National broadcasters lose ad revenue to local radio
While the National Radio and Television Council (KRRiTV) extended the broadcasting licenses of the two largest national commercial radio stations last week, it also removed their right to allocate advertising time and programming on a local level.
Up to now, RMF FM, which along with Radio Zet has been awarded a seven-year extension of its national broadcasting license, had been splitting its advertising and programming time among its 15 local stations. Radio Zet also used this privilege in the Warsaw area, which allowed it to better compete for advertising revenue with local stations.
According to Joanna Stempien, the press spokesman for Juliusz Braun, the chairman of the National Radio and Television Council (KRRiTV), the council's decision makes it possible to create clear categories of broadcasters. "National and local stations should differ and what we've had so far, in RMF FM's case, was a kind of hybrid national and local station," she said.
The KRRiTV's decision promises real diversification of the market, said Ireneusz Iwanski, president of Radio WAMA, a local broadcaster in the northern Warminsko-Mazurski province, and chairman of the Association of Local Commercial Radio Stations. "We will be able to strengthen our position on the market thanks to the decision." However, according to Iwanski, it's still difficult to estimate what part of RMF FM's local ad revenue would go to local stations like WAMA. "We would hope for 100%, but obviously some ad spending would go to other kinds of media," he said.
Local radio stations have long protested against the right of national stations to locally split programming and advertising, claiming that Radio Zet and RMF FM were taking away a great portion of local ad revenue, thus dominating the ad market in Poland. According to Anna Kozlowska, a PR manager at RMF FM, her station's share in the local ad market reached only 0.03%. "But obviously local stations claimed it was more," she said. According to Iwanski, 6% of total radio ad spending went to Radio Zet's and RMF FM's local branches.
Local markets started attracting advertisers long before the broadcast-license process kicked off last November. "I have seen quite an increase in (advertisers') interest in the local market," Iwanski said. According to seven months of research conducted on 102 radio stations by CR-Media, a Warsaw-based media consultancy, 50% of zl. 418 million ($95 million) spent by advertisers went to local radio stations.
"It wasn't good news considering the fact that we invested heavily in our 15 branches and now they might become useless," RMF FM's Kozlowska said. According to Kozlowska, the station's managing board will soon decide on the future of its local offices where 2,000 people are employed.
