THE new entrant to Gauteng’s radio space, Power FM, will increase already fierce competition for a slice of the radio advertising pie valued at about R4bn, according to 2011 figures supplied by Media Shop.
Power FM, which launched on Tuesday, brings to 38 the number of commercial radio stations operating in the country’s economic hub.
While the number of commercial radio stations is on the increase, the size of the advertising pie still remains the same.
Tony Banahan of Media Shop said in a newsletter that ad spend trends covering a five-year period from March 2009 and February 2013 show that radio gets 15.6% of the advertising pie. According to Mr Banahan, radio advertising spend has shown good growing reach and is at its highest level in five years.
The rest is shared among TV, radio, cinema, direct mail, internet, outdoor and print.
Mr Banahan said the positive ad spend trend seen in the past few years — with just more than R4bn in 2011 — was slowing.
According to the PwC South African Entertainment and Media Outlook: 2010-14, radio advertising is expected to top R3.6bn next year. Among the big commercial radio earners are Highveld Stereo, 702 Talk Radio and Jacaranda FM, with 702 leading the talk radio pack.
According to analysts, 702 made more than R400m in the past financial year in ad revenue. "In terms of advertising, it is generally difficult to get, but the way Power FM has marketed itself should allow it to get some of the pie. What that means is that what is there of the pie will be moved from one station to Power FM," Media Tenor analyst and researcher Wadim Schreiner said.
The radio station is owned by MSG Afrika Investment Holdings, led by Given Mkhari, with shareholders including Ndalo Media, led by Khanyi Dhlomo, and Zico, led by Sandile Zungu.
While it is unclear how much it spent on infrastructure or the size of its salaries bill, given the big names it recruited, Power FM expects to break even in about three years.
The consortium also owns Limpopo-based Capricorn FM, which went on the air in November 2007. Analysts also welcomed the plurality of voices.
Stellenbosch University journalism head Prof Lizette Rabe said it was always healthy for a democracy to have many different views represented. "There can never be enough media in any democracy; the more voices, the better. The commercial side will sort itself out and the fittest will survive.
"The public will decide which of the media to support and it keeps everyone on their toes," she said.
Mr Schreiner echoed her sentiments. "We definitely need more talk radio stations in South Africa.
"Having so few means we have limited discussions on important issues, and with the elections coming up we need as many platforms as possible sourcing information from as many different people as they can," he said.
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