Abu Dhabi has far more money than people. There's more than $1 trillion invested in the city, which had an estimated population of 860,000 in 2008, according to Wikipedia.
Now Rupert Murdoch may be about to pump his own money into the oil-rich emirate.
The News Corp chairman and Google's Eric Schmidt are both in Abu Dhabi for the Abu Dhabi Media Summit organized by the Abu Dhabi Media Company. And both sound excited.
Schmidt makes a pitch for creativity and imagination in an article in The National, the Abu Dhabi newspaper published by the company.
No, it's not lifted from another newspaper or a syndicate, which is what the Straits Times does when it publishes articles by famous columnists like Paul Krugman, Joseph Stiglitz or Timothy Garton Ash.
This is an exclusive about the web and the opportunities it brings. Schmidt writes:
The economist Joseph Schumpeter famously observed that capitalism inevitably leads to a “perennial gale of creative destruction”. This next gale is going to be bigger than ever…
Think big in everything you do…
When computing and information are limitless, the only barrier to success is a lack of imagination. Fortunately, imagination is a free and plentiful resource, and the organisations that best tap into it will shape the coming decades.
Think big. That is what Abu Dhabi is doing, and it is paying off. It is poised to become a media hub.
Murdoch sees Abu Dhabi as a key location in his plans to expand in the Middle East, reports The National.
Fox International Channels, a subsidiary of News Corp, is making Abu Dhabi its regional hub for online advertising sales, documentary production and satellite television broadcast.
It will set up a high-definition and 3D documentary film production office in Abu Dhabi.
Fox will also shift the broadcast of at least 10 of its 12 channels in the Middle East from Hong Kong to Abu Dhabi. These channels fall under the Fox, Star and National Geographic brands. "The closer you are to your audience, the faster you can be at reacting to time-critical elements," said Fox International Channels chief executive David Haslingden.
The move comes after Fox teamed up with Abu Dhabi Media Company (ADMC) last year to launch the world’s first free-to-air National Geographic channel.
New money and old
ADMC was set up by the Abu Dhabi government with an initial capitalization of about $27.3 million three years ago, according to Wikipedia. Besides newspapers and broadcasting, it has also entered the movie business. The Bollywood blockbuster, My Name Is Khan, starring Shah Rukh Khan, is backed by Murdoch's Fox Star Studios and the ADMC subsidiary Imagenation.
It's an upstart compared with Singapore Press Holdings, publisher of the Straits Times, which will be 165 years old in July. The newspaper's venerable age is matched by its publisher's deep pockets. The company had an operating revenue of S$1,301 million (about $930 million) in the financial year 2009.
But has it organized anything like the Abu Dhabi summit, with attendees like Murdoch and Schmidt?
It's true Murdoch is not universally popular.
His Wall Street Journal has had run-ins with the Singapore government.
He is also no friend of free news websites and public service broadcasting. The BBC is being forced to make cutbacks partly because of him.
But he creates new business and is not omnipotent everywhere like he is in Britain. He has business interests but is not a major player in India, for example.
Foreign media in Singapore includes the BBC, Bloomberg and Reuters. There's a new Universal Studios theme park on Sentosa. Singapore is also investing in the new media, attracting the likes of Lucasfilm and Electronic Arts.
Location, location, location!
Singapore has bigger ambitions, though, as a financial centre, as which also it is No 2 to Hong Kong. George Soros plans offices in Hong Kong while Murdoch has set his sights on Abu Dhabi.
This may be due to geography. Abu Dhabi can be a gateway to the Middle East while Hong Kong and Singapore are both part of Asia Pacific, with Hong Kong plumb next to Asia's biggest market, China.
Murdoch stressed something else, however, in his keynote speech at the Abu Dhabi Media Summit. He said:
As I speak, there is a powerful wind blowing through this region. This wind is the creative energies of your people, who are aching to make their own mark on the world around them…
Human creativity flourishes in freedom.
As a businessman, of course, he knows he cannot be too particular.
The United Arab Emirates, of which Abu Dhabi is the capital, ranked 86th in the Reporters Without Borders 2009 Press Freedom Index while Singapore ranked 133rd. Hong Kong was 48th.
Protectionism bad, says Murdoch
But Murdoch was speaking from his own experience when he claimed a free market is good for the media. He said:
Sometimes nations seek to promote their own creative industries by limiting foreign participation and protecting local producers…
Unfortunately, when that happens you are also making your market smaller and less competitive. Japan is a good example of a modern nation with a protected — and limited — creative sector. As a result, Japanese citizens pay higher prices for more limited fare… And Japanese culture is denied the global voice that a nation which boasts the world’s second largest economy ought to have.
In short, creative protectionism is as destructive as other types of protectionism… it guarantees that local companies coddled by protection will never be strong enough to compete outside their own borders.
By contrast, if you open your creative market up to competition, your companies can challenge the biggest players. I have seen it done. Most of you probably think of News Corporation as an American company, because we are now based in New York. But we did not start out this way.
We started in a provincial Australian city called Adelaide. When I brought our company to America, we were still a small Australian firm. We had a few media properties in Britain – and a single newspaper in San Antonio, Texas.
We succeeded because the open American economy let us compete on our talents. So we grew. And as we grew, we expanded our reach and influence to other parts of the world — and created thousands of jobs. Today News Corporation has 64,000 people working for us across the globe – and many thousands more working for us indirectly.
Murdoch's critics will say conglomerates like News Corp have driven smaller companies to the wall.
But one reason why Asian media companies like Singapore Press Holdings don't have the same impact as the Western media is protectionism.
Singapore Press Holdings reported a net profit of S$145 million ($103 million) for the quarter ended in November 2009 while the New York Times Company remained $769 million in debt at the end of the fourth quarter of 2009.
Despite all its problems, however, the New York Times is one of the most influential newspapers in the world.
Protectionism has made Singapore Press Holdings a monopoly, with a stake in all the newspapers published in Singapore. But it doesn't have an impact abroad because other Asian markets are similarly protected or restricted.
Asian governments have their own reasons for following the media policies they do.
And Singapore can attract more money as a financial centre than as a media hub.
That's clear from the 2009 Fortune 500 list , based on revenue and profits.
Time Warner was the top media company, ranked 48th, far behind Bank of America (11th), Citigroup (12th), Berkshire Hathaway (13th) and JP Morgan Chase (16th). News Corp was 70th. Exxon Mobile was first and Wal-Mart second.
But the media business is bound to grow with new technology, no matter what happens to the newspaper industry. As Murdoch said:
What is a Kindle or an e-reader worth without books or newspapers or magazines to read on them? What is a cell phone without the access to e-mail, the photos of your children or your favourite websites? What is the most advanced high-definition TV without the dramas and comedies and news and sport to watch on it?
The answer is this: Without creative content, these electronic devices are merely expensive playthings.
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