Radio Wars Episode two

Poland's first private radio station, in 13 years RMF FM has transformed itself from a local radio station in Kraków to Poland's most popular national station with ambitions to launch a television channel. In May 2001, the National Radio and Television Council (KRRiTV) withdrew the station's concession to operate its network of 15 local radio stations, costing 100 jobs. One year on, Marek Dworak, the president of Broker FM and vice president of RMF FM, talked to Greg Goodale about the station's recovery.

What do you think of the decision by the KRRiTV to strip RMF FM of its local stations one year on?
Last year we received a new seven-year concession but we were deprived of our local stations. State intervention means that there is no freedom in this country. The system of concessions is not used to promote successful companies and to set standards, but to level them to the ground. The move was supposed to protect local stations, but the point is that there are no real local stations in this country.

How did the KRRiTV decision harm your station?
The loss of our local network meant that we lost a certain part of our income but if we compare our national advertising revenues to last year we have seen no decline. We have a good product that has good audience numbers, so there are buyers for it even in a crisis, especially since it is competitively priced. Our audience numbers have grown by about 10% during the past year. We have 16.9 million listeners a week. We want to sell advertising to our clients by promoting the cost of reaching 1,000 viewers in a target group through RMF FM, the way it is done in television.

The political background worries you?
In no civilised European country are the media in the hands of the government. The real reason behind this decision was to reduce competition for state television because state radio hasn't managed to survive. With full freedom to consolidate it would be easy to compete with state television. I think this is the wrong direction - instead of creating good media, we are forced to concentrate on obeying regulations. The recent slackening of the government's position will not apply to electronic media but to Gazeta Wyborcza.

Are you expecting an end to the slump in advertising revenues next year?
We are only just beginning talks about next year's advertising campaigns. Advertising budgets are first negotiated with television stations, then the press and radio get whatever is left over. Today 65% of advertising budgets go to television, a year ago this was 55%, and we want to take a share from television. Everyone is saying that next year will definitely be no better than this year and hoping that it will be no worse.

What has hurt RMF FM most regarding the advertising downturn?
The biggest influence has been on our development. We were working under the assumption that since we have achieved a lot on the radio market, we have 6-8% of the radio advertising market but it would be difficult to go further since radio attracts a limited share of advertising expenditure as a whole. In 1999 we decided to move into television, and this year we received a concession for our national television station RMF TV, which will be distributed using digital and cable platforms. The tempo at which we are developing the station has fallen very significantly because of the market situation. If our revenue growth remained as strong as in 1999 and we hadn't lost our concession for our local stations, we could be launching our TV station right now.

What is your strategy for developing RMF FM?
A company with just one medium like radio or television, has no chance of survival in the future on a market with such a proliferation of media. We bought into the Interia portal because we believe in electronic media. Traditional media like billboards and the press will remain strong for about the next decade. We believe that the brand and content will be the key along with control of a variety of media.
The next ten years will not be as good for the media as last ten years, but there is still a lot that can be done. Poland's European Union entry will mean increased competition, and our investment in our brand and our work on the image of RMF will be significant here. We also anticipate an increase in advertising revenues, which is what we saw in Spain and Portugal, countries to which we can compare ourselves.

How much will it cost to complete your television station and when will it go on air?
It is easy to talk about things in the future but difficult to actually do them. I can only say that the channel will be very different from other channels on the market today. As to when we will launch the channel, it is all a matter of money. There isn't much money out there, so we have to talk to many financial institutions, some of which cut themselves off after Sept. 11, 2001. It is hard to say if it will be a year, six months or three months, but it will definitely happen. Since we are still negotiating, I don't want to give a figure.