I read with interest the opinion piece “Jamming the airwaves” after the release of the Independent Communications Authority of South Africa’s (Icasa) position paper on the broadcasting industry.
The writer, John van Zyl, MD of ABC Ulwazi, made a number of points that I agree with. However, he also contends that the paper’s recommendations on allowing media owners a greater share of available radio licences would herald the death of choice and that this makes a mockery of Icasa’s commitment to diversity of voice. I think he’s mistaken. My view, and international precedent, is completely contrary to this opinion.
In every market where there has been a relaxation of regulation and where a single owner has been able to consolidate assets and own more than one radio station in a market, there has been greater choice than there was prior to the consolidation. Media owners with more than one asset in a market are acutely aware of preventing their multiple assets from cannibalising listeners and revenue from each other, and they tend to segment them more firmly than in markets where there are many different radio owners.
Take the situation in Cape Town. At a recent Icasa hearing on the renewal of P4 Cape Town’s licence, objections were raised by the SABC on behalf of Good Hope FM and by KFM. Their contention was that P4 Cape Town was no longer providing an alternative in the market and that it had crept into already occupied space. They suggested that there was no longer a “jazz” type station in the market but that P4 sounded like an amalgam of Good Hope and KFM. P4 argued that it had shifted, but that its decision was based on a commercial rationale and that it would not be able to survive had it not “evolved” its format.
Now envisage a situation where KFM owns P4. You can be sure that both stations will be far more tightly formatted to prevent audience cannibalisation. They would segment music and audiences far more aggressively in order to offer advertisers two distinct markets. Hence, far from reducing diversity and choice, you are more likely to find a greater range of options for listeners and clearer consumer definition for marketers.
In his comment, Van Zyl goes further and asks whether “it would not have been a good idea to allocate ideologically some of the new stations to new audiences? There are so many special interests that are not catered for…”
I don’t believe that it is a regulator’s responsibility to identify audiences and cater for special niches. That is the commercial imperative of the owners of the new licences. They need to find the audiences that are not being satisfied and create a product that becomes meaningful for these markets.
At the same time, the new owners need to ensure that there are enough of these under-served “customers/ listeners” out there and that, as a group, they are valuable to advertisers and marketers. The responsibility for catering to the special interests that Van Zyl talks about lies in the hands of the public broadcaster and this is where pressure must be brought to bear by the taxpayers and citizenry that fund the SABC to make that organisation accountable.
Van Zyl makes some good points on areas like radio adspend. Is there enough to go around to keep all the new broadcasters happy after 2006, when we expect to have 23 independent commercial radio stations to add to the huge number of media options that advertisers have available in South Africa to help them reach relatively few customers with the requisite disposable income?
This is a difficult issue to grapple with. I do feel that if radio owners remain short-sighted and continue to focus on their own enterprises rather than the health of the industry as a whole, we will all suffer. The future holds new media options that are all offering new ways of reaching an increasingly time-starved market.
Our battle as radio people should not be against each other, commercial or community, but against any medium that threatens our livelihoods. The time for a Radio Advertising Bureau is now.
The bureau would be a body set up by broadcasters, who are commercially funded, to “educate” marketers on the ways of using radio for optimal benefit. While it is funded by the stations, it functions independently of them on behalf of marketers.
In the United Kingdom such a body was set up in 1991 just as further industry liberalisation was about to happen. The established players realised that their small slice of the advertising cake was under threat from new radio licences and that the way to benefit the industry was to grow that slice.
At the root of the problem was that the advertising industry in the UK, like our own, has turnover of staff and there are very few planners and buyers who understand radio sufficiently to take advantage of the medium for the benefit of their clients.
The bureau needed to engage the advertiser, media planner, account handler and creative teams to improve the perception of the medium.
In the UK the Radio Advertising Bureau did the following:
l The bureau set up a help desk to provide a planning service for media planners;
l Being firmly impartial, it provided a consultancy service to offer advice on how radio might benefit a campaign;
l It developed training courses for media planners and expanded to other areas of radio’s value chain;
l It initiated ground-breaking, independent research studies on media effectiveness;
l It runs regular seminars on new thinking and ideas on the medium, building the knowledge base of the advertising industry; and
l It set up an award for radio advertising in particular, to improve the quality of radio advertising creativity.
Over the 10 years that the bureau has been in operation radio revenue grew almost 500% and radio became the fastest-growing medium in the UK from 1993 to 2000, to the benefit of all licensees.
I want a future where the South African economy is growing rapidly enough to support further licensing as our radio industry matures and we are able to support further segmentation of the market.
The regulator needs to become less interventionist and allow the free market to dictate success and failure among licensees.
I believe that the key role for Icasa in the future is to protect the industry as a whole from government intervention. Already, the levies and commitments that radio players are obligated to pay, prior to seeing profits on the bottom line, are onerous.
Icasa’s initial role in establishing and developing a viable and transformed industry was crucial and has largely been a success.
There are more black people in the industry and there has been significant development of skills. The radio universe has grown and more people listen to radio than in the bad old days of the SABC.
Without Icasa it would not have happened. But when the moment is right, “mother” must let go of the constraints and let the battle for market share be fought on quality and “customer satisfaction”.
Omar Essack is executive director: broadcasting at Kagiso Media Limited