EDITORIAL

More Radio Stations Good For The Cayman Islands

Tuesday, June 15, 2004

Just over twelve years ago, when residents of the Cayman Islands turned on their radios, the dial offered very little from which to choose.

There was Radio Cayman on the AM and FM bandwidths, and the ICCI college radio station, which only some people on Grand Cayman could receive.

Then, starting in May 1992, Z99 debuted on the FM band, and four other radio stations have begun broadcasting in Cayman since then.

In the past few weeks, it has now been announced that another radio station has been granted a licence by the Information and Communication Technology Authority (ICTA) and that dms Broadcasting has applied for three more radio licences.

The radio frequency bands are getting crowded in the Cayman Islands, which is good news for listeners, but less positive for station owners.

With less than 50,000 residents, Grand Cayman offers a limited advertising market, and advertising is what allows radio stations to survive. Not only do radio stations have to fight for their slice of the advertising pie, they have to fight for listeners, which is the only thing that makes advertising worthwhile for clients in the first place.

With the advertising budgets and listener shares already split among many radio broadcasters, the addition of up to four new stations is going to make the competition extremely tough.

The situation is similar to what has and is occurring in the Cayman’s recently liberalised telecommunications market. Many companies were interested in getting into the lucrative industry, but when it was announced that the ICTA was going to issue licences to basically any applying company that qualified under its guidelines, many of the licence suitors dropped out, not wanting to risk the investment because of the amount of competition.

Although some smaller telecom licensees have found niche markets to service, the competition has been fierce among the three that are vying for a share of the mobile and international telephone market. The two newcomers have the harder row to hoe because they must derive their market share by taking away from the incumbent’s customers.

The same will hold true for the new radio licensees, and in some extents to a larger degree not only because of the higher number of stations, but also because they must fight for advertising with a myriad of print publications, websites and a television station.

Relative Cayman Islands radio newcomers are still struggling for market share, and the addition of more stations will only make things more difficult. Like the telecom industry, there will likely be casualties who do not make it.

Nevertheless, the granting of more radio licences shows that the ICTA is consistent in the way it regulates. If competition is good for telephone companies, it stands to reason that it should be good for radio stations as well.

The increased competition will force stations to tighten overhead budgets, become more innovative in advertising approaches and programming decisions, to hire more professional and talented staff, and probably bring advertising rates down.

In the end, competition will bring a higher calibre and wider variety of radio programming to the Cayman Islands, and it will be the residents of the country that will be the real winners, just as they are the real winner with the liberalisation of telecommunications.

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