Glynis O’Hara
WHAT do you do when there are two radio stations with substantially the same format, both wanting a slice of the airwaves?
Will it be overkill for listeners and too much competition for advertisers? Or should the discipline of the free market be left to sort out who will and who won’t survive?
These are the questions facing the Independent Broadcasting Authority after a hearing held in Johannesburg this week.
At the hearing, Africa On Air – a consortium which manages Highveld Stereo – raised strong objections to Solid Gold obtaining a broadcast licence, one of three for sale for the FM frequencies 99.2FM, 95.9FM and 102.7FM.
Africa on Air, which includes Primedia and a conglomeration of union investment companies including the powerful Mineworkers Investment Company, recently paid R320-million for Highveld Stereo.
Africa on Air director Nomhle Gcabashe questioned Solid Gold’s commitment to empowerment, despite its association with the South African National Civics Organisation (Sanco).
Solid Gold’s lawyer, Mark Rosin, replied that Sanco, which now has 20% of the station’s shares, has an option to acquire an extra 40% over the next four years, which would give it 60%.
If Solid Gold gets the licence, it will pay only an application fee of R30000 plus start-up costs of around R1-million. This is because it will be purchasing a new waveband, instead of buying an already existing station
“The point of buying an existing station for such a large fee is that you buy years and years of listenership identity and goodwill associated with a particular waveband,” said one observer.
The sum of R3-million, which Sanco was to raise as a loan for Solid Gold and which was a point of criticism, had been waived, said Rosin, adding that the station would now get that funding from banks.
“Solid Gold has pre-sold advertising in excess of about R8-million, so they are commercially viable from the moment they go on air,” Rosin said after the hearing.
Most of the time at the Carlton Hotel conference room was spent discussing the definition and parameters of “adult contemporary radio”, with Africa On Air asserting it included music from the early 1960s to the present time, aimed at the 25 to 49-year age group.
“There would, however, be no heavy metal or hard rock,” said Paul Ward, an American expert brought in by Africa On Air.
The concern was that Solid Gold’s format was exactly the same as Highveld’s, said Gcabashe, who drew considerable laughter when she later added: “We sit before you not because of any fear of competition.”
In reply, Solid Gold said there were, in fact, differences in format, in that over 50% of their music repertoire would be pre-1972, while “adult contemporary” encompasses all hit material from the last 30 years.
One of the Independent Broadcasting Authority (IBA) councillors, John Matisonn, commented it was interesting to note how often people not in the market demanded a free market, but once they got a licence they developed “a great appreciation” for regulation.
Nine applicants have put forward proposals for the three new frequencies being offered by the IBA. They are Virgin, Jazz FM, Classic FM, Solid Gold, Khaya, Win FM, Youth FM, Radio P4 and Radio Cidade. Radio P4 is a Norwegian consortium involving former Robben Island prisoners.
The IBA is due to make its ruling on the three new wavebands at the end of this month.