Radio Wars
Radio Zet, a top private radio station, has suspended its development plans until the Sejm softens a controversial draft law limiting cross-media ownership. The bill is sitting in the Sejm's media and culture committee, but private media groups such as Radio Zet, Agora, ITI Group and RMF FM are still hoping for a compromise. Monika Bednarek, the chief executive officer of Eurozet, owner of Radio Zet and Radiostacja, says the new law would prevent her company from expanding its operations and strengthening its market position. Radio Zet is already losing listeners while its main competitor, Kraków-based RMF FM, is increasing its audience share ratings. Bednarek, who joined Eurozet as a sales representative 10 years ago, spoke to the WBJ's Anna Kocińska about her company's battle to maintain its market position.
Q:Why is Radio Zet's audience share decreasing while RMF FM's ratings are going up?
A: Actually, we've kept our audience share on the same level over the past 12 months because from a statistical point of view, a 1-2% drop or growth stands within a margin of error. RMF FM does attract new listeners but it's being done at the expense of local stations. There's been more music in RMF FM's format lately and local radio stations or radio networks such as Eska also play mostly music.
Q: Increasing your audience numbers should always be a priority.
A: Maybe we should think about the very level of audience share we would ultimately like to reach. It's possible that a group of listeners, people who read Polityka, Newsweek or Gazeta Wyborcza, are not that numerous in Poland. Obviously, I'm not satisfied with the difference in ratings between us and RMF FM. That's why we've introduced several changes of which modifying the music we play is the most important. We're also very much focused on our morning program because according to market surveys, it's a good way to go.
Q: To what extent has a slump in the ad market affected your radio stations?
A: People talk about a 10-20% drop in radio market ad revenue compared to 2001. However, estimates differ because of the discount war fought by radio stations and barter deals struck with advertisers, which are not included in the official monitoring. There are pessimists on the market who talk about a drop even deeper than 20%. The discount war is at its best and the prices of television ads are so low that advertisers who couldn't afford it last year are moving their budgets to TV.
Q: What are the current plans regarding Eurozet's development?
A: The most important question now is the final version of the draft amendment to the media law because the new law will define our development direction. We'd like to invest in the radio sector, but it would be too risky to take any strategic decisions before we know the final form of the law. RMF FM is a good example of the risk I'm talking about. Under the media regulator's decision, after 10 years of investments RMF FM lost the right to split advertising and programming time among its 15 national stations. The station's strategy fell to pieces. That's how the licensed market looks. It's not really a free market because it's limited by the regulator's decisions. You can have plans but you need to be aware of the risks resulting from possible changes to the law.
Q: What would be the impact on your company if the amendment was passed in its present form?
A: In its present form, the amendment blocks our development plans. In fact, it pushes us backward. It would allow us to keep Radiostacja, our second radio station, for another four years until its license expires. But we couldn't develop it, and after four years its license wouldn't be extended. From the shareholders' point of view, it's practically the same thing as if they decided to sell the station now. All we would be able to do under the circumstances is take our time making a decision. We cannot accept such regulations.
Q: What if the regulations were more favorable for private broadcasters?
A: We'd like to develop Radiostacja until it reaches 30% of the country. The station would have one kind of programming and be broadcast without local splits. In other words, in accordance with proposals set forth by the National Television and Radio Council (KRRiTV).
Q: Would any of Eurozet's shareholders leave the company if the new regulations made your plans for Radiostacja unfeasible?
A: That's a question for shareholders, but I cannot imagine the present draft law taking effect because it would block the development of many companies. The new law won't have just a temporary impact on Polish media for the next four to five years or so. We're talking about how the Polish media market will evolve and what it will be like in the future.
