Radio Industry Faces ‘Extinction’

 It is no doubt that several radio stations are on sale. This has come
as a shock to many. But expert predict the radio industry in Uganda is
facing tough times. According to boffins, this will only get worse.
Years ago radio was one of the most lucrative businesses in Uganda.
With a few million shillings you would apply for a radio license and
frequency and order for equipment and start operating your station.
The total cost would be about shs30 million shillings. In a few months
your bank balance would be smiling with hundreds of millions of
shillings. Then advertisers had few choices to make of the existing
stations. There were only about 6 radio stations in Uganda. In this
day and age although it looks fashionable to own a radio station, the
radio industry is in bad shape. Many stations operate without profit
and others cannot even meet their costs of operation. Some are grossly
indebted and are about to close. Most of the owners stay on air not to
lose their pride. Few stations like Martin Sempa’s Jazz FM, Arien FM
in Old Kampala are on sale. Just a few months back Patrick Bitature
sold Dembe FM to Nation Media. There are about 205 stations in Uganda
and 67 stations in Kampala alone. As such because of cash constraints
and targeted choice, most advertisers prefer advertising on the top
few stations. With such scarce

revenues most radio stations struggle
with several reports of not paying staff, not being able to pay rent
or even electricity bills.

Patric Bitature
Current Costs of Setting up a Station
The current costs of setting up a radio station include: Shs200
million for license fees and frequency, shs150 million in equipment
and around shs200 million in other startup expenses.
Costs of Running a Radio Station
The average cost of running a station in a month is shs60m to shs70
million. In one year this amounts to about shs700 million. Yet most
stations cannot make even 10 percent of this money.
Current Economic Woes
The current economic crisis has worsened things for the radio
industry. Not only are costs of operation higher, advertisers are
scaling back on advertising to adequately meet their own cost of
operations.
Telecom Wars and the Dip in Radio Advertising
The entry of Warid Telecom into Uganda’s telecom market saw changes in
call rates. In turn because of very low rates telecoms could not
maintain their previous bid advertising budgets. This affected radio
especially because in the past a radio station would exist on a single
telecom company. As a result many stations after a few months on air
would want to sell their stations. However because owners want to
regain their money spent, they price their radio stations in hundreds
of millions of shillings. Some have huge debts in their cupboards
making their stations hard to buy.

 

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