While most media interest has been on new capital city stations recently, some radio groups have been more focused on what is happening in the next market level, as three significant provincial areas prepare to get a new radio station.
The New South Wales Central Coast and Queensland’s Gold and Sunshine Coasts have a lot of characteristics in common – they are all monopoly commercial radio markets near capital cities, they are all growing very fast and RG Capital owns the existing stations in every market.
As each market prepares for the launch of a new station, radioinfo examines where they are up to so far.
THE MARKETS –
The NSW Central Coast market, which is centred around Gosford, currently has a population of about 285,000 and has been growing at a rate of about 9% in the last census period. The area is both a retirement destination for older couples and a desirable location for young families seeking housing at a cost that is cheaper than living in Sydney. Gosford is 80 kms north of Sydney.
The two RG Capital Radio stations, 2GO FM and SEA FM, are the only local commercial stations in the area, although all the Sydney radio stations can be heard. There is no local ABC station on the central coast, but there are local ABC stations in Sydney and also north in Newcastle that can both be heard in the service area. 2GO’s target audience is 30-54 years and Sea FM’s is 18-39.
The Central Coast is so close to Sydney that it has 8% of the Sydney survey diaries placed in the area, unlike the other two markets.
The new station entering the Central Coast market is owned by DMG and is expected to be on air “by the end of 2003,” after experiencing some technical difficulties with transmission and an aborted joint venture partnership with RG Capital.
The Queensland Gold Coast market, south of Brisbane, stretches from Tweed Heads in the south to Cabbage Tree Point in the North. It is one of Australia’s largest regional markets, with a population of 428,000 people and is also in a growth phase, with tourism and retirement being two major reasons for people to live there.
Two RG Capital Radio stations, GOLD FM and SEA FM, are the main local commercial stations in the area, although The Carlais Network’s Radio 97 Tweed Heads has an FM Translator at Currumbin on 104.1MHz which covers much of The Tweed and Gold Coast. Radio 97 is also heard AM 972. There is one local ABC station on the Gold Coastand all the Brisbane radio stations can be heard. GOLD’s target audience is 35-54 years, with a male skew and Sea FM’s is 18-39 with a female skew.
The new station entering the Gold Coast market is owned by Hot Tomato and is expected to be on air “soon.”
The Queensland Sunshine Coast market, north of Brisbane, is centred around Nambour. It currently has a population of about 354,000 and has been growing at a rate of about 13% in the last census period. Tourism, manufacturing and agriculture are several reasons for people to live there.
The two RG Capital Radio stations, MIX FM and SEA FM, are the only local commercial stations in the area. It is the more traditionally regional of the three markets as far as media is concerned, having an aggregated regional TV market and a local paper. Most Brisbane stations can be heard. MIX FM’s target audience is 35-50 years and Sea FM’s is 25-39.
The new station entering the Sunshine Coast market is owned by DMG and is expected to be on air “by the end of September.”
Nearly half the population in each area is over 40 years of age and the economies of each market are “booming.” Housing prices in each area are “rising quickly and all the populations are growing.” Central Coast viewers watch their TV from the nearby capital city and so local advertisers favour radio and local papers more than they do TV, which is often beyond their budget. The Gold and Sunshine Coasts have aggregated regional TV stations which have sales offices in the markets and people in many parts of the Gold Coast can also see Brisbane TV. All three markets have a significant community radio sector.
THE INCUMBENT –
RG Capital’s Rhys Holleran spoke to radioinfo about the impending competition on three fronts:
radioinfo: You are facing big battles soon. What are you doing now to prepare for those new business threats?
Holleran: We don’t see it that way. We have had to compete against Metro stations who have virtually had a full signal in these markets for years. We have always had to produce quality radio and that won’t change.
radioinfo: A new station always has the advantage of press coverage, word of mouth and “pazzaz” to build an audience in the first few months of its life. Your network found that when it launched its Albury station a few years ago. How long will that
honeymoon period last for your new competitors do you think?
Holleran: The novelty factor, if you want to call it that, seems to peek at 13-15 weeks out. Probably after 20 weeks you get the normal trend. I think in these markets it will be different from Albury simply because the amount of capital city radio consumption is huge and I think new services will soak up a bit of that if they offer an alternative format. Having said all that – ask them!
radioinfo: Do you think the competitors will grow radio revenue in the markets by taking money out of other media, or will they just go straight for your clients and reduce your revenue, without growing radio’s market share?
Holleran: No question that the market will grow. To what extent depends on the rate integrity of the new players. Certainly we are upbeat about it.
radioinfo: RG Capital prides itself on having as many local shifts as possible, putting announcing staff on the streets in these towns – creating a visible presence rather than relying on lots of networking. Will this philosophy help you defend your listenership share and revenue position?
Holleran: No question – we are live, local and original! The Gold Coast operates round the clock services 7 days a week and employs 80 people providing news, production and creative, quality information and all local content. This will ultimately be our big point of difference.
radioinfo: In programming terms it is easy for a new competitor to attack one end or another of a station’s demographic if the station has to serve a large spread of demographics – which happens in most monopoly markets.
Are you vulnerable there? What demographics are your most profitable and you would most want to hold on to?
Holleran: In coastal markets such as these there is a stack of Cap City listenership. I expect that a new player will attack that untapped potential and grow total listenership. Long term that’s what will pan out.
radioinfo: Have you allocated more money to these stations in the short term for promotional activities?
