Mak­ing waves

Not so big hit­ters beat odds in com­mer­cial ra­dio

Finweek English Edition - - Business Strategy - CHIMWEMWE MWANZA chimwemwem@fin­week.co.za

IN THE RE­CENT BAT­TLE for a com­mer­cial ra­dio li­cence for Lim­popo – that pit­ted high fly­ers such as Sello Rasethaba, Moss Ngoasheng and Nk­wenkwe Nkomo against one an­other – you could be for­given for dis­count­ing the Simphiwe Md­lalose- and Given Mkhari-led MSG con­sor­tium.

In fair­ness, they were up against heavy hit­ters in the black eco­nomic empowerment deal arena. If the trend back­ing the usual sus­pects – a turn of phrase coined to de­scribe the same se­rial empowerment dealers who have helped them­selves to high value deals – were a mea­sure of progress, the Md­lalose­and Mkhari-led con­sor­tium stood no chance. Yet MSG tri­umphed against the odds. That pretty much sums up the rise of Capricorn FM, Lim­popo’s year-old (yet SA’s fastest grow­ing) com­mer­cial ra­dio sta­tion.

“It’s sheer determination and the need to ex­ploit an op­por­tu­nity that prompted us to bid for this li­cence. I think reg­u­la­tor Icasa’s li­cence is­su­ing of­fi­cers weren’t re­ally looking for big names but a con­sor­tium that had a com­pelling busi­ness strat­egy,” says Md­lalose, who is now CE of Capricorn FM. “Our re­search in­formed us of the need to cre­ate a sta­tion that would solely fo­cus on the life­style of the prov­ince’s grow­ing black mid­dle class mar­ket.

“The SABC’s three ra­dio sta­tions – Tho­bela FM (which mainly tar­gets the Pedi speak­ing group), Muzane Lonene (the Tsonga) and Pha­laphala FM (the Venda) – didn’t ad­e­quately ad­dress the pref­er­ences of the mid­dle class un­til we came on to the scene,” says Md­lalose.

While the three ex­ist­ing sta­tions are splin­tered in their seg­men­ta­tion, Capricorn’s man­age­ment elected to adopt the po­si­tion of a uni­fier. In fact, the name Capricorn is de­rived from the Tropic of Capricorn, a line that cuts east to west across Lim­popo prov­ince. “Some 70% of our broad­cast is in English, with other African lan­guages cov­er­ing the bal­ance,” says Md­lalose.

That racially in­clu­sive strat­egy is telling in the sta­tion’s early suc­cesses. Barely 10 months into its launch Capricorn ex­ceeded its tar­get of achiev­ing 1m lis­ten­ers in Septem­ber. Fig­ures re­leased last week by the SA Ad­ver­tis­ing Re­search Foun­da­tion show Capricorn FM – sit­u­ated in the Polok­wane sub­urb of Ben­dor – now has 1,5m of Lim­popo’s 3,3m ra­dio lis­ten­ers.

“As a new en­trant in the mar­ket we also fo­cused on be­ing in­no­va­tive and fresh. That helped us to as­sume mar­ket lead­er­ship from launch date,” says Md­lalose. “We re­ally changed the prov­ince’s ra­dio land­scape.”

In­deed, some of the feed­back Md­lalose gets from lis­ten­ers is that Capricorn has be­come a ma­jor fea­ture and life­style bench­mark in the lives of Lim­popo’s peo­ple. The sta­tion’s break­fast show – hosted by for­mer Y-FM disc jockey and TV funny man Shonisani “Ashifa Shabba” Muleya – is so far

De­spite the chal­lenges, the sta­tion has still

been able to at­tract no­table

ad­ver­tis­ing heavy­weights.

prov­ing to be one of the big­gest draw­cards in Capricorn’s pro­gram­ming.

And there are awards to back Md­lalose’s claims to suc­cess and for­tune. Early this year the sta­tion was awarded the Pro­fes­sional Man­age­ment Re­view Award for ex­cel­lence in over­all en­ter­tain­ment. An­other feather in its cap was com­ing sec­ond in the pro­vin­cial Best News and Cur­rent Af­fairs cat­e­gory at a glitzy cer­e­mony held re­cently. In a sure sign of pro­jected growth, Md­lalose ex­pects Capricorn’s cur­rent staff com­ple­ment of 46 full­time em­ploy­ees to swell over the next cou­ple of months.

While the sta­tion has yet to make its maiden net profit, Md­lalose is cau­tiously up­beat. “The volatile fi­nan­cial mar­ket will cer­tainly have a neg­a­tive im­pact on the ad­ver­tis­ing ex­pen­di­ture of big cor­po­rates, but the sit­u­a­tion should sta­bilise in the fore­see­able fu­ture.”

Yet, de­spite the chal­lenges, Md­lalose says the sta­tion has still been able to at­tract no­table ad­ver­tis­ing heavy­weights, in­clud­ing cel­lu­lar group MTN, fi­nan­cial ser­vices group Stan­dard Bank and pay-TV pur­veyor DStv, as well as both na­tional and pro­vin­cial gov­ern­ments.

“Our ob­jec­tive is to dom­i­nate the prov­ince’s ra­dio land­scape. Then we can go back to po­ten­tial ad­ver­tis­ers and say: ‘This is the kind of ex­po­sure we’re giv­ing you.’ And we’re not be­hind in any of the tar­gets we’ve set,” says Md­lalose, adding he’d been con­fi­dent about the sta­tion’s pop­u­lar­ity from day one.

In a move to broaden the sta­tion’s eq­uity struc­ture, both Md­lalose and Mkhari have sig­nif­i­cantly whit­tled down their eq­uity in the com­pany. Nearly 64% of eq­uity has been dis­posed of to lo­cal com­mu­nity groups. It’s a strat­egy man­age­ment hopes will give the lo­cal peo­ple some sense of own­er­ship. But it also guar­an­tees Capricorn a foothold in that mar­ket.

Shak­ing up the com­mer­cial ra­dio land­scape. Simphiwe Md­lalose

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