And the top 5 things that matter on that dayAugust 30, 2015 8:55
Tuning in to Jordan
The Hashemite Kingdom has a population of only 5.1 million, yet its airways carry 30 radio stations. Why is the medium so appealing, and what does it take to succeed?
March 26, 2009 10:54 by Nathalie Bontems
Since their liberalization in 2004, Jordanian airwaves have been vibrating with new programs. Later this month, Virgin Radio Jordan will be the latest addition to an already overcrowded landscape.
In a country where radio stations are the only form of media not submitted to strict state-control or tight regulations, investors are easily attracted. “Radio stations are easier to launch than other media,” says Mohammed Jarrar, senior media manager at Ipsos Jordan. “Unlike the press, for example, they don’t require a major initial investment and sustained effort to work; music content is available, and so on.” Indeed, in the five years since Jordan’s government opened up the country’s airwaves to private broadcasters, radio stations have mushroomed throughout the Hashemite Kingdom. Some harbor mere local or prestige-related ambitions, and others, such as Virgin Radio, are international brands pursuing expansion plans.
Each to its own. But when does more become too much? With most broadcasters established over the last five years, a total of around 30 radio stations might seem a little excessive for a country with a population of 5.1 million people.
Yet impressive growth rates in ad revenues may belie this theory. According to studies carried out by Ipsos, total ad revenue in Jordan surged by 10 percent last year, from $275 million in 2007 to $303 million in 2008, and revenues generated on radio stations enjoyed a disproportionate 25 percent growth, from $20 million to $25 million. This could be because the owners of radio stations not only want to be more dynamic, but also are allowed to be so. “There’s laziness and tough regulations in other media, so advertisers have to find other channels,” says Jarrar.
“Budgets that would go to television elsewhere go to radio in Jordan,” says Paul Hanna, managing director of Specom Jordan, a branch of Lebanese media sales company Specom that expanded to the kingdom in 2006.
But, as usual, monitored spend doesn’t tell the whole truth. “We must keep in mind that these rate cards figures are not the reality of the market,” says Jarrar. “The average discount rate is more than 70 percent and some radio stations go further. To get clients, it’s a dog fight; in that regard, [Jordanian radio station owners] are the nastiest in the region.”
Specom Jordan is the kingdom’s only media representation company, in the sense that it doesn’t own any of the media it sells, whereas the vast majority of radio stations handle their sales in house, without any professional advice from a third party.
This lack of consultation leads to some unrealistic pricing. “Prices aren’t usually set according to any rational criteria, and they are too high for such a limited market,” says Hanna. “At first, all stations were obliged to align their rate cards to that of the first station to launch, Radio Fann. Today, Sawt el Ghad has the lowest prices in the market, but generally the price-to-quality ratio remains inadequate.”
No wonder, then, that only around 15 of the 30-odd existing Jordanian stations are really competitive, say industry watchers. “Among these 15, the five leading stations share around 70 percent of the total ad spend,” says John Saad, managing director of the soon-to-air Virgin Radio Jordan. “Basically, sales rely on acquaintances and networking. Jordanians are aggressive in business, by definition, and everything is allowed.”
Except for a happy few, most Jordanian radio stations are increasingly losing money, despite a general boost in ad revenues.
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