Secondary programs in crisis
Private radio stations postpone the launch dates of their cable secondary channels in turn
Private radio stations are postponing the launch dates of their cable second channels in turnBy Daniel Schifferle Hardly any of the second channels for cable that were eagerly planned in the late nineties will be realized in the near future. The launch dates are postponed in turn. The desire to do so has vanished even more after the pioneer - 24 Plus - closed down again at the beginning of November. The second channels are not expecting any substantial advertising income.
In the second half of the nineties, local radio stations were gripped by a real start-up fever. Second programs for older listeners were planned at the drop of a hat. The main aim was to occupy the market with a view to the new transmission technology Digital Audio Broadcasting (DAB). Today, just two of the seven licensed second channels are on air: Top Two since October 2, 2000 and 32 Goldies since October 24, 2001. Five projects, and thus the majority of the licensed Plus channels, are still on hold. These include Aktuell 2, Sunshine Gold, the two Argovia projects Hit Radio and SwissClassicRock, but 105 Classic is also at least six months behind schedule.
What the second broadcasters who have not yet launched have in common is that they are all much too late and will not be able to meet the deadlines set in their licenses by the time they start broadcasting. Several of them have already received extensions from OFCOM or have pending applications.
The bombshell came at the beginning of November, when the pioneer of second channels - 24 Plus - ceased operations after just one and a half years. Tamedia had not given the channel a chance and therefore excluded it from the takeover of Belcom. The Tamedia decision is a bad omen for all those who are not yet on air. They are no longer as sure of their cause as they were before. "If Radio 24 Plus is shut down hastily, that's alarming," says Sunshine boss Markus Ruoss. He has applied to Bakom to extend the deadline for his Sunshine Gold project by a whole year. "Not only we, but also all other planned second programs have noticed that the preliminary clarifications and market analyses need to be carried out more seriously," says Ruoss, explaining the additional time required.
Full cable networks and excessively high transmission fees
Broadcaster bosses are blaming various reasons for the fading euphoria. Downwardly revised market estimates are only one side of the coin. The most difficult obstacle is unanimously cited as the way into the fully occupied cable networks. Although these networks are constantly expanding their capacities, the additional channels are gone faster than they are created. Another consequence of the shortage of cable slots: Cable network operators are now charging broadcasters money for distribution. In view of the low budgets that characterize second channels, the level of distribution costs can quickly make or break them.
"We want cable distribution for free. Or at least without cash, i.e. we offer the cable provider advertising in return," says Ruoss. "Just like many foreign channels do." Whether the network operators will accept this is questionable, as Radio 32 Goldies, which was launched on October 24, has only just set a precedent in the other direction. The Solothurn second station pays around CHF 100,000 per year for distribution. And this is only for broadcasting in north-western Switzerland. Ruoss: "If you were to convert this to the whole of German-speaking Switzerland, we would end up with an amount of between 300,000 and 500,000 francs for Sunshine Gold." An order of magnitude that he could never agree to. "We're now waiting for the concrete offer promised by Cablecom at the end of November, then we'll see what's what," adds Ruoss.
Marschhalt: Analysis of listener needs on cable
The problem of full cable networks is not new. Two years ago, Ruoss initiated a study that comprehensively analyzed the situation of around 80 radio stations on cable. The study, in which Swisscable, SRG and some private radio stations are participating, aims to clarify which stations are in demand from the public and which are not. The report, which is expected soon, is explosive. This is because it will serve the Swisscable association as a basis for deciding which stations to recommend to its members. This will set the course for which radio programs will be distributed on cable in future and under what conditions. The paper is therefore also eagerly awaited by those responsible for the planned second channels.
However, even if these recommendations for the secondary programs are optimal, i.e. cost-neutral, this is still not enough reason for optimism. "Everything has to be right," says Sunshine boss Ruoss. Among other things, he is looking forward to the results of the usage analysis in the above study, which will give a rough indication of the number of listeners the second channels distributed via cable can expect. In order to clarify all outstanding questions, the latest possible start date stipulated in the license has been postponed by one year. Whether Sunshine Gold will even see the light of day is still very much up in the air. At least that is the answer given by station boss Ruoss to the question of how likely it is that his second station will be launched. "51 percent - or slightly more." The answer reflects the enthusiasm for the new channel, which has been reduced to an absolute low flame.
