By Staffan Rosell, CEO SBS Radio (left) and Richard Marston, CEO MTG Radio
Last Wednesday the government made public their stance on the digital radio issue. Culture minister Leif Pagrotsky, after years of dialogue between political decision makers and the radio business, chose to use Sveriges Radio’s Ekot and Dagens Nyheter as messenger.
Through short phone calls the previous evening, Swedish Radio (SR) and Teracom got to know what was happening. The commercial radio companies weren’t informed at all. The message was clear. There will be no digitalisation of radio through DAB in the foreseeable future. The government buried DAB despite hundreds of millions of tax payer money being invested in the technology.
To understand what the consequences are, it’s important to clarify what DAB would have given us.
Firstly, it would have given a more equal relationship between SR and commercial radio, through changed broadcasting conditions with a larger broadcasting coverage, better reach and stronger transmitters. Today local private transmitters are 1 000 watt, while SR has a national network with 60 000 watt transmitters.
Secondly, a reduction of the concession fees would have been needed for commercial radio to be able to invest in DAB, a reduction that would have given us the possibility to develop and expand our programs. Private radio has in the first ten years, 1993-2003, invested more than 1.2 billion SEK, without a profitable year.
The business turnover is 500 million SEK, out of which 125 million SEK goes to the government for the right to broadcast radio. SR has a budget of 2.2 billion SEK. Despite the tough circumstances for private radio 46.2% of the population aged 9-49 listens to private radio every day, while 37.1% listens to SR. In the younger target groups the difference is even larger.
Considering the business’ low profitability, an investment in new technology, without lowered concession fees, would have been impossible. Now that DAB is buried, commercial radio has no possibility to respond to SR’s expansive investments in new channels, expanded programs and new technologies such as podcasting and webradio.
Commercial radio’s competitiveness on the advertising market is further weakened by the government lowering advertising tax and favouring daily papers and TV through digitalisation and a greater reach.
But despite the DAB project ending, commercial radio will not give up the struggle for reasonable terms. We want to survive, we want to develop, and we want to continue vitalising radio in Sweden. Now we have to focus on the unsolved issues, and we will intensify our efforts. We have requested to immediately meet with the cultural ministry to discuss our three main demands for the business’ continued survival:
- Commercial radio demands lowered concession fees. This is a prerequisite for us to invest in new technology and for us to be able to develop and expand our programs.
- Commercial radio demands higher transmission effect and more licenses in order for the competition on the radio market to be equal.
- Commercial radio demands new advertising regulations. In order to compete with for example daily papers and TV the conditions have to be equal.
Ever since commercial radio started during the non-socialist government in 1993, we’ve been a thorn in the eye of successive social democratic governments. In an interview in the SR show P4 Extra last Wednesday, Pagrotsky said that he cared about SR, and that he didn’t take the interests of private radio into consideration in the DAB decision. He thus cements a political stance that aims at obstructing commercial radio’s interests and future.
Now it’s up to Pagrotsky to prove the opposite.
Radio Advertising Bureau, RAB
Richard Marston, CEO MTG Radio
Staffan Rosell, CEO SBS Radio