The future of South African online radio

Every traditional medium is facing its own unique struggles to adjust to digital competition for audiences and advertising revenue. This is certainly true for traditional radio, which is being challenged by digital disruptors. Ntombizodwa Makhoba investigates how radio in SA is dealing with digital disruption.

Gareth Cliff, the founder of CliffCentral, says online radio is a sustainable and lucrative business, only if you have an exceptional business model and a great team behind the brand.

But some radio experts disagree with him. Radiomonitor managing director, Jarrod Aston-Assenheim, says an online radio station’s sustainability is not guaranteed, while traditional radio is still winning.

Radio activist and former Metro FM and Touch HD station manager, Martin Vilakazi agrees with Aston-Assenheim: “Online radio is a new model and a niche industry. It’s sustainability is not guaranteed and commercially viable.”

Vilakazi tells #Trending that if you want to run a successful online radio station, you need to have fully branded shows partnering with big brands to get advertising revenue.

“If one wants a sustainable business, your radio platform has to offer content that is unique. People must tune in, because you are offering something that traditional radio doesn’t offer,” Vilakazi says.

EXPENSIVE DATA IS THE REASON ONLINE RADIO IS DYING

Aston-Assenheim says it’s sad that online radio stations are phasing out because of lack of advertising revenue. He says most online radio stations have failed because data is expensive in South Africa and these platforms have been struggling to get the right formula.

Aston-Assenheim says that it’s about time the general public speaks in one voice and lobbies service providers to bring down data prices.

“If you’re not generating advertising revenue, it’s impossible for you to make profit,” Aston-Assenheim says.

Newly appointed Soweto TV CEO Thabo “Tbo Touch” Molefe, who launched Touch HD two years ago, shares the same sentiments with Aston-Assenheim. He says the fight to bring down data costs has yielded results with more opportunities for online platforms to mushroom over the past few months.

“Look at Marawa TV [sportscaster Robert Marawa’s platform], and other similar platforms. Online radio’s success in South Africa is inevitable. We need more allocation of spectrum to enable more players in the data network space,” says Tbo Touch, adding that fibre [internet] is rolling out in townships which makes it the right time to invest in online media.

Vilakazi feels that the other reason online radio fails is because many online radio stations treat their platforms as an alternative to traditional radio. “People must bear in mind that not everyone will leave radio for online radio. Just because you are a famous DJ and you are running online radio doesn’t mean people will replace traditional radio with online,” he says, adding that people’s first choice will definitely be listening to traditional radio because it is free to access.

WHY CLIFFCENTRAL IS STILL STANDING

Cliff, who has been running CliffCentral for five years, says the station is more than online radio, but actually a hybrid of content creation, online distribution and a live streaming platform as well as strategic consultancy for content and social media marketing for clients.

“If we were only an online radio station we’d have been much more limited and probably not as sustainable. We still have a long way to go, but we have pioneered this field and continue to innovate to stay ahead,” Cliff says.

Although it’s still unclear how long it took CliffCentral to break even as a business, Cliff says because of his business partner Rina Broomberg’s and his own experience in radio, they have managed to develop a lot of relationships in business.

That meant they could go into this venture with a “degree of confidence and some appreciation of the risks”.

“We were fortunate to have support from day one – from sponsors and my own loyal listener base – who followed me to CliffCentral,” he says.

Five years on, the CliffCentral online platform has more than 60 000 app downloads and 38 000 newsletter subscribers. For several weeks we tried to access online radio data, only to be reliably informed that the online radio report would be released early next month.

“I can guarantee you online radio stations that are in existence actually don’t have more than a listenership of 10 000,” Aston-Assenheim says.

Cliff says they are sitting on an average of 100 000 live connections a month and 250 000 podcast downloads.

“Some topics attract more downloads than others. But overall, more and more people are finding podcasts [useful] and it’s steadily growing,” Cliff says.

Cliff says when they started CliffCentral it wasn’t a walk in the park. He describes it as roller coaster ride and challenging at times.

“The basics of any business – cash flow, hiring the right people, unlocking the doors in the morning, creating a quality product and doing deals – but in an environment where when we started, there was no blueprint, we had to do some heavy lifting,” he says. “A lot of people thought we would fail but we’re here to stay and [we are] growing.”

But he admits that as an online digital platform, they still have a long way to go, although they have pioneered this field and continue to innovate to stay ahead.

“The real value is only being realised now as every business is a broadcaster and helping everyone to create their own podcast content to grow their own audiences,” Cliff says.

Aston-Assenheim tells #Trending that podcasts are popular and most online platforms generate advertising revenue through podcast subscribers.

However, he warns that commercial radio should not be threatened by online radio, which he says has at least five to 10 years to get the right formula.

Tbo Touch, who launched an audio visual content platform – THD24 – a few months ago, says the new platform will compete with rival services such as Naspers’ Showmax, currently run by MultiChoice, Netflix and other subscription-based streaming services.

He adds that the reason he moved Touch HD to THD24, is because audiences are interested in seeing visuals more. “Radio is the theatre of the mind. It’s always important that you give your clients more value, otherwise you will lose your audience,” he says.

In the past few years, a number of radio personalities have quit their day jobs on commercial radios to start online platforms.

They include the likes of Sbu Leope, who owns Massiv Metro, and former Ukhozi FM’s personality Ngizwe Mchunu, who launched Ngizwe Mchunu FM. The Durban-based radio personality says Ngizwe Mchunu FM plays mostly traditional music.

“I am excited about the feedback from my followers. I am not going to commercial radio anytime soon. I am living my dream,” Mchunu says.

Cliff’s advice to anyone hoping to start an online radio station is: “Anyone can start an online platform, the barriers to entry are low. But like with any business, you need to be sure of your purpose and have a solid business plan and content that attracts an audience.”