The company behind Auto Radio, the UAE’s only Russian-language radio station, expects its core audience to be unaffected by a weaker rouble and slower economic growth back home.
Some hotels say they will not reduce their targeted advertising spending on Russian language media despite a decline in tourists from Russia and CIS countries.
The UAE has about 25,000 Russian residents and about 400 Russian-UAE joint venture companies, according to the Russian embassy in Abu Dhabi. The community of Russian-speaking expatriates, including those from the former Soviet bloc countries, is considered to be much larger.
“Many of them feel the UAE is their second home, but no one was giving them the right access to entertainment and news in their own language,” said Alaa Nagawa, the managing director of Auto Radio, which is backed by Moscow-based Yashma Holding and is a franchise of Moscow-based VKPM Media. “The Russian crisis affects all service providers, such as hotels, here but we cater to Russian-speaking residents and they get salaries in the local currency.”
However, the number of Russian tourists to the UAE is dropping given the weaker rouble, which lost half of its value last year, and low oil prices. The Russian economy contracted 1.9 per cent in the first quarter of this year.
“There is definitely enough audience for a Russian-language radio station,” said Igor Egorov, the chairman of the Russian Business Council in Dubai, referring to Auto Radio. “It is just the beginning, but the pick-up is positive.”
Radio’s share of advertising in the UAE is expected to reach 11.9 per cent of total advertising spending this year, up from 11.2 per cent in 2009, according to the Arab Media Outlook report. This year the net advertising spending on radio is expected to reach US$94 million, up from $81m in 2009. Radio’s share of advertising spending is comparatively low, trailing that of television, newspapers and digital media, “partly because of the significant audience fragmentation”, the report said.
The UAE had 38 radio stations in 2011, among the highest in the Arab world, up from 24 in 2009. Residents of several ethnicities have fuelled the growth of the radio industry in the Middle East and North Africa, along with an increasing openness to the private sector, the report added. Among the stations dedicated to particular communities are Abu Dhabi Media’s Radio Mirchi, which launched in 2012, and Radio Shoma, launched in 2011 by Arabian Radio Network to cater to the Iranian expatriates.
Auto Radio, based in Ajman and Dubai with 18 employees, said its largest advertising segments were healthcare-related, such as dental clinics and hospitals, and from money transfer companies. The rest include hotels, airlines and automobile companies.
Passenger traffic from Russia and the Commonwealth of Independent States fell by 31.7 per cent year-on-year in March, according to figures from Dubai International Airport.
“The [Russian-speaking] market is down this quarter compared to the same period last year but we still get a good number of the guests,” said Jasmine Arika, the director of marketing and communications at Amwaj Rotana on Jumeirah Beach, Dubai. “We would advertise on Russian-specific media to gain an edge over competition, and there is a huge Russian community. We want to attract them for our food and beverage offerings and weekend stays.”
Some 40 to 50 per cent of the hotel’s guests are Russian-speaking, including those who come from other parts of the UAE and Dubai for staycations.
Yashma, whose main business is retailing jewellery, has earmarked $5m to fund Auto Radio’s first three years of operation, including its biggest costs – the fees for the frequency rental and rent for its studios. The company has spent Dh1.2m on promoting the brand in the past few months, including with outdoor advertising.
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