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In a nutshell: Radio growth and advertising

Posted by radio On September - 25 - 2012 ADD COMMENTS

By Helen Phushela

 

Radio is the most important medium in South Africa reaching over 88% of the population. Most people living in rural areas rely on it as a news and information source. Most stations that reach these areas are community radio stations that narrow down listenership and target market for advertisers into ethnic groups. An advertiser can produce an advert for a particular product which targets the right audience in their native language.

 

Advertising revenues increased in 2011 by 7.4%, which is lower than the 13.3% gained in 2010 a direct boost from the FIFA Soccer World Cup, according to research.

 

Radio, with its listenership covering 88% of the population, is still a dominant medium for broadcast advertising. The revenue increased by 7.1% on a compound annual rate from R3.2billion in 2011 to an estimated R4.6billion in 2016. Radio broadcast advertising as well as public funding revenue increased by 0.7% in 2011. Due to this, there has been a subsequent increase in television licence fee, which cross-subsidise the public radio station. With more and more households gaining access to television, public funding is projected at 1.5% increase compound annual rate to R480 million in 2016.

 

Radio consists of three segments namely public service broadcasting sector, commercial sector and community radio stations. Public broadcaster, SABC is state owned and funded through public licence fees and advertising. It operates public service stations in all of the official languages including Indian on Lotus FM and San on X-K FM.

 

Online radio streaming has allowed consumers to listen to their favourite programmes on the go. The frenzy to create applications for broadcasters has also taken the industry by storm. Jacaranda and 5Fm have their own apps, while other stations can be accessed on a group app such as TFS Radio. Radio programming is broadcast in all 11 official languages, as well as German, Hindi, Portuguese, Greek and Khoi-San languages.

 

Radio is the leading broadcasting medium in South Africa; Kwazulu Natal is the front-runner in radio listenership, claiming 20% of the total population. It is closely followed by Gauteng with 19% and Limpopo and Eastern Cape each at 13%. Regardless of the current RAMS for ethnic radio stations, radio shows produced in English remain dominant in South African radio taking up 41.1% of listenership in 2011. IsiZulu follows with 13.5% then Afrikaans at 9.3%.

 

Music however, still serves as a key ingredient to reaching and retaining audiences. Then there is phone in talk shows, current affairs and news programming.

 

Community radio stations claim more listeners as a collective with 8.5 million people tuning in each week – comprising of more than a quarter of the overall radio listening audience. Despite their reach, community radio stations still struggle to get advertising funding while some radio stations get subsidies from government or rely on community donations. The role of the Independent Communications Authority of South Africa (ICASA) is to ensure universal access, as well as to mediate disputes brought against licensees and regulate the industry. ICASA issued three invitations in February 2012 to provide commercial sound broadcasting in primary and secondary markets. Primary market, the authority, awarded two licenses in Gauteng, Durban and Cape Town. One license was awarded to Northern Cape and Eastern Cape, one in Free State.

 

Research by the South African Advertising Research Foundation (SAARF) showed a decline in the time spent listening to radio, a nine minute decline daily listenership as compared to the 1:33 minutes from the previous year. This took place when the weekly penetration declined by 0.1%. On the other hand, the Radio Advertising Bureau (RAB) promotes the use of radio as an advertising media. The focus is to educate the advertising community on the advantages of using radio as an advertising medium. Radio has launched online and is gradually migrating digitally, one can now comment on and follow the development of their favourite radio shows through social media tools such as Facebook pages and Twitter handle.

 

Branded content advertising, a relatively new form of advertising medium that blurs conventional distinctions between what constitutes advertising and what constitutes entertainment, will soon be integrated into programming. In the old days radio adverts were 30 seconds long and often left listeners perplexed. Advertisers in radio are now creating adverts that are more than a 30 seconds long. An example is FNB’s ‘Hello Steve’ campaign, which moved away from the traditional 30-second slot. According to reports, this campaign earned accolades throughout the industry and produced great results for FNB. Roles in adverts have now changed – the idea exists before a time period has been set.

 

Then there is the return of the jingle. Jingles and pneumatic trigger instant brand recognition in the hearts and minds of the listeners. These help brands build firm relationships with listeners and stand out from the media clutter. Radio with its online migration and popularity can now brand and promote products.

 

Another phenomenon is station-advertiser collaboration which, allows marketers the need to collaborate with stations, increasingly becoming content generators with the focus of entertaining and engaging listeners.

