Cairo Magazine - Radio wars

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.”