In the search for cost-effective solutions for cable distribution, all the stops are currently being pulled out. In order to circumvent the distribution costs, some broadcaster bosses want to invoke the switch-on obligation in accordance with Article 47 of the RTVA. 105 Classic has submitted an application to this effect to Bakom. The answer is still pending. Either way, 105 Classic, which has already had the license in the bag for a year, cannot stick to the original timetable. It has also applied to Bakom for an extension of the deadline. "But 105 Classic will start next spring," says 105 boss Giuseppe Scaglione optimistically.
Argovia, which has two cable radio stations in the pipeline, wants to take even more time: Hit Radio and SwissClassicRock. According to the license, both should be launched by December 2001 at the latest. But Argovia Managing Director Roland Baumgartner also wants to postpone the launch by a year. His main argument for the delay: "The costs for cable distribution must be clarified, only then can we calculate properly."
Nobody is under any illusions about income
The reason why new radio programs are in danger of failing because of the distribution costs: you can't earn any money with them, so you shouldn't spend any if possible. The station bosses agree that no substantial income can be expected in the first two to three years. "There is practically nothing to be gained from commercials," says Top boss Günter Heuberger, who has been on air with Top Two for just over a year. He only sees a market for sponsorship. However, he is also aware that he will not be able to recoup the CHF 600,000 annual operating costs for Top Two.
In general, things look bleak for the second channels in terms of advertising. The marketer Radiotele AG has long since waved goodbye. Not a single advertising customer has yet been sold for a secondary program, says Felix Kilchsperger, sales manager of the radio unit. The pressure from the broadcasters, who want to be taken more seriously by Radiotele AG, is not helping. Kilchsperger has clear words for this: "The programs bring neither performance nor extensive listeners to national advertising customers, nor do they open up new groups of listeners. So what's the point?" His assessment of the second channels leaves no room for interpretation. "Who listens to cable radio? It's a shame about the money that broadcasters are wasting on these programs," he grumbles and says: "I would advise private radio stations to invest this money in their first programs, where there is still room for improvement." Kilchsperger does not see any opportunities in the advertising market "with the best will in the world". "If the offers fall through in the bidding phase, I don't see any other way for these stations to get in with advertising clients," he is convinced.
Listener numbers are a hot potato
The most important thing that the new stations lack is listener figures. Such research results would actually be available, as the programs are automatically collected by Publica Data. However, the results are only made public when commissioned and paid for by the broadcasters. And that's where the problem lies. Top boss Günter Heuberger assures us that he has never requested or viewed listener figures from Top Two from Publica Data. "Maybe out of a kind of self-protection," he admits, "maybe I don't really want to know." That is why he cannot provide any information. And this despite the fact that the station has been on cable for over a year.
However, the others are hardly deterred by such unpleasant prospects in terms of listener numbers. Their goals remain more than ambitious. André Moesch believes that his Aktuell 2 can reach "a quarter to a third" of the listenership of the first program. Peter Scheurer is no less optimistic. The station manager expects his 32 Goldies to reach 20,000 listeners after the first year, and even 40,000 in the longer term. "That would mean we would just overtake Musigwälle 531, currently the strongest cable radio station in our coverage area. That is our goal."
The lack of listeners is just one reason for clients not to book. The age spectrum of the target groups addressed also does not meet the current wishes of the advertising industry. This is because the Plus or Oldies programs are by definition aimed at an older audience.
Nevertheless, the two channels already in operation are not free of advertising. But this is only because the commercials from the first program are also broadcast free of charge on the second. This is how Top Two and 32 Goldies do it. However, Peter Scheurer, station manager of 32 Goldies, would like to try to charge "a small additional amount in the region of two francs per second after a year".
Thanks to cheap production, manageable even without income
Such meagre income prospects are only acceptable because the secondary programs are produced at dirt cheap prices. This is made possible by digital studio technology, which can theoretically produce programs by the dozen. One person is enough for handling and announcements - or less: Argovia even plans to employ just one person for both stations, i.e. for Hit Radio and SwissClassicRock. Own productions are therefore hardly to be expected from the secondary programs. In addition to the music carpet, they are largely pure second and third-party exploitation channels of their first programs.
Costs can be kept low with so little effort. Two examples: 32 Goldies uses just CHF 300,000 in operating costs per year. At the other end is Top Two, which spends 600,000 francs. Nevertheless, this is still a lot if no money flows back. So are second channels just cheap playgrounds with a view to DAB, which is a long way off? Aktuell boss Moesch thinks so: "Second channels offer an opportunity to experiment, you learn a lot about handling."
Other broadcasters emphasize the potential of secondary programs in view of the rapidly changing music genres. They are therefore ideally suited as convenient and cost-effective platforms for removing elements that no longer fit into the mainstream. They say that special listener needs can still be catered for on these stations.
