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It’s been a long time coming; about five years to be precise. But Saudi Arabia has finally started awarding licenses in the kingdom to private radio operators. The latest was awarded just last month; Riyadh Electronic Resources secured the fourth new license this year at a cost of 68 million Saudi riyals.
The whole process is being heralded as the beginning of a new era in Saudi radio, and comes years after companies such as Rotana (also recently awarded a license) began pushing for a more liberal and competitive Saudi radio market.
The first new license was awarded at the end of January to Alf Alf, a Saudi Arabian media company that produces a newspaper and is planning to launch a television station, for the price of 75 million Saudi riyals. The second was granted two weeks later to Ghayat Al Ibdaa Innovation Holding for 66 million Saudi riyals, and the third one in early March to Rotana for 67.35 million Saudi riyals.
The four companies are entering a market that has been monopolized by MBC since 1994, and it’s a change that the media industry is very much looking forward to. “From a buyers’ perspective, the more the merrier,” says Choucrallah Abou Samra, managing director of OmnicomMediaGroup in Jeddah.

MARKET GAINS. Mazen Fakhoury, managing director of Mindshare in Saudi Arabia, agrees that the more choices are available, the more interesting work becomes for those in the advertising and communications industry.
“By having a competitive market, we will have more variety of content and much more innovation, and ultimately consumers will gain from that,” he says. “And advertisers will gain by having more options to reach consumers and more interesting ways of reaching them, and from a media buying unit perspective, we have a medium that is going into an interesting phase.”
“This is where you play around with negotiation tactics and you put vehicles against each other,” says Abou Samra. “From a buyer’s perspective, the more you have the more you negotiate, and from a planner’s perspective, the more you have the more it will increase fragmentation. This is where analysis of research becomes critical, to assess which is the best vehicle for reaching your target audience.”
Firas Khashman, general manager of emerging business at Rotana, says he expects that the Saudi radio market will grow rapidly once the new stations begin operating (which is expected to be in about six months), simply because it could not grow while it was dominated by MBC.
“Because they were alone in the market, MBC didn’t have to compete and be the best,” says Khashman. “We believe what is currently being offered in the market is not really up to the expectations of listeners, as Saudi listeners deserve to have the choice to listen to more than one offering. MBC will now be obliged to work on their offering. “
Khashman adds that, with MBC currently monopolizing the market, the media giant isn’t making an effort to attract what he calls the “neighborhood advertiser.”
“Usually, radio advertisers are not only big companies; there are small businesses here and there that rely on radio stations, and this happens the world over,” he says. “MBC is not doing that; their spot prices are very high, and they are already sold to those who can afford them.”

POTENTIAL UNLOCKED. Mindshare has started approaching clients already, and Fakhoury says that the awarding of the licenses to private radio operators will unlock the potential of the medium in Saudi Arabia.
“We are proactively waiting and seeing,” he explains. “We are doing our homework while we wait for the mediums to be ready. Radio deserves the same attention as digital does, so we are having conversations with our clients, and even doing some number crunching. The only thing that is limiting us is that we don’t know what the content will be, and how the stations will position themselves. Once we know the quality of the content, we’ll take it from there.”
Rotana has a great advantage over other license winners in terms of ad sales because they have an in-house media buying company, Rotana Media Services, which covers the region extensively. “We can now offer Rotana radio in Saudi Arabia with other radio stations as packages, or with television channels like our Fox channels, and we also have outdoor media,” says Khashman. “So it will be a comprehensive package for any regional advertiser.”
The Saudi radio market is undoubtedly about to change, and Abou Samra says that if newcomers come on board with a compelling offering, then existing stations (MBC FM and MBC Panorama) will lose audiences. At Rotana, Khashman says the company’s policy is to localize every station it operates, making Rotana Lebanon different from Rotana in Jordan or in Syria. “Saudi Arabia will be the fourth market that we operate in, and it will have a local touch along with the support of our head office in Beirut. We believe Rotana radio will be the number one radio station in the kingdom, as we are expecting to attract a big share of the market.”
A very positive Fakhoury says that Mindshare is “very excited” by the opportunities that the licensing scheme will bring forth. “We’re really looking forward to this, and we believe in the process that’s been put out,” he says. “Consumers will definitely gain from it, brands will gain from it, and the media will gain from it; it’s a win-win situation for everybody.”

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