Iran: The Potential To Offset MENA’s Economic Slowdown

As the world economy gears up for what is another year of mixed news, ZenithOptimedia has taken a closer look at newer markets that unified in their promise of growth. The ‘Thirty Rising Media Markets 2016’ are a diverse bunch, from the very closed and politically tightly controlled such as Laos; through a large number of nations on the African continent which have seen a sudden improvement in digital infrastructure courtesy the landing of several new submarine intercontinental fibre optic cables over the past few years or indeed Iran, fresh from its welcome back into the international fold following the suspension of UN sanctions in January 2016.

The ‘Thirty Rising Media Markets 2016’ report reminds that Iran’s economy is poised to accelerate after the lifting of international sanctions in January 2016. Iran can now sell its oil freely on international markets, and use the global financial system for trade. This will provide an immediate stimulus to the economy, but will not in itself alleviate its underlying problems: poor infrastructure, unemployment and low productivity, stemming from heavy state control and widespread ownership of businesses by entities that are nominally private but are closely associated with the state. These problems will need reform and foreign investment to address, both of which are more likely now that sanctions have been lifted.

Iran has a large, well-educated and young population of nearly 80 million, producing a GDP per capita of USD 6,000 a year and rising rapidly. The IMF expects 4 percent annual growth in GDP over the next few years, leading to a GDP per capita above USD 8,000 in 2018.

Iran’s advertising market is underdeveloped, for several reasons – particularly the large state and quasi-state involvement in the economy, and a relative lack of international brands, which can be charged large premiums for media space. Zenith estimates that ad market was worth about USD 1 billion in 2015, which was just 0.23 percent of GDP – a third of the international average. “We expect this proportion to rise as Iran reintegrates into the global economy, and this distance it has to make up to reach the international average highlights the long-term potential of the ad market,” the report quotes.

As is known, all broadcasting in Iran is controlled by the state owned Islamic Republic of Iran Broadcasting (IRIB), which operates several television channels and radio stations at the provincial, national and international levels. It is illegal to own a satellite dish in Iran, but the law is widely ignored. Different reports estimate that 40 percent to 70 percent of households have access to satellite television. The BBC Persian channel, and the Dubai-based GEM TV and Farsi 1 channels, are said to be particularly popular.

There are more than 300 newspapers in Iran, but most have low circulation and an erratic publication schedule, and there are perhaps 15-20 major national dailies. Most newspapers are funded by politicians, political parties or other organizations associated with the state. Prominent titles include Jaam-e Jam (which is published by IRIB), Ettelaat, Kayhan, Hamshahri, Resalat, Jomhouri Eslami, E’temaad, Iran Daily, Tehran Times and Iran News, the last three of which are published in English.

Around 57 percent of the population access the internet regularly. Websites are subject to speed limiting and censorship by the government.