RJR looks overseas as rivalry heats up at home
Avia Collinder, Business Writer
Radio audiences are down while television audiences have grown, according to the latest All Media survey.
Radio is also contending with shifting brand loyalty among high- and medium-income listeners along the way.
The uncertainties of the local media landscape, occasioned by reduced revenue alongside a depressed economy, even as the market opens up to new rivals, has pushed the RJR Communications Group to seek out new markets further afield - Africa.
The new strategy is driven by a need to diversity income streams in order to drive up top line revenue. Sales fell at yearend March 2012, and half-year trends, even if only three per cent lower, indicate that they might fall again at the close of FY 2013.
RJR Group currently owns seven brands in radio, television and cable - RJR 94FM; FAME 95FM; HITZ 92FM, Television Jamaica (TVJ); Reggae Entertainment Television (RETV); TVJ Sports Network (TVJSN); and Jamaica News Network (JNN) - as well as a production company, Multi-Media Jamaica Limited.
watching the market
The company, by looking overseas, is basically playing it by ear, but has been encouraged by summer collaborations.
"Without more detailed market research or actual spending trends to analyse, we would not speculate on specific numbers," said RJR Managing Director Gary Allen.
But: "TVJ's successful collaboration with OH TV and BEN TV in London during the summer simulcast of 'Smile Jamaica' has confirmed the demand by local companies targeting diaspora markets to advertise to that market," he said.
The diaspora market, he said, is interested in subscribing to some of that content. "The cache of Jamaican content in both Ghana and Nigeria that (was) picked up ... also showed that subscription revenue at the very least is available from those markets as well," he said.
Allen is one of a handful of journalists who have transitioned from the newsroom to the boardroom. He has managed RJR group since 2008 - mostly profitably.
At yearend March 2009, the group reported losses of J$140 million, but made a strong turnaround the next year to profit of J$222 million. Since then, however, profits have been waning - it made J$133m at yearend 2011 and J$87m at yearend March 2012 - and this period, RJR appears set to fall back into the red, having reported HY losses of J$23m up to September.
It's the trend in those numbers that forced the media group to take aim at new markets.
"The continued expansion of the group's reach to the diaspora with real time and on-the-go radio and television services should lead to further growth in revenues in subsequent periods," said its June first-quarter earnings report.
Allen declined to quantify opportunities in markets being pursued.
"Where we have not signed specific contracts, we would not disclose our target numbers but when agreements are reached we would do so," he said.
The majority of overseas viewers and listeners for the company's products currently come from the United States, followed by Canada, the Caribbean and then the United Kingdom.
A recently test transmission of Smile Jamaica in the Caribbean market got positive results, Allen said.
The company is also banking on sporting coverage to drive interest in its content.
"A 10-year strategic content acquisition strategy, announced in September, is an investment of almost J$1 billion over 10 years which is designed to use critical content to grow and secure market leadership into the decade," said Allen.
Under its 10-year deal with International Media Content (IMC), RJR has secured the exclusive broadcast rights to the 2018 and 2022 FIFA World Cup Finals in Russia and Qatar, six Under-17 and Under-20 World Cups, two Confederation Cup tournaments and coverage of the FIFA Women's World Cup.
Coverage will be driven through its TVJ, Hitz 92FM and TVJ Sports Network platforms.
demand for ja content
Allen said while further market testing is required, the Olympics proved conclusively that there is demand for Jamaican content beyond its shores with the company, prompting the company to move aggressively to pick up market share.
"The London 2012 project was a major project for the year in which over J$50 million was invested. An online and IPTV development project costing over J$10 million with medium-range returns was also made," Allen said on Tuesday.
The volatility of local markets is motivation enough to widen revenue sources to diversify geographically. But, the radio market is also increasingly more crowded.
According to 2011 All-Media Survey, flagship radio brand RJR FM has lost some market share in the grouping of 23 radio stations, moving from 13.6 per cent of radio listenership to 13 per cent. Listenership for music station Fame FM also declined by two percentage points to three per cent.
The Hitz 92 brand, however improved listenership, moving from 9.6 per cent to 9.9 per cent.
Newcomer, Sun City radio in Portmore has 2.1 per cent of the market, while Mello FM sprouted from 2.8 per cent of listenership in 2010 to 8.5 per cent in 2011.
More competition is set to emerge with the Jamaica Observer-connected station now testing on band 105 ahead of its launch.
Overall, the RJR group retains 25.6 per cent of total radio market, down from a 28.5 per cent.
Allen says the group's investments also include spend in staff retraining and technology skills development.
"Our staff remains absolutely invaluable in our planning and investment strategies going forward," he said.