Some say Big FM never quite got its demographic sorted but its community radio rights are a major asset
One of Auckland's few independent media voices is being sold.
Big FM 106.2 launched in November 2008 with 10-year community radio rights and the promise of big things to come.
But with founder radio veterans Larry Summerville and Bernie Brown long gone, a sale process is expected to close next week.
Big FM paid $800,000 for radio rights and the remaining 8 year term will be the major asset. It was a bargain rate for a strong Auckland FM frequency, but a big overhead for a company competing with two dominant radio companies, The Radio Network and MediaWorks. No one will be surprised that the station with its limited marketing firepower stayed small.
Said one music industry veteran: "They are nice guys but the demographics were odd - you'd have MGMT followed by Lionel Ritchie - an urban adult contemporary station that drifted into cool stuff."
Others question its prospects launching as New Zealand drifted into recession.
The 106.2 FM "community" frequency was established by Labour to limit MediaWorks and the Radio Network power to shut indies out of Auckland. Similar licenses were issued in Dunedin and Christchurch,
Corporates are willing to pay big prices for Auckland FM frequencies, which are sold for as much as $6 million. With Auckland - and the whole country - split in two, they lobbied against the special community licence that disrupted the duopoly.
Advertising consultant Martin Gillman says that radio has always done well as a retail advertising proposition, but he was never sold on Big FM: "It was a "me too" station that was launched into a very mature market," he said. "It used some very old-school practices and was not doing anything that was different."
BROTHERS
Big FM director Jeff Down said that Summerville left last year. He confirmed that Big FM was being sold but wouldn't discuss talks.
The prospective buyer is Richard Kirby, with an offer rumoured at around $2 million. Kirby is the brother of broadcasting veteran Thane Kirby who is a director of Luke Dallow's low-powered station Radio Ponsonby.
But it is understood that Dallow and Ponsonby FM have no role in the Big FM sale negotiations. The Kirby brothers worked together at George FM, where Richard ran sales and marketing.
GOING, GOING ...
Prospects for a new Paul Henry television show are slim, but not quite dead.
State television bosses have begun sharpening knives for the next round of staff and budget cuts. I hear that TVNZ has been chatting with a producer who would revive the concept of a a 5.30pm, or more likely 5pm, Henry show as a lead in to One News.
One name mentioned is Briar McCormick, a former Holmes producer who recently returned from London with her partner - former TVNZ Europe correspondent Mark Crysell. McCormick is the daughter of former Act MP Deborah Coddington and respected in the TV scene.
Love him or hate him, Henry has a following that would translate into ratings and advertising revenue.
With TV3 dumping Sunrise there is no need for TVNZ to invest its drawcard in a timeslot where his revenue earning potential is wasted. Henry is over Breakfast.
He could be replaced by the significantly cheaper Tim Wilson who is a favourite of Anthony Flannery. If Wilson came back, TVNZ could close the largely irrelevant New York office.
If not, and they do nothing, Henry could become increasingly bored and erratic.
GRACE UNDER FIRE
What are the scale of the debts of the advertising media buyer The Media Counsel? The High Court in Auckland will hear an application on May 12 to have the advertising agency placed into liquidation.
The application was lodged on March 23. It followed industry coverage of financial problems at the firm owned by high-profile advertising industry veteran Glenda Wynyard.
Plaintiff for the application is Sky Network Television. On February 4, Wynyard wrote to HB Media's Stop Press website with a lengthy reply to critics.
She said: "Liquidation had been held up by some of the creditors who determined that they wished to appoint their own liquidator as they did not wish to support the liquidator that I suggested."
The sole director and shareholder said: "My failing is that I have never liked the financial side of business. I am a craft person, and this is a fact that anyone who came into contact with me knows as I am completely open about that."
Wynyard had paid hundreds of thousands of dollars in the last 14 months to a range of mentors, advisers, business managers, financiers and external accounting organisations "to advise and assist me because I understood my shortcoming in this area".
Wynyard's response to her critics drew a mixed reaction.
HB Media managing director Vincent Heeringa praised the former sponsor for the Stop Press website, saying she had shown "grace under fire, an attribute worth emulating".
The Media Counsel's financial status should be clearer after May 12.
LIMITED OFFER
Telecom says its discounted price for the advanced personal video recorder technology TiVo is a temporary promotion and not a permanent reduction to counter slow sales. Telecom has exclusive rights to TiVo in New Zealand and indicated sales have been slower than expected, but spokesman Nick Brown says that the current price of $718.20 - a $201.80 price cut - is a temporary promotion. TiVo is licensed in New Zealand and Australasia to Hybrid Television Services, 50 per cent owned by TVNZ and 50 per cent by the Australian Seven Network.
Techies and early adopters seem to agree TiVo bridges the gap in convergence between telecommunications and television. But even with offers to pay it off in instalments, the total price is a deterrent.
Half of the country that subscribes to Sky is off limits and have to use MySky technology. It is understood that Sky is expected to pass its target of more than 180,000 MySkys in homes by June 30.
FREE ADS
Advertising agencies body Caanz is championing a system for calculating the value of a media plug as clients look for more quantifiable proof on the return from public relations spending. There are established ways to calculate the impact of advertising spend on sales, but ad agencies have a harder time calculating the value of public relations-sourced coverage.
Claudia Macdonald - managing director of DDB's PR operation Mango Communications - said in a press release that editorial coverage has "more resonance" with consumers than paid advertising.
Which is just common sense really, since editorial coverage implies an independent mediator which is once removed from the direct cash relationship between advertiser and media company. But while big advertisers insist on evidence of its worth, public relations folk struggle to provide it.
Internationally one way of estimating the value has been to calculate Advertising Equivalence Value (AVE) of PR. Macdonald says it's between three and seven times the cost of a paid ad - but acknowledges the calculation is applied in different ways. Some PR companies even give a positive valuation for a negative story.
Macdonald values editorial coverage at between three and seven times the value for paid advertising. Which explains why marketing and PR companies put effort into cajoling editorial and pumping press releases. Some go straight into the wastepaper bin, or even generate a negative story.
Caanz and the New Zealand Marketing Association say consistency is required and are championing AVE.
"We want to agree a national standard for Caanz members," said Macdonald.
Prinz has declined to take part in research. Prinz executive director Paul Dryden said the relationship between PR and value was just too complex to calculate and that moving down the AVE path was counter-productive.
