Beirut, Asharq Al-Awsat- Earlier this month, the Kingdom Holding Company (KHC), chaired by Saudi businessman HRH Prince Alwaleed Bin Talal, issued a statement announcing the company’s merger with the Lebanese Broadcasting Corporation satellite channel (LBCSAT). Founded in August 1985, the Lebanese Broadcasting Corporation International (LBCI) was launched globally in 1996.
Prince Alwaleed, who owns 93.5 percent of KHS’s shares, had formerly bought a 49 percent stake in LBCSAT in 2003. The prince also owns Rotana records; the largest record company in the Middle East, which has expanded to become a giant media powerhouse and presently includes a film production company, a magazine, record label and satellite television channels, among others.
The two Arab television networks, LBCSAT and Rotana, have merged into what is anticipated to become the Middle East’s most influential media venture to date. According to the issued joint statement, “Although the two entities will remain organizationally and financially independent, they will work closely to create an integrated platform of television channels that aim to provide viewers with wider choices, greater diversity and higher quality.”
The statement added that Founder, Chairman and CEO of LBC, Sheikh Pierre El Daher, aside from fully managing the LBCSAT channels, will also oversee over the management [of content] for all of Rotana’s channels. These channels will include: Rotana Clip, Rotana Musica, Rotana Khalijiya, Rotana Tarab, Rotana Cinema and Rotana Zaman [the latter two are movie channels].
Furthermore, the statement stressed that the decision to merge, “will not affect the identity or content of LBC”, adding that it more of a “merger of resources”.
El Daher confirmed to Asharq Al-Awsat that this new development will rely on “coordination” between the networks’ channels so as to prevent a clash of times when two major shows air on different channels, for example.
The statement, which was reported by Reuters, maintained that the network will be listed in the United Arab Emirates’ (UAE) stock markets, rather than the Saudi Arabian markets.
Commenting on this point, eminent media professor, Dr. Mahomoud Tarabay said, “There is an incredible proliferation of Arab satellite channels, which were estimated by ‘ArabAd’ magazine to number 263 channels, while the Arab Television Union in Tunisia approximated them to be 291 channels. This indicates that quantity has triumphed at the expense of quality. Confronted by this new reality, it is necessary to reach a stage in which there is a “survival of the fittest”. This paves way for what is known as mergers between stations.”
He added that, “This phenomenon, which has emerged in the world of Arab media follows the same course as foreign media, which is moving towards media mergers. This, in turn, is a result of the economic mergers in most of the major states, including France, Italy and the United States … where private companies dominate over this sector.”
Media and advertising expert, Ramzi al Najjar described this merger between the two institutions as a “cohabitation” rather than a “marriage”.
“We cannot consider it a merger inasmuch as an agreement to establish common ground between the two stations, whilst maintaining the individuality and particularity of each one,” al Najjar told Asharq Al-Awsat.
As such, al Najjar views the agreement as ‘circumstantial’ and based on the short-term common interest of the two parties. Meanwhile, al Tarabay argues that this merger will cast positive light on these groups since it will unite between the human resources and the technical and technological expertise of both, which would result in better quality television production, whilst eliminating the inferior stations. This will reflect on the viewer who will receive a superior level of production, thus leading to the emergence of high-quality satellite television channels.
However, al Tarabay is quick to point out that, “the situation in the Arab countries is different than that of foreign countries in terms of the diversity of trends on all levels. This is why they lack the singularity that characterizes foreign institutions. Today we witness opinions and counter-opinions represented by each group, in addition to political camps and confrontations through the media.”
“However, political differences in Arab countries do not affect the amicability [between them], as the contradictions converge when it comes to interests and money regardless of the different political views held,” added al Tarabay. This is why he upholds that this type of merger will boost, rather than eliminate, competition between stations, which in turn would encourage other channels to follow in the same steps.
He said: “the management of Roatana and LBCSAT has made a shrewd decision of which the positive repercussions will soon emerge, and thus it will motivate similar moves in the world of Arab media.”
Al Najjar agrees with this and believes that mergers between Arab satellite stations, whether the intentions are fully commercial, or even political or personal, are still valid on a media level, especially since the rapid proliferation of Arab satellite channels was never studied from the start. Rather, it was an experiment in the audiovisual sector, which led to an imbalance between the number of viewers as opposed to the number of satellite channels.
“The validity of this agreement lies in the fact that it constitutes a form of partaking in advertising quotas and a share of viewers, especially if it is founded on a systematic and studied vision that focuses on the power of the two stations,” stated al Najjar. Based on that, al Najjar concluded that the advantage would lie in fewer expenses in cost, and greater profits.
Al Najar affirmed that this agreement will serve as a good example that could motivate and encourage a large number of Arab stations, especially the satellite channels, to follow suit. “I would wager on Pierre El Daher’s success in this task provided he is granted all the necessary powers,” he said.
Meanwhile, al Najar argued that there may be factors that could affect the individuality of each station if the goals are political or if the channels are terrestrial, for example. He stressed that this will happen with Rotana and LBCSAT since the agreement is limited to the satellite channel [LBCSAT] rather than the local one [LBC], which will not be affected by this merger.