 

Power of personality is one of radio’s strengths which, lies in the personal relationship created between listeners and radio personalities. With the ever-expanding scope of radio presenters’ influence via social media platforms, we’ll see more brands matching themselves to a show or host.

 

More and more people are able to listen to their favourite show online and podcasts enable listeners to catch up on shows. Satellite radio is usually carried by a signal through the DStv’s audio bouquet however, not many people use this unconventional method of listening to radio.

 

Digital radio will allow radio to have sound quality of a CD and live streams of information on music played on shows will also allow the station to get information easily. In public funding there has been a 2% increase, from 442 million to 449 million in 2012. Radio stations such as Ja.fm, launched by Jacaranda FM, can only be connected to online and it serves an Afrikaans audience through a Listener Driven Radio application.

 

Wolrdtunes.net-All Hit is one of the radio stations which are music-orientated where listeners vote for songs and hit songs are played. Ballz Radio covers current affairs and news.

 

According to the South African Music Performance Rights Association (SAMRO), although radio has seen success over the years, it still faces the obstacles of paying 10% of its net broadcasting revenue to songwriters. The National Association of Broadcasters remains in dispute with this even after the recent judgement of 7% payable by stations passed by the Commission of Copyright at the Copyright tribunal.

 

South African broadcasters have to adhere to Constitutional laws since SA does not have established national media laws. This poses a problem to the regulation of broadcast media where the regulation rights that run broadcast media and different stations come from the Broadcasting Complains Commission of South Africa (BCCSA) and ICASA.

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Who Owns Who on Mzansi’s Airwaves?

Posted by radio On August - 24 - 2012 2 COMMENTS

By Radiobiz

 

We all know that the State through the SABC owns three commercial radio stations (namely 5fm, Good Hope fm and Metro fm) and fifteen public service stations. But as to the rest of the commercial stations we don’t seem to know all the details as far as ownership and control are concerned. Lets unpack a few and see exactly who is controlling the information in the country through the airwaves.

 

Talk Radio 702, 567 Cape Talk, 94.5 Kfm and 94.7 Highveld Stereo are all owned by Primedia Broadcasting.  The ownership of these premium brands gives Primedia access to Gauteng, Eastern Cape and Western Cape. I guess KZN is the only primary market where they don’t have footprint however, they do syndicate broadcasting between 702 and 567 Cape Talk on a regular basis.

 

Hosken Consolidated Investments (HCI) owns 64% of 99.2 Yfm; they also own the same stake on eTV. This basically gives them a controlling interest in the radio station, thus HCI can influence the youth (mainly black) of Gauteng and the rest of the country through their media assets.

 

Kagiso Media has interests in quite a few stations across the country, they have minority stakes in KZN based Gagasi 99.5fm , Cape’s Heart 104.9 FM, Orange fm and an economic stake in Kaya FM. They are majority shareholders in Jacaranda FM and East Coast radio; this gives them access to both primary and secondary markets. Some might say the control of these private commercial stations is in the hands of the few, which could be a problem in the long run as far as diversity is concerned. We are hoping that ICASA would take note of this when deciding who to award the primary markets licences to commercial radio stations.

 

Kaya FM does not have a majority shareholder, alongside Kagiso Media there is Thebe Holdings, Shanike Investments, Kaya Investments and Mokgosi Holdings.

 

African Media Entertainment (AME) has a controlling interest in Orange FM of 70%, in Eastern Cape’s Algoa FM they have a 100% stake and 24.9% interest in Mpumalanga based M-Power FM. Orange FM has a footprint in five different provinces namely, Free State, North West, Northern Cape, northern KZN and southern Gauteng making it the regional station with the largest footprint in the country.

 

Up north, Limpopo based Capricorn FM is partly owned (37.5%) by MSG Africa Given Mkhari’s company, Safika Holdings and Limpopo based business people.

 

Makana Radio Communication (MRC) a company founded by former Robin Island political prisoners, they have controlling interests in Heart FM and iGagasi FM.

 

Radio North-west is owned by Direng Investments, SADTU Investment Company and other BEE company. Direng Investments and Mbombela Investments Holdings also have a stake in M-Power FM.

 

Classic FM doesn’t have a majority shareholder; it is owned by Liberty Life foundation, Ingoma Trust. Moneyweb Holdings and London-based Classic FM PLC.

 

Well now that you know, do you think the industry is diverse enough or more still needs to be done? Keeping in mind that there are more commercial radio licences still to be issued by ICASA.

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