Media stocks stink because the media sector is moribund. With adspend and profits up at most radio stations, yet share prices remaining static, there’s an obvious need for restructuring. So can the National Association of Broadcasters (NAB) drive the process?
The answer is probably not. How can a single body purport to represent the interests of both the SABC and the private sector broadcasters?
The NAB came into being in the mid-nineties with the object of fostering the growth of broadcasting in South Africa. Liberalisation of the airwaves was just beginning and the players wanted to be able to speak with a single voice. More importantly, they wanted to be taken seriously. At the time, it seemed critical that the NAB be representative of all broadcasters, including the SABC.
Therein lies the source of the current problem. Take for example the NAB’s recent submission to ICASA on the Review of Ownership and Control of Broadcasting Services and Existing Commercial Sound Broadcasting Licenses. The submission was well-crafted and well-reasoned, but clearly the work of a committee that had gone out of its way not to step on any toes a case of the bland leading the bland. In the end the members made their own
submissions anyway, several of which were diametrically opposite to the NAB’s.
At best the NAB provides a warm, fuzzy environment for the establishment, but it does little to live up to its main object of growing the industry. And as long as the state broadcaster continues to monopolise the market with a 62 percent share, there won’t be much growth.
So it’s time the private sector broadcasters organised themselves into a lobby group with a single agenda. While these stations compete vigorously against other media and amongst themselves, they share in only 38 percent of the adspend on radio and TV. They’re at an enormous disadvantage to the SABC with its 19 radio stations and 4 TV channels. As Napoleon once said: “God is on the side of the big battalions.”
That said, the combined might of the industry probably couldn’t fend off ‘needletime’, and apparently is unwilling or unable to establish a Radio Advertisers Bureau (RAB) that lasts for more than one event. Money seems to be a problem. Stations complain bitterly about the growing demands on their revenue. Of course, it’s going to cost to set up an RAB that can play a meaningful role in growing radio’s market share, but first we need to release more of broadcasting’s total adspend into the private sector. The public sector was never meant to drive growth.
The SABC was set up by the previous government to broadcast its propaganda. As the years passed, mismanagement, a bloated infrastructure, inefficiency and rising costs pushed its funding requirements through the roof. That, together with license fees becoming harder to collect, has made it increasingly dependent on ad revenue.
Today the SABC defends its privileged position on the grounds that it has a public service mandate to fulfill. Nobody argues with that, but I believe they’ve lost the plot. What we need is an industry that champions free and fair competition and a light-touch regulator that does not interfere in matters that are best left to the natural operation of market forces.
While we’re at it lets guard against “incestuous amplification”, defined by Jane’s Defense Weekly as “a condition in warfare, and/or business where one only listens to those who are already in lock-step agreement, reinforcing set beliefs and creating a situation ripe for miscalculation.”