Stan Katz
There has been much criticism, debate and misinformation surrounding the sale of six SABC radio stations and the role of the Independent Broadcasting Authority in the process. This is a pity because the environment which will ultimately be created, will in all likelihood, be much healthier for broadcasters.
The IBA is faced with the difficult task, not just of re-regulating, but, in effect, of creating a broadcasting industry which previously consisted of one independent and a number of state-owned radio stations.
In the process, critical issues such as transformation of ownership, encouragement of free enterprise locally, the ability to compete internationally and the necessity to maintain freedom of speech, had to be addressed.
Perhaps most importantly, the IBA had to ensure that broadcasting in this country does not become a cottage or informal industry — that it attracts the necessary financial investment and human capital to make it viable and stable.
It is worthwhile noting that the IBA avoided imposing onerous conditions on this fledgling industry which could have strangled it from the outset, and has allowed it to regulate itself, the hallmark of democratic free enterprise.
What can we expect to see over the next few years? Certainly, while the SABC will remain the biggest on the block, the South African public will be serviced by a range of stations catering to a diversity of niche markets —in Gauteng alone there will be some seven commercial radio stations.
If the bidders for the stations are anything to go by, we will see a rapid transformation of ownership which will combine existing expertise in broadcasting and a new world view.
As an example, the consortium in which Primedia Broadcasting has a 40% stake, represents, we believe, a powerful force which has identified broadcasting as a growth industry which will best serve the interests of its constituents, and picked the best team and the best assets to achieve its vision.
These stations can be expected to have a multiplier effect in developing opportunities for support industries, transfer of skills and job creation.
Adspend on radio can be expected to increase, especially in relation to a total adspend, as advertisers have access to more immediate and focused media which are competing in an open market for the advertiser’s rand. This is certainly the international experience.
In Britain, for instance, broadcasting’s share of the total cake has doubled from 2% to 4% since the airwaves were freed up.
While there has been some criticism of the price which the consortium expects to pay for Highveld and KFM, we in turn were amazed that other bidders set so little value on that scarcest of asserts — South African radio stations with established advertising bases, formats, audiences and above all, highly profitable business.
As more stations come on line, South Africans can also expect to have access to much greater diversity of opinion, and that will act as a further bastion to our budding democracy and the principle of free speech.
Once the bidding and the licensing process has been finalised, I believe, a strong foundation will have been laid for a vigorous local industry with exciting prospects.
Stan Katz is chief executive of Primedia Broadcasting, a division of Primedia Limited which is owner of Radio 702. Katz has led the transformation of Radio 702 from a music station to talk radio