Private radio stations and regional TV are in a better position thanks to fees
The economic situation of private radio stations and regional television stations in Switzerland has clearly improved since the Radio and Television Act was revised five years ago. For regional television, however, the situation remains difficult. This is shown by a new study.
On behalf of the industry associations (VSP, RRR, Télésuisse) and OFCOM, Publicom has examined the economic situation of licensed private radio stations and regional television stations in Switzerland. They presented the results on Monday: without public support, most regional television stations will not be able to survive in the foreseeable future. Many radios will also not be able to fulfill their performance mandate without fees.
Although private broadcasters operate in very different framework conditions, it is equally challenging for all of them to successfully assert themselves in a market dominated by public providers. According to the study, most broadcasters are doing much better than before with the revised Radio and Television Act (RTVA), which came into force in 2007. The increase in fee shares and the reorganization of licensing areas have contributed significantly to the improvement. However, the overall situation is significantly better for radios than for regional television.
Radios are in a better position than regional television stations
According to the study, the majority of private radio stations are now on a sound financial footing. The average equity ratio is 42%. At the end of 2010, only six broadcasters were underfunded, but the profitability of the majority is inadequate. The average corporate cash flow is only 8%. There are major differences: ten stations, including small fee-based radio stations, achieve a reasonable or even high level of profitability. More than four-fifths of income comes from the advertising market. In total, Swiss private radio stations generated over CHF 150 million in advertising revenue in 2010. If the sponsorship revenues of SRG radio stations and the advertising revenues of foreign stations are included, the Swiss radio advertising market reached over CHF 180 million.
According to the study, the economic situation of licensed regional television is less rosy. With advertising revenues of CHF 36 million, their importance in the advertising market is very low. They are correspondingly more dependent on fees, which accounted for two fifths of income in 2010. Nevertheless, half of the regional television stations were underfunded at the end of 2010, and the profitability of most stations is insufficient with an average cash flow of 4%. Only two stations achieved sufficient profitability.
Although there is still potential for licensed Swiss private broadcasters in the advertising market, development opportunities are limited, the study continues. This is mainly due to the strong position of the SRG, which has more than six times as much funding as all licensed private radio and television broadcasters.
