Warsaw (Puls Biznesu) – More than half of radio broadcasting companies generate losses and their debts are bigger than assets. The local market is particularly weak.
According to the newest report of the Polish National Radio and TV Council KRRiT, for the year 2004, only 45 percent of radio stations had a net income. Their profitability, or the income against sales, amounted to 0.1-46.2 percent, and to about 10 percent in the majority of cases. At the end of 2004, 85 percent of companies had losses in the previous years.
“Radio stations in small and medium-sized towns have financial problems. They have higher costs because they must fulfill the requirements of KRRiT but at the same time they have smaller chances to earn from commercials”, Andrzej Mielimonka, the member of Multimedia board.
55 percent of broadcasters generated loss form their basic activities (16 percentage points fewer than a year earlier). In 69 percent of companies, the loss was higher than the assets and the shareholders had to make decision whether the company should continue to exist. Radio stations borrow money to survive.
“At the end of 2004, the majority of local radio stations had debts. Their owners were their creditors. They prefer to give their stations short-term credits to support their operations than to spend proper funds to increase their assets”, Barbara Adamska, an expert of the KRRiT said.
Local radio stations are in the worst situation.
“On the market of advertisements, RMW and Zetka compete strongly, so do ZPR and Agora. These stations offer bigger and bigger discounts, which adversely affects local stations. The latter, however, could fight by joining advertisement packets of big staions”, Tomasz Tecza from SPC House of Media media house commented.