Radio stations feel the pinch of crisis

Radio stations feel the pinch of crisis

YOGYAKARTA (JP): Following in the footsteps of the print and
television media, private radio stations are now beginning to
feel the pinch of the monetary crisis with advertising revenue
declining by as much as 60 percent.

The Bikima radio station, which went onto the FM band in
October last year, has suffered a 40 percent drop in its
advertisement income since last month. Retjo Buntung's income has
dropped by 50 percent, while Unisi radio has suffered a 60
percent drop in its income.

Even Geronimo, Yogyakarta's most famous station according to
surveys conducted by local surveyor SRI and the Australian survey
company Frank Small, has suffered a 40 percent drop in its income
over the last two months.

The management of most of the radio stations agreed the drop
occurred because either advertisers canceled their bookings or
were late in their payment.

Radio commercials have been the main, in some cases the only,
source of income for private radio broadcasting stations. The
monetary crisis has forced many local companies to slash their
spending, and given the decline in public buying power, the first
budget to go was promotion.

Most private television stations have pondered cutting airtime
and implemented various austerity measures because of the decline
in advertisement revenue. RCTI, ANteve, SCTV and Indosiar have
all suffered a 20 percent fall in advertisement revenue.

The print media has been hit the hardest because in addition
to less advertisements, it also has to pay the exorbitant
newsprint price. Those affected range from Indonesia's largest
daily Kompas whose circulation is around 500,000 to Suara Timor
Timur in East Timor whose circulation is only 2,500.

Retjo Buntung, a radio station located on Jl. Jagalan, was hit
hard when 20 products canceled their bookings for commercial
airtime. Last December, the radio station aired commercials for
80 products.

"This is something that the station never experienced before,"
the station's chief of accounting and finance section, Wahyu
Sudarmawan, told The Jakarta Post recently.

A soft drink company recently canceled a major promo event it
had planned to hold in cooperation with Unisi radio.

Neither the Bikima nor the Geronimo have suffered from the
cancellation of commercials, but the decline in the number of
advertisers is evident.

"We can still tolerate the decline, which is about 10
percent," Geronimo director Suprapto Purwijayanto told the Post,
adding that what matters more is the late payment of commercials
already aired.

Suprapto, or Totok, said late payments accounted for more than
25 percent.

"We are surviving, but we need to do some badly needed
economizing," said Totok, who is also vice chairman of the
Yogyakarta branch of the association of private radio stations,
PRSSNI.

Among the austerity steps taken was rescheduling or even
scrapping expenses which required US dollars, such as the
purchase of compact discs and foreign magazines. The station also
cut the number of assignments for its reporters and activities
such as inviting guest artists and holding meetings in hotels.

"It's very important for us to take better care of equipment,
because the price of spare parts has soared four or five times,"
he said.

"At a time like this, the only thing we can do to survive is
'stand still' and reduce our activities," he said.

But local radio stations have decided not to cut salaries or
dismiss employers in the face of the economic crisis. Most
stations have agreed to give employees their Idul Fitri bonus
along with their full monthly salary this month.

"We prefer economizing elsewhere rather than cutting salaries
or firing employees," Bikima's director Sugiyati Sudjono said.
But he added they would not be recruiting this year.

According to Cuk Sahana of Unisi radio, it would not be
necessary for the company to either cut salaries or dismiss
employers given that production costs are far below income.

"But should the situation persist for the next three months,
we'll face a big problem," he said.

"Surviving is all we can do at the moment," said Wahyu
Sudarmawan of the Retjo Buntung Group. He added that should the
economic situation worsen, the company would cross subsidize the
stations under its management.

There are four broadcasting stations under the Retjo Buntung
Group's management: the FM Retjo Buntung and Rakosa, and the AM
Rasialima and MBS.

"If necessary, we could make a joint broadcasting program and
a single advertisement rate for the four stations. That would
make us more attractive to advertisers," Wahyu said.

With a population of five million people, Yogyakarta is home
to 16 private radio stations. Most of the stations employ an
average of 30 people, both full-time and part-time workers. The
largest station Geronimo employs about 70 people.

An upper-middle station with 30 employees here usually needs a
budget of Rp 90 million (US$9,000) to Rp 100 million for its
monthly operations and for workers' wages. (swa)