Radio Licences May Be Auctioned

flogen

http://www.rte.ie/news/2004/0713/radio.html

The Minister for Communications, Marine and Natural Resources Dermot Ahern has said that radio licences may be auctioned to broadcasters.

Publishing a report on radio licensing, Mr Ahern said that licence auctioning may be a fair way to distribute the right to use what he described as highly-valuable economic resources.

There may be a big shake up coming to radio licences at the hands of Ahern.
In my opinion the idea of auctioning licences is a dangerous thing, as it is likely to narrow the market to bigger players. For example, if auctioning was to be in place for the 2 new Dublin licences that are up for grabs, I would predict that Phantom FM (a station I am an advocate of) would not be able to compete with UTV's proposal, and not on the basis of its quality, but the money it has.
given that Spin, Q102 and Newstalk, the latest Dublin stations are all still running at a loss, despite at least two being owned by big businesses or businessmen, it is becoming aparent that any new station must have a low cost base in order to compete, therefore financial backing is not the most important thing (and if it was, smaller stations would use all their resources bidding for the station).
I welcome the decision to look at the way in which licences are granted, as there is room for improvement, and I also welcome the proposal to introduce a body for people to challenge decisions on licences, but making new radio a rich-only venture is sure to damage radio even more, and is only encouraging big media companies to own masses of stations across the country.

flogen

kittex

This is such a dangerous idea.

The licensing system should be there to ensure audience needs are met, not that we get 10 identical commercial stations in each city owned by Uk groups like Capital or Scottish Radio Holdings. And Emap is looking to get in on the next Irish licence as well according to reports.

Is Ahern wanting to cover things by making sure whoever buys the licences can actually afford to run at a loss for a while?
Knowing that the market's pretty full with alot of similar stations...?

I think the average radio listener in Ireland wants diversity and choice not quantity at teh expense of quality.

leeroybrown

When Dermot Ahern is describing them as "highly-valuable economic resources", it's safe to assume that there has been a ringing sound somewhere in the back of his head acompanied by the symbol € and the phrase "cash cow". I'm guessing they've seen the profits that is being made by some radio stations and are thinking of cashing in like they did for mobile phone licences.

flogen

Originally posted by leeroybrown
When Dermot Ahern is describing them as "highly-valuable economic resources", it's safe to assume that there has been a ringing sound somewhere in the back of his head acompanied by the symbol € and the phrase "cash cow". I'm guessing they've seen the profits that is being made by some radio stations and are thinking of cashing in like they did for mobile phone licences.

your right about the € signs floating around, but I think its in relation to Country FM (correct me if I'm wrong, it may be a different station), who paid the standard licence fee of a few thousand euro, and then sold up for many millions. Ahern realises the current price is a bargain, and it should be the government making the millions, not companies.
Radio shouldnt be about money, obviously its important to ensure a station can afford to run itself, but thats it. The problem with making things too commercial is big companies need to get big listenership to keep money up. They do this by appealing to the LCD, just like everyone else. A small base company running on a niche style is the only way the Dublin (and other) airways should go.

flogen

Genghis

I agree with your every word flogen, but I can also see Aherns point of view. The reality is that stations go through a cycle from 'Bid / Win / Establish / Lose Money / Make Money / Sell at inflated prices'. That cycle is narrowing all the time, and so perhaps the minister has a right to demand inflated licence fees - for example, FM104 went for a huge price, but only after 10/11 years on air - any 'capital gain' here was deserved by the management team since they had spent so long 'creating the value'. On the other hand Lite FM changed hands approximately 2 years after going on air, also for a high price - in this case the shareholders gained not on the 'value created' (which was so low it needed to be re-branded), but on the 'scarcity' value of a Dublin licence. It is certainly fair to comment that the shareholders of Lite FM were less deserving of their money than those of FM104.

Mr Ahern did have another idea, whereby the state would be entitled to 50% of the proceeds of the sale of a station if that sale were to take place within a certain period of time. That might be a more effective mechanism than an auction process.

chewy

did i hear they re giving out the license next week to bidders which includes phantom? good luck


i think ghengis idea is far enough... i think the only way people could profit is if theres a good bit variety out there... i wouldn't mind seeing some money go to gov in the vain hope it trickles throught to us rather then few individuals

flogen

Originally posted by chewy
did i hear they re giving out the license next week to bidders which includes phantom? good luck


i think ghengis idea is far enough... i think the only way people could profit is if theres a good bit variety out there... i wouldn't mind seeing some money go to gov in the vain hope it trickles throught to us rather then few individuals

From what I understand of the two new Dublin licences is that as of last week the official bids have been placed (one is a rock/alternative specialist licence, the other is an multi-cultural specialist licence), and each proposal will be available from www.bci.ie from tomorrow.
The deliberation on the licence is due to begin some time in September, and I would expect a winning applicant to be chosen by November, December at the very latest.

For anyone interested, the proper bids are available to view here, with the detailed applications made public from tomorrow.

The idea of the government recieving a cut of any sales of stations is the perfect solution IMO, it means everyone with a good idea should have an initial chance against big money backers, and the government can still benefit from the profitability the Irish airwaves can create,

flogen