in a more balanced way and I think we\'ve had a more balanced discussion now then we would have had one year ago.”
This is true in part because Europe and the U.S. actually need the funds as almost lenders of last resort. As a result, both the European Union and the U.S. Treasury are both talking about a voluntary code of conduct for sovereign wealth funds. The Gulf money managers I have spoken to scratch their heads and wonder out loud what that means in practice. But again, a whiff of cooperation seems to be in the air. The Chief Executive of Dubai International Capital Sameer Al Ansari said this week: “There’s little question that there needs to be more transparency.”
While a center ground is being found, the funds garnered a big vote of confidence from Warren Buffet who moved to the number one slot on the Forbes wealthiest people list. Buffet pointed the finger back to Washington: “This is our doing. Our trade equation guarantees massive foreign investment.”
As the Oracle of Omaha noted, the weak dollar may have helped sell goods abroad, but it has meant that, not only does the trade balance need to be financed, all the other products up for sale – especially banks and buildings – look like a bargain.
President George W. Bush was quick to criticize the 13 members of OPEC this week for not increasing oil output at their meeting in Vienna. That may be politically palatable but it seems to be short on economic realities. There is at most, as numerous leaders and analysts have outlined on our program, 500 thousand barrels of spare oil capacity within the cartel and that is not enough to drive prices down from their historic highs.
The culprit is the weak dollar. As a bet against dollar-based assets, global liquidity pools controlled by global fund managers have put money into the oil market. So the record prices we are seeing today are in part driven because these managers are looking for a more attractive return for their money.
A similar story is playing out with the hard commodities – gold, platinum, silver, iron ore. The $100 barrier for oil has been broken and gold appears to be on its way to the $1000 an ounce with its record run.
Don’t get me wrong; pressure from the developing world is intense. Countries within the broader Middle East are growing nicely and this is true from Dubai to Shanghai, from Kiev to Kuala Lumpur. As this band of growth from the Middle East to the Far East continues to expand, the pressure for the entire basket of commodities will continue to grow. But a strong dollar policy based on sound budget management in Washington would likely take out the top 20 percent of these record highs.
Keep tapping the wealth
There is a less obvious, sidebar story that has been a result of the soft dollar policy and that is the hunt for better returns by the giant and still growing sovereign wealth funds of the Gulf countries. When the dollar was solid, these funds were quite happy to park their money into the U.S. dollar and U.S. bonds. That is not the case anymore. With the coffers overflowing from $100 oil, they are re-deploying their assets around the globe, in U.S. and European equities, property deals and utility companies.
This had many crying foul, but the rhetoric this week toned down considerably. As European Commissioner Charlie McGreevy noted on our program, the debate changed a great deal in the last year. “From being looked upon as, I say \'pariahs\' as it were, a year ago. I think people are now looking at it in a more balanced way and I think we\'ve had a more balanced discussion now then we would have had one year ago.”
This is true in part because Europe and the U.S. actually need the funds as almost lenders of last resort. As a result, both the European Union and the U.S. Treasury are both talking about a voluntary code of conduct for sovereign wealth funds. The Gulf money managers I have spoken to scratch their heads and wonder out loud what that means in practice. But again, a whiff of cooperation seems to be in the air. The Chief Executive of Dubai International Capital Sameer Al Ansari said this week: “There’s little question that there needs to be more transparency.”
While a center ground is being found, the funds garnered a big vote of confidence from Warren Buffet who moved to the number one slot on the Forbes wealthiest people list. Buffet pointed the finger back to Washington: “This is our doing. Our trade equation guarantees massive foreign investment.”
As the Oracle of Omaha noted, the weak dollar may have helped sell goods abroad, but it has meant that, not only does the trade balance need to be financed, all the other products up for sale – especially banks and buildings – look like a bargain.
What do you think? Email us at mme@cnn.com, or click on "add a comment" below.
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Thailand proposes rice cartel idea
Thai Prime Minister Samak Sundaravej piqued global interest this week when he suggested the formation of a rice cartel with other producers, a government spokesman said.
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