Holleran: We have always prided ourselves on quality promotions and that won’t change, the battle isn’t about single dinky promotions its about quality people – and we have a stack of them.
THE CHALLENGERS –
Hot Tomato is a new radio company owned by Jaan Torv. Key players in the company are Jaan’s brother Hans Torv, who was previously breakfast announcer at WS FM Sydney, Program Director Rob McCasker and General Manager Graham Miles. radioinfo spoke to Graham Miles about the new challenger’s prospects and plans for the Gold Coast market:
radioinfo: How much advertising money is there in the Gold Coast market?
Miles: That’s difficult to answer because it has been a monopoly radio market until now and the figures are not readily available. We anticipate the radio market could be somewhere between $13-15 million. It’s a very prosperous market.
There is one newspaper in the market which must bring in ‘rivers of gold’ but News Limited don’t really give any indications of figures for individual markets either. Maybe newspaper revenue is $20 million plus. It is impossible to work out what TV would be getting. Because there are no radio or tv surveys, there has been very little accountability for advertisers in this market. The newspaper does have readership figures, but the electronic media has no recent figures. RG Capital haven’t done a survey here since August 2000.
radioinfo: Will you push for a survey quickly?
Miles: Yes. We will be asking them to agree to a survey quickly.
radioinfo: Where will you be looking for revenue from. Will it be from established radio advertisers?
Miles: We will target wider than that. Our goal is to grow radio listening and revenue. It has happened in other markets, most recently Perth when Nova began, so it can happen here too.
This market has 8 TV signals in it, the FM stations from Brisbane boom in, as does 4KQ, and we also have a significant competitor at the southern end of the market – Bill Caralis’ Tweed 97. There is plenty of scope to grow radio’s revenue share in this market.
radioinfo: Where are you at in your progress towards getting on air?
Miles: We are in the second phase of our research project and we are identifying our options. It is too early to call formats yet.
radioinfo: When will you be on air?
Miles: We have a date in mind. It will be somewhere before the allocated 12 months is up. The building is progressing and we will be testing our transmitter soon. We had those transmission difficulties at first, but now that we have moved to a new height on Tower 2 at the TXA site, we should have no more troubles. We are now at a height of 63 metres, which should give us good coverage of the area.
radioinfo: What about on air staff. Anything new to announce?
Miles: Nothing new to announce at this time. Just tell everyone to keep watching radioinfo, they’ll get the news there first – it’s a great site. We had well over 600 applications for our recent jobs and we still have about half our positions still to fill. It was surprising and very pleasing to see the quality of applicants we got.
radioinfo: Is that because you are paying well or just because people want to be in on a start up operation?
Miles: A bit of both perhaps. But we have to be cautious about salary levels – we can’t pay metro wages on regional market revenue. But I think people also like the idea of living here. You have 9 degrees in Sydney today and we have 23! My petrol cost me 69.4 cents a litre this morning, what did yours cost? Those are some of the lifestyle benefits!
radioinfo: You have a very experienced breakfast announcer there in Hans Torv. Will he be on air?
Miles: With talent like Hans and Jaan as owners we would be mad to ignore the possibilities, so anything’s possible. It’s great to have owners who are hands on like they are.
radioinfo: Are you planning a few surprises for RG Capital?
Miles: RG Capital is a fine and successful company. A lot of that success has been because it has had monopolies in its top two markets, this one and Gosford. Rhys will be fighting on three fronts soon, so he will certainly be under pressure. They’ll work damn hard, and so will we. It should be a good competition.
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The new licences on the Sunshine and Central Coasts are owned by DMG Regional Radio. radioinfo spoke to DMG’s Rob Gamble about the prospects for those stations:
radioinfo: How much advertising money is there in the Central Coast and Sunshine Coast markets?
Gamble: The Central Coast is probably worth a bit over $10 million in radio revenue and the Sunshine is a bit under that, probably about $8 million.
What they’re worth now is relevant, but what we’ve found is that, in the first couple of years of new players in a market, radio’s overall share of revenue increases, so maybe there’s even more than those figures. These are the fastest growing markets in the country.
As an incumbent in markets that have faced new competition, we know that it is tough for a while, because the incumbent always takes an initial dip in ratings and revenue, especially in the first 3-4 months, but overall the growth of the radio market in these areas should be good for everyone.
radioinfo: Being so close to Sydney, do you have any worries about the Central Coast station cannibalising Nova’s audience? Central Coast has 8% of the Sydney books afterall.
Gamble: No. The formatics we decide on will avoid that.
radioinfo: So, I suppose it will be a Star FM and perhaps even a new hub.
Gamble: Not necessarily. We have the Star and Hot brands, which we could use in either market if we feel that would be appropriate, but that is far from being decided yet.
Hubbing works for our regional markets, but in these larger markets we will run standalone operations because of the size and complexity of the markets. We will have local programming and local newsrooms and will devise a format that will work in each market.
radioinfo: These new stations give you new products which are between regional and metro stations. How will this effect your operations?
Gamble: It fills a gap between the Novas and our regional stations, which will benefit us in many ways, including providing another step for our people to take in their career paths with DMG.
radioinfo: Will you be pushing for a survey quickly in both markets?
Gamble: Yes. For both local and agency advertisers it is very important to get some initial figures. We would want to have a survey in the first 3 or 4 months of being on air.