Second channels on private radio stations
In the second half of the nineties, local radio stations were gripped by a real start-up fever. Second programs for older listeners were planned at the drop of a hat. The main aim was to occupy the market with a view to the new transmission technology Digital Audio Broadcasting (DAB). Today, just two of the seven licensed second channels are on air: Top Two since October 2, 2000 and 32 Goldies since October 24, 2001. Five projects, and thus the majority of the licensed Plus channels, are still on hold. These include Aktuell 2, Sunshine Gold, the two Argovia projects Hit Radio and SwissClassicRock, but 105 Classic is also at least six months behind schedule.
What the second broadcasters who have not yet launched have in common is that they are all much too late and will not be able to meet the deadlines set in their licenses by the time they start broadcasting. Several of them have already received extensions from OFCOM or have pending applications.
The bombshell came at the beginning of November, when the pioneer of second channels - 24 Plus - ceased operations after just one and a half years. Tamedia had not given the channel a chance and therefore excluded it from the takeover of Belcom. The Tamedia decision is a bad omen for all those who are not yet on air. They are no longer as sure of their cause as they were before. "If Radio 24 Plus is shut down hastily, that's alarming," says Sunshine boss Markus Ruoss. He has applied to Bakom to extend the deadline for his Sunshine Gold project by a whole year. "Not only we, but also all other planned second programs have noticed that the preliminary clarifications and market analyses need to be carried out more seriously," says Ruoss, explaining the additional time required.
Full cable networks and excessively high transmission fees
Broadcaster bosses are blaming various reasons for the fading euphoria. Downwardly revised market estimates are only one side of the coin. The most difficult obstacle is unanimously cited as the way into the fully occupied cable networks. Although these networks are constantly expanding their capacities, the additional channels are gone faster than they are created. Another consequence of the shortage of cable slots: Cable network operators are now charging broadcasters money for distribution. In view of the low budgets that characterize second channels, the level of distribution costs can quickly make or break them.
"We want cable distribution for free. Or at least without cash, i.e. we offer the cable provider advertising in return," says Ruoss. "Just like many foreign channels do." Whether the network operators will accept this is questionable, as Radio 32 Goldies, which was launched on October 24, has only just set a precedent in the other direction. The Solothurn second station pays around CHF 100,000 per year for distribution. And this is only for broadcasting in north-western Switzerland. Ruoss: "If you were to convert this to the whole of German-speaking Switzerland, we would end up with an amount of between 300,000 and 500,000 francs for Sunshine Gold." An order of magnitude that he could never agree to. "We're now waiting for the concrete offer promised by Cablecom at the end of November, then we'll see what's what," adds Ruoss.
Marschhalt: Analysis of listener needs on cable
The problem of full cable networks is not new. Two years ago, Ruoss initiated a study that comprehensively analyzed the situation of around 80 radio stations on cable. The study, in which Swisscable, SRG and some private radio stations are participating, aims to clarify which stations are in demand from the public and which are not. The report, which is expected soon, is explosive. This is because it will serve the Swisscable association as a basis for deciding which stations to recommend to its members. This will set the course for which radio programs will be distributed on cable in future and under what conditions. The paper is therefore also eagerly awaited by those responsible for the planned second channels.
However, even if these recommendations for the secondary programs are optimal, i.e. cost-neutral, this is still not enough reason for optimism. "Everything has to be right," says Sunshine boss Ruoss. Among other things, he is looking forward to the results of the usage analysis in the above study, which will give a rough indication of the number of listeners the second channels distributed via cable can expect. In order to clarify all outstanding questions, the latest possible start date stipulated in the license has been postponed by one year. Whether Sunshine Gold will even see the light of day is still very much up in the air. At least that is the answer given by station boss Ruoss to the question of how likely it is that his second station will be launched. "51 percent - or slightly more." The answer reflects the enthusiasm for the new channel, which has been reduced to an absolute low flame.
In the search for cost-effective solutions for cable distribution, all the stops are currently being pulled out. In order to circumvent the distribution costs, some broadcaster bosses want to invoke the switch-on obligation in accordance with Article 47 of the RTVA. 105 Classic has submitted an application to this effect to Bakom. The answer is still pending. Either way, 105 Classic, which has already had the license in the bag for a year, cannot stick to the original timetable. It has also applied to Bakom for an extension of the deadline. "But 105 Classic will start next spring," says 105 boss Giuseppe Scaglione optimistically.
