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From: “Katia M. Peltekian” <kpeltekian@yahoo.com>
Subject: Cairo: Radio wars
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Cairo Magazine, Egypt
July 22 2005

Radio wars

Private stations are reaping the profits of liberalization and
state-run stations are scrambling
By Summer Said

Since their launch in July 2003, Egypt’s first two private radio
stations have stormed the airwaves, challenging the decades long
state monopoly on radio and bringing a new sound and style to ears
across town. Record companies as well as listeners are taking notice.

Asking taxi drivers around Cairo, it is rare to find one who dosn’t
know the names of the stations’ on air personalities. The two new
stations, Negoum (100.6 FM) and Nile FM (104.2 FM), are nailing down
new audiences as they poach long-time listeners away from state-owned
radio and attract new listeners with expansive playlists of Arab
hits.

They are forcing state-owned radio stations to re-evaluate their
methods driving up the radio advertising market and angering record
companies who complain of declining sales.

Hatem Mounir, station director at Negoum, claims his station has
revived the Egyptian and Arab music market by increasing artists’
exposure.

`If you look deeply into what we are doing you will find that we are
making singers very popular so people know more about them,’ said
Mounir. `So instead of spending thousands of pounds on the making of
a video clip to make the singer popular, the producer just gives us
the CD and we air it for free.’

Record companies don’t see it that way and have even threatened to
ban Negoum and Nile FM from playing their company’s artists. Negoum
has secured rights to air 90 percent of all Arabic music production,
which has resulted in declining sales as listeners tune into the
radio instead of buying CDs.

Mohsen Gaber, head of a local record label under the umbrella of the
Saudi-owned Rotana Record company, said that his sales have declined
by at least 30 percent since the launch of the private stations.

`It is true that the stations make your artists more popular but
people no longer need to go and buy the album as they can just turn
on the radio,’ Gaber said.

Advertisers are feeling the heat as well. The quick success of Nile
FM and Negoum has pushed up demand for radio advertising, which has
had the expected impact on prices.

According to a report released by the Arab Advisors Group’s Media
Strategic Research Service, Egypt’s radio ad revenues have
skyrocketed since the launch of the two private stations. As of
April, subscribers in Egypt had the highest average peak rate for FM
radio advertising rates in the Arab world.

Vodafone and MobiNil were quick to buy large advertising slots on
Negoum and Nile FM. Major advertisers like Pepsi, Coca-Cola and Raya
are competing for peak time slots when millions are listening.

The private stations success has caught the Egyptian Radio and
Television Union (ERTU) by surprise. The ERTU oversees advertising
for state television and radio. With the luxury of relying on
generous support from the Ministry of Finance, ERTU bookkeeping has
lapsed.

The same month that the private stations went public, ERTU, became
financially independent from the ministry for the first time. To
cover their debt and balance their books, they immediately moved to
double advertisement rates. With no comparable improvement in
service, the price increase shocked advertisers.

`An advertiser now pays around LE600 per 30-second spot on one of the
state-owned radio stations, the same ad he used to get for LE300,’
said an official at Radio ONE advertising agency in Cairo. `He can
get a more fresh sounding ad on Negoum or Nile FM for the same price
and have thousands of people attracted to his product.’

According to Radio ONE, all the recent market research shows that at
least 70 percent of Egyptians listen to Negoum and Nile FM. Demand
for radio advertising has in fact increased in the last couple of
years – despite the fact that prices were raised by 10 percent last
year.

The Ministry of Information, still influenced by an old guard long
opposed to the liberalization of Egypt’s airwaves, was not keen to
grant the two stations a license. Negotiations with the government
took three years, according to Rania Helal, marketing boss at Nile
Radio Production, the company that owns Nile FM and Negoum.

`The government always saw that radio is a very sensitive medium that
can be used against them, but at the end they trusted us,’ she said.

And indeed, the quick success of Nile FM and Negoum has forced a sea
change in attitudes at state-owned radio stations, now keenly aware
of the challenge they face in retaining – and winning back – market
share. Radio Cairo’s Aghani (Songs) station has cut down the chatter
and raised the tempo with more up-to-date hits, in an effort to match
the faster-paced private stations.

Radio Cairo’s European Local Service, which transmits a selection of
English, French, German, Italian, Armenian and Greek music on 95.4
FM, has totally revamped 90 percent of their radio shows.

Still, some state radio officials maintain – dubiously – that the new
private radio stations present no threat to their audiences.

`The two new stations are in Arabic and English only and offer music
shows and light talk show programs,’ said Basma Habib, head of Radio
Cairo’s European Local Service. `We, on the other hand, transmit in
six different languages and have all kind of shows that are widely
respected by people here.’