Airwaves of unease greet radio plan

By DITA DE BONI

Private radio operators should reach for the antacid - their stomach ulcers may well flare up again in tandem with Government plans for a state-financed youth station.

The proposal is once more before the cabinet.

Labour-Alliance Coalition members will soon debate how to fulfil an election promise to provide New Zealand youth with more news, views, information and music, ostensibly to increase levels of local content.

The issue is a tender one for private radio operators, who believe they already give young people plenty of localised content through commercial radio and are terrified that a Government-financed station will eat into their audience share.

Not to mention the $190 million in advertising revenue the privates collectively collect each year.

A potted history of commercial radio in New Zealand provides a backdrop for the debate.

Under the Labour Government of 1984-1990, airwaves were labelled a valuable resource and about $100 million was raised selling the frequencies to private operators.

The licensing cost for this airspace is still significant for most stations and its value is zealously protected.

Some frequencies were kept aside by the Government, including those now occupied by National Radio, the Concert Programme, iwi stations, community access stations and the like.

These entities are supposedly non-commercial and are not supposed to compete with commercial broadcasters, although some, such as Auckland station Mai FM, do.

In late 1999, along came the National Party in its last gasps, pitching the idea of a self-financed youth radio station on frequencies furnished from the Government's pool of non-commercial bands.

The Labour Party, in the ascendant, also agreed to reserve frequencies for youth radio but said the "exact nature of that network remains unclear".

According to Labour policy documents of the time, "the network can be a mix of community station and student radio with a link to commercial radio".

The Alliance raised the possibility of a youth radio network based on the Australian Government-financed Triple-J network.

Private operators were horrified and quickly moved to quash any such initiative. They sent representatives to lobby incoming Broadcasting Minister Marian Hobbs, who assured them that the jury was still out on the idea.

Labour, as it turns out, was too busy in its first year of office and put the idea on the backburner, to the relief of private broadcasters - mainly CanWest-owned Radio Works (More FM, Radio Pacific, The Edge, Solid Gold FM, Channel Z and The Rock), Wilson & Horton part-owned The Radio Network (ZM, Hauraki, Newstalk ZB, i98 FM, Classic Hits 97 FM) and about 15 independent stations such as Rhema and the B.Network, consisting of seven student radio stations, including bFM in Auckland.

Most private stations belong to the Radio Broadcasters Association, which continues to lobby against the idea of a taxpayer-financed station and has reportedly proposed a partnership with the Government, believing its members can best reach young people without sabotaging everyone's revenue.

Ms Hobbs will not comment on the idea. A spokesman for her office simply says a range of options are before the cabinet, including a possible joint venture with the private sector to provide "improved and enhanced radio services for the youth of this country".

The Labour-Alliance Coalition is understood to be far from unanimous about the nature of a station.

Labour is thought to be keen on involving the private sector, either by requiring the networks to provide a certain amount of local content as a compromise measure or through a joint venture.

But the Alliance, specifically Youth Affairs Minister Laila Harre, is understood to be hot on a Government-financed station.

A budget of $4 million has been bandied about.

Ms Harre says she can only respond in the most general way to questions from the Business Herald.

"Youth radio is currently under consideration by the Coalition and there are complex issues to be worked through," she says.

"We are well aware of the arguments for and against a Government-funded youth radio network and they are all under active consideration."

Along with the broadcasters' association, the B.Network is also busy faxing off its objections to state-financed youth radio.

Spokesman Joe Dennehy, head of Waikato University's UFM, says the B.Network received a "categorical assurance" from Ms Hobbs before the election that if there was to be a youth radio network, the existing Government-financed stations, including the student stations (which receive part-funding of $450,000 from New Zealand On Air), would be part of it.

Ms Hobbs' spokesman denies that the minister would have promised such a thing.

Mr Dennehy says the B.Network "is not opposed in principle to a service to all the youth of New Zealand which is slightly alternative or non-commercial".

"But we kind of think that's us.

"It's silly to say the youth of New Zealand are not being catered for - it's bananas to say that.

"Without doubt country kids probably have trouble accessing our [student] stations, which come out of the main centres," he says.

"But what we're saying to the Government is that for a whole lot less than $4 million we can expand our signal and provide the same service to all youth."

Mr Dennehy says that as well as the student radio network, stations such as Channel Z and the Edge cater for New Zealand music requirements and provide talkback and other "infotainment" slots.

"As I understand it, the issue has re-arisen quite probably at the insistence of Laila Harre ...

"With the Alliance looking to rebrand itself, they probably want to hold up a few trophies like the People's Bank, the All Blacks on TV and the youth radio station.

"It just seems like a cynical re-election or rebranding ploy," Mr Dennehy says.

In fairness, youth radio proponents and musos Neil Finn and Arthur Baysting offer another reason for the proposed station: to use it to fight the country's high youth suicide rate.

To which Mr Dennehy replies: "New Zealand has the highest rate of banana consumption in the world - should we have Government-funded banana shops?"

Most importantly, he is worried that advertising on B.Network stations will suffer because the youth market eyed by a Government station (all teenagers) would heavily overlap with the student network, which tends to be popular with 15 to 19-year-olds.

Another who agrees that the advertising market may be badly affected by a taxpayer-financed youth station is Gill Stewart, head of The Radio Bureau, which places about 90 per cent of all radio advertising.

"The main area of concern is that this network would inevitably compete for audience in a segment which is already well catered for ...

"Cannibalisation of this key target audience is likely to impact on advertising revenue for existing players and thus affect the economic viability of niche stations such as the student radio network, Channel Z and Mai FM," she says.

Mike Howard, communications strategist with media company Carat, says the Government's plans threaten to make a difficult year in advertising even harder.

"If they say they are doing this to support the local industry, I would say, bollocks," he says.

"They will not be delivering anything more than is already delivered.

"The worst possible scenario is that we could see a reasonably significant withdrawal of funds from radio advertising, simply because of lower effectiveness," says Mr Howard.

"It seems to me the Government is more intent on making life even more difficult for broadcasters rather than doing something to stimulate the economy."

Ms Hobbs' spokesman says a decision on youth radio should be made public within two weeks.