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“When we heard about the economic downturn we were all absolutely horrified, as you can imagine, starting a project like this. But we’ve been honestly, hand on heart, very pleasantly – and thankfully – surprised.”

So says Tony Orsten, CEO of Abu Dhabi’s media hub twofour54. It’s fair to say this probably wasn’t the environment the project expected to open in. Envisioned as a driving force and home for world class Arab media and entertainment content, twofour54 aims to make Abu Dhabi a regional center of excellence for businesses in areas such as broadcast, digital media, gaming, publishing, music and film.

The concept focuses on three areas: developing talent, helping new businesses, and providing world-class production facilities. It was officially launched in October 2008; about the same time the global economy was falling off the edge of a cliff. To mark his project’s first birthday, Orsten meets Communicate to tell us that business has actually been pretty good.

How has the global downturn affected twofour54?
Whenever you get into a situation about content creation and the effect of any sort of downturn, whether global, local or even sector specific, it’s interesting because content is content is content. People keep having ideas, and broadcasters still have to put shows out, movies still get made. Sentiment-wise, people have been just as keen to create here.
There are some very big media companies that have made the decision to create new content specifically about the region, and they’re doing it now. At the moment I’m seeing quite a lot of serious decisions being made about everything from big productions to series to new ideas. I feel quite good about it and I’m quite happy.
We’re offering people an opportunity to collaborate and create here in Abu Dhabi. Everyone from large media companies to small companies and individuals are very keen to do that here in the Middle East.

Did you witness any sort of slowdown?
The slowdown in ideas and people coming to talk to us was not really perceptible, though of course we have to bear in mind that we have no year-on-year figures yet. The slowdown is perhaps in the people that came here and thought, “Isn’t it wonderful? We can do everything here, from TV to the Internet.” They thought maybe they would bring 25 people over, but now have decided to hedge their bets and bring just 10 people over instead. Or they’ll move them from somewhere else, or slow down the hiring process. A little more caution is probably all we’ve seen.
In terms of ad revenue for television, for example, this part of the world has always been a bit of an odd one, and the amount of revenue derived from the audience has always been remarkably low. Ultimately I think there is still a long way to go in terms of getting proper value for the audiences that’s delivered by television here.
So the sentiment is, “Yeah, there’s a downturn here, but in the future the Middle East is still a great growth opportunity, particularly for advertising relating to television broadcast.” There are still channels being launched; there are still appetites for all sorts of different things that ultimately relate to advertising or sponsorship.

How does twofour54’s first year performance actually compare to forecasts?
It’s difficult to be 100 percent certain as to what has caused what, but overall there has been no massive difference to what we expected. There are little peaks and troughs here and there, but for us it’s different because we are new, we’re different, we’re exciting; there’s a lot of enthusiasm. Maybe the best thing is to wait until this time next year, because at the moment it’s difficult to tell.
When you’re doing a start up, particularly on this scale, you have a road map that you create at the early stages to try and follow, but it’s not rigid because what we’re doing is not usual. This isn’t a real-estate play, this is much more a service offering to sell to people’s creative sides and to big companies’ creative sides – if they have them. So it’s not easy to say, “Yeah, we thought we’d do this and then we’d have that.” It’s an ongoing, growing thing as we move forward, and each area is looked at as we move forward.
I’ve been in the business a ridiculously long time now and I’ve been through a few of these recessions, mostly in the UK and Europe, and I know that it all boils down to advertising revenue. In the West at the moment, because ad revenue is down by X percent, even just a few, it makes a colossal difference to the industry. Here, there is a relative downturn in growth of advertising revenue, no question about it, but it’s not from a vast number, and there are still enough entities in the MENA region that require content and will pay for it.

Has new media been a big area for twofour54 in its opening year?
There’s absolutely more of an interest in digital. But is it monetizeable? Not yet. The interest is there, but I’m not convinced the revenue stream is there yet. But also each country in the GCC and the MENA region has a different penetration for Internet broadband – some high, some low.
There will be a shift to digital though – probably quicker than it has happened in the West, is my best guess. And slowly the big companies are coming here to say, “OK, how do we jump on this bandwagon like we can with television advertising?”

Aside from digital, what is the future for media content creation?
I think the smart thing to realize now – and we’ve heard this from everywhere, and we’re working actively on this now – is that just going to broadcasters and pitching them ideas, and getting a relatively low budget and going away to make it is probably not going to be the first, or necessarily only, way of getting content made here. There are going to be a number of ways to move forward.
Advertising revenue is in the province of the broadcasters and media buyers and sales houses here, and there are many issues with that. What we have learned is that probably sponsorship, and the actual commercial brands entering into direct relationships with content producers, is quite likely to be a strong part of the future industry here. Not only for television, but across all the different aspects, including mobile, which has the most enormous penetration in the UAE, and all the other forms of dissemination.
I think that’s a very healthy thing, and I think it’s a wonderful opportunity to actually get those growth figures in terms of total ad revenue back up in the coming months and years.

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