Argovia, which has two cable radio stations in the pipeline, wants to take even more time: Hit Radio and SwissClassicRock. According to the license, both should be launched by December 2001 at the latest. But Argovia Managing Director Roland Baumgartner also wants to postpone the launch by a year. His main argument for the delay: "The costs for cable distribution must be clarified, only then can we calculate properly."
Nobody is under any illusions about income
The reason why new radio programs are in danger of failing because of the distribution costs: you can't earn any money with them, so you shouldn't spend any if possible. The station bosses agree that no substantial income can be expected in the first two to three years. "There is practically nothing to be gained from commercials," says Top boss Günter Heuberger, who has been on air with Top Two for just over a year. He only sees a market for sponsorship. However, he is also aware that he will not be able to recoup the CHF 600,000 annual operating costs for Top Two.
In general, things look bleak for the second channels in terms of advertising. The marketer Radiotele AG has long since waved goodbye. Not a single advertising customer has yet been sold for a secondary program, says Felix Kilchsperger, sales manager of the radio unit. The pressure from the broadcasters, who want to be taken more seriously by Radiotele AG, is not helping. Kilchsperger has clear words for this: "The programs bring neither performance nor extensive listeners to national advertising customers, nor do they open up new groups of listeners. So what's the point?" His assessment of the second channels leaves no room for interpretation. "Who listens to cable radio? It's a shame about the money that broadcasters are wasting on these programs," he grumbles and says: "I would advise private radio stations to invest this money in their first programs, where there is still room for improvement." Kilchsperger does not see any opportunities in the advertising market "with the best will in the world". "If the offers fall through in the bidding phase, I don't see any other way for these stations to get in with advertising clients," he is convinced.
Listener numbers are a hot potato
The most important thing that the new stations lack is listener figures. Such research results would actually be available, as the programs are automatically collected by Publica Data. However, the results are only made public when commissioned and paid for by the broadcasters. And that's where the problem lies. Top boss Günter Heuberger assures us that he has never requested or viewed listener figures from Top Two from Publica Data. "Maybe out of a kind of self-protection," he admits, "maybe I don't really want to know." That is why he cannot provide any information. And this despite the fact that the station has been on cable for over a year.
However, the others are hardly deterred by such unpleasant prospects in terms of listener numbers. Their goals remain more than ambitious. André Moesch believes that his Aktuell 2 can reach "a quarter to a third" of the listenership of the first program. Peter Scheurer is no less optimistic. The station manager expects his 32 Goldies to reach 20,000 listeners after the first year, and even 40,000 in the longer term. "That would mean we would just overtake Musigwälle 531, currently the strongest cable radio station in our coverage area. That is our goal."
The lack of listeners is just one reason for clients not to book. The age spectrum of the target groups addressed also does not meet the current wishes of the advertising industry. This is because the Plus or Oldies programs are by definition aimed at an older audience.
Nevertheless, the two channels already in operation are not free of advertising. But this is only because the commercials from the first program are also broadcast free of charge on the second. This is how Top Two and 32 Goldies do it. However, Peter Scheurer, station manager of 32 Goldies, would like to try to charge "a small additional amount in the region of two francs per second after a year".
Thanks to cheap production, manageable even without income
Such meagre income prospects are only acceptable because the secondary programs are produced at dirt cheap prices. This is made possible by digital studio technology, which can theoretically produce programs by the dozen. One person is enough for handling and announcements - or less: Argovia even plans to employ just one person for both stations, i.e. for Hit Radio and SwissClassicRock. Own productions are therefore hardly to be expected from the secondary programs. In addition to the music carpet, they are largely pure second and third-party exploitation channels of their first programs.
Costs can be kept low with so little effort. Two examples: 32 Goldies uses just CHF 300,000 in operating costs per year. At the other end is Top Two, which spends 600,000 francs. Nevertheless, this is still a lot if no money flows back. So are second channels just cheap playgrounds with a view to DAB, which is a long way off? Aktuell boss Moesch thinks so: "Second channels offer an opportunity to experiment, you learn a lot about handling."
Other broadcasters emphasize the potential of secondary programs in view of the rapidly changing music genres. They are therefore ideally suited as convenient and cost-effective platforms for removing elements that no longer fit into the mainstream. They say that special listener needs can still be catered for on these stations.
Second channels on private radio stations
Regional language Plus variants launched on
24 Plus discontinued on 1. 11. 01
Radio 105 Classic launch postponed
Radio Sunshine Gold launch postponed
Hit Radio launch postponed
SwissClassicRock start postponed
Local/regional Plus variants
Top Two Oct. 2, 2000
Radio 32 Goldies Oct. 24, 2001
Current 2 Start postponed
