With a population of 97.5 million people and a GDP of about 2413 US$ per capita, Egypt is classified as a lower middle-income country by the World Bank. Since the 2011 uprising, the country's economy has declined, with lower growth rates and increasing levels of unemployment, amplifying the economic grievances of the Egyptian public that led to their version of an ‘Arab Spring’ in the first place. The government has still failed to address the economic downturn effectively, for example by reforming public finances, attracting external investments, introducing a flexible exchange rate regime, and expanding the private sector.
However, with a rapidly growing population and excellent access to foreign markets, Egypt has immense potential. But according to experts, the country needs to modernize its economy and establish a reliable social security net to ensure the most vulnerable parts of society are protected while reforms occur.
Attempts to nationalize and institutionalize the media sector
After dismantling the Arab Socialist system that former Egyptian president Gamal Abdel Nasser had created in the 1950s and ’60s, the country lacks a clear development model for the past 20-30 years. State-owned companies were sold off to people very close to the regime and media companies are no exception to this.
Moreover, the Egyptian media sector is undergoing a significant crisis, due to the loss of confidence of the public in the media and the current state of Egypt’s economy at large. The print sector suffers particularly of this situation and the circulation of the most popular newspapers dropped well under a million. After the coup in 2013, the government tried to nationalize the media sector by buying up some of the existing media companies or establishing new ones that many observers suspect are being funded and controlled by the state’s executive branches. This shows how much the government seeks to institutionalize online repression and restrict internet freedoms through legislation, while arguing this is a necessary evil to protect citizens’ and companies’ data. Such a regime of censorship also leaves a significant mark on the economic sustainability of the media sector.
Local online media dies, while US giants take it all
In a context where the blocking of websites is the most egregious worldwide – and also compared to other countries in the region, the situation for the online press is particularly precarious. Due to these economic effects, frequent waves of lay-offs of staff and closures of websites are the ultimate result.
At the same time, US-based tech-giants such as Google and Facebook account for 85% of the advertising market in Egypt in the online sector. As there is no public notion that news has a value for which people are prepared to pay, Egyptian media outlets cannot resort to subscription models to survive. By contrast, most of the digital media sector is subsidized either by the state directly or by powerful businessmen investing to influence public opinion, despite very high financial losses.
High losses in TV are state-owned
According to the new media and press laws, the state continues to finance state-owned media and press institutions that fail to make real profits from their media-related activities. Even worse, heavy financial losses need to be compensated through the state budget.
According to the Presidential Decree No. 567 of 2017, the state-owned Egyptian television sector lost more than 300 million US$ (5.5 billion EGP) for the 2015-2016 fiscal year, although some experts estimate this deficit being closer to 1 billion US$ (19 billion EGP). Despite this loss, the new media regulatory framework does not even attempt to reform the funding of the media institutions.
As a result of this maximum level of dependency on direct state funding, media institutions are subject to political interference in their editorial policies and content by the executive power.
Leading TV drama producer in the Arab world
According to a new research by the Jordan-based Arab Advisors group (www.arabadvisors.com), Egypt leads the TV production sector in the Arab world. The drama genre is the most popular and represented more than half of the production in 2017 and a third in 2018. But these number do not reflect the current crisis that the drama sector is now facing. With the state controlling more content producing channels, made-for-TV drama production is in fact declining. In 2017, when Tamer Morsy was appointed as the head of the Egyptian Media Group, he became de facto one producer exercising total control over a large portion of the existing distribution and exhibition outlets (state-owned TV channels and satellite TV Channels owned by Eagle Capital for Financial Investment such as ONtv and Al Hayah).
GDP (Gross Domestic Product) is defined as the total market value of all final goods and services produced within a country in a given period. GDP per capita is a useful unit to make cross-country comparisons of average living standards and economic wellbeing but is not a measure of personal income.
The data related to the proportion of TV drama in 2018 comes from the Arab Advisors report and is valid for the January-August 2018 period.