TBY talks to Bashar Kiwan, CEO of Al Waseet International-Al-Balad News, on the media sector in Lebanon, income channels, and the possibilities for franchising.
TBY How does freedom of the press and expression in Lebanon compare with countries in the region? How has the Lebanese press performed in responding to and covering the Arab spring?
BASHAR KIWAN Beirut has a vibrant media community with relatively high principles and is free from state control. The country is an exception compared to its Arab neighbors in terms of pluralism of the press and broad range of readers. However, the Lebanese press along with the Arab and Western media has been selective in its coverage of the Arab spring. Each one has its own agenda when it comes to the Arab revolutions. Only the new electronic social media such as Facebook, Twitter, and YouTube are credited with sparking and fanning the flames of the Arab revolutions and making a difference.
What trends have you noticed in the Lebanese market in recent years?
After a slowdown in 2005 and 2006, advertising spending in Lebanon has been growing—with 2010 a record year, exceeding all expectations despite fears of the global financial crisis affecting local spending. Although there is a general trend of summer dips and high clutter toward the end of the year, spending habits are slightly changing to peak around special events like Ramadan and Christmas. The advertising trends in Lebanon are theme-centered; brands go where the consumers’ consumption patterns are headed for the season.
What have been the main sources of income?
Our success centers on three fundamental key factors to best serve our advertisers and readers: developing local content, circulation based on subscription, and advertising sales. In Al-Balad Beirut, most of our revenues are generated from advertising and copy sale—40% copy sales mainly home subscriptions rather than point of sale, and 60% from advertising; this is our competitive edge over other dailies. The high market penetration and circulation rates indicate that the company’s strategic approach has thus far been a success. For instance, with 20 million weekly readers, Al Waseet is currently the only regional publication offering such wide coverage, with a cumulative market penetration of 77%. Although we still face competition in many markets, we remain nonetheless leaders in our category.
How much of your expansion will be based on franchising, and how much from official branches?
Franchising as a sustainable business strategy depends primarily on Al Waseet International’s (AWI’s) performance in the
media-advertising sector. The company is now able to detail business processes from marketing protocols to distribution methodologies. We have always explored franchising, even though most of our expansion is based on true ownership. Nevertheless, we are considering corporate investments to further expand our business models and brands.
What is the significance of your deal with TIME Inc. to launch Fortune Arabia?
Time Inc., over the past 80 years, has worked really hard to build a brand all over the world, and therefore chooses its local partners via a careful selection process. The process is implemented for all their licensees, which involves a pitch between several publishing firms. AWI was chosen because of the unique business model that it represents and the in-depth search for content excellence and credible news. Our deal consists of a long partnership over seven years to launch Time Inc. brands in the region, and we have started with Fortune in the UAE and Kuwait and they will be followed by Saudi Arabia, the Levant region, Qatar, Bahrain, and Egypt. Fortune Arabia is a mix between the premium international content of Fortune US and local content developed for and from the region. The objective is to publish an international title with local input and understanding written by local editors from the region who value the traditions and culture of the area. In past decades we have witnessed a change in the Middle East, with a clear tendency toward a corporate environment from family-owned or managed groups. This atmosphere represents a perfect surrounding for Fortune as it is directly linked with transparency and a more competitive atmosphere.
What innovations in the print media business model do you believe are needed in the age of the internet?
The online scene has created a new reality for the advertising world. In September 2010, we entered into a co-marketing agreement with Google whereby Waseet and Waseet.net offer their customers, in the MENA region, Google AdWords vouchers. We have always monitored market dynamics when introducing new products and solutions. Today there is reason to believe that the online advertising industry holds a lot of potential with a current global market size. This is why we are also planning to invest in some digital online properties related to strengthening and expanding the presence of our media across a market with a lot of potential.
What projects or acquisitions are in the pipeline for AWI?
There are many projects in the pipeline in different sectors and in different countries. With AWI’s experience and successful international expansion, no company is more fit to establish a lucrative business model that can be emulated and operated profitably anywhere in the world. Franchising, therefore, makes a lot of sense for AWI and has become a crucial step in the company’s ongoing development. It will undoubtedly take the AWI business model to the next level.
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