Interview | Wednesday, 02 September 2009

Broadcasting not for the faint-hearted

Pierre Cassar, the recently-appointed Chief Executive Officer of the Broadcasting Authority is just 38 years old and he’s been in the hot seat of Maltese broadcasting for the past five months. He talks to Charlot Zahra about the main challenges facing broadcasting in Malta, the digital switchover and the state of play of the media market, among other things

You have been in the post for only a few months now. What are the main challenges facing Maltese broadcasting right now?
One of the major challenges Maltese broadcasting is currently facing is the transition to digital broadcasting. Government is committed to switch off analogue terrestrial television broadcasts by the end of next year.
The Broadcasting Authority (BA), together with the Malta Communications Authority (MCA), is conducting a very detailed exercise to ensure that this transition is made.
Essentially, under this transition, the consumer will still have the right to access up to six free-to-air local stations that are licensed by the BA.
Instead of the traditional antenna, there will be a digital set-top box and a smaller antenna to receive these six stations as from 1 January 2012.
This will lead to an enhanced service for the consumer, as it will include an electronic programme guide (EPG) and interactive services.
Another major challenge facing the industry is that Maltese broadcasting is so dynamic, with technological changes taking place every day, so the Authority has to constantly see what is happening out there, especially abroad, and how this will have an impact on local broadcasting. The impact of satellite broadcasting still has to be seen. The BA recently licensed the first satellite broadcaster in Malta: “Buzz TV”.
As a person who has worked in the industry for so long, I would like the Authority to work on improving the quality of Maltese broadcasting. There is an urgent need for a quality leap in Maltese broadcasting, especially in television.
And here the BA can make a difference by setting the necessary standards to ensure that there is a significant improvement in Maltese broadcasting.

Will the January 2010 deadline be kept or not?
I am hopeful that with the collective work of all those involved – there is a steering committee composed of various people from different Ministries and entities – we should not respect the 31 December 2010 deadline for the switch-off analogue television broadcasts.

Are you satisfied with the progress being made towards the digital switchover?
The steering committee has always met regularly with regular feedback being exchanged between the different parties.
There have been a number of other meetings outside the steering committee with different entities.
Moreover, the Broadcasting Act, which regulates broadcasting in Malta, has to be amended substantially in view of the digital switchover, and substantial work has been made in this respect.
In view of this, there have been various consultations, both internal and external, to see what kind of changes are needed in the Act to enact the digital switchover.

Which are those areas where you would like to see more progress in preparations for the analogue television switchover?
Now we have arrived at the micro-level rather than at the macro-level. The macro-level as to how the digital platform will be working has long been decided.
Now one has to see what kind of relationship there will be between the television stations and PBS, which will be the service provider for the free-to-air digital terrestrial television platform.

In 2004 you were part of a team that compiled a report for the BA to on the financial sustainability of radio and television stations which had recommended that there was no more space for new radio and television stations in Malta. Do you still concur with that view or not?
I had formed part of a team that had been commissioned by Grant Thornton to compile a report for the BA that also focused on quality in broadcasting, but had focused mostly on the financial aspect.
One had to keep in mind that a radio or a television station needs a lot of money in order to be successful in the market, and most of that income has to come from advertising.
At that time, the study clearly showed that there was clearly a saturation point, and that the majority of stations were finding it very difficult to register a profit.
Our argument was that it would have been much more difficult for existing players to achieve financial viability if other players entered the market. Today my opinion has not changed.
When someone comes to me with a proposal to open a new television station, my initial reaction is: “Have you made your homework well? Do you know what kind of investment this involves?”
If that person insists that he or she has made her homework properly, wants to invest, and believes in the product, then in a pluralistic society, nobody should be prohibited from broadcasting.
Since 2004, a number of new radio and television stations have opened, and some of them continue operating. That shows that if a person does his homework well, one can find a suitable niche in which to operate.
However, in view of the Malta’s small population, it is very difficult to find a niche which is financially sustainable.
In the past twenty years, we have seen a transition from a state monopoly of one television station and two radio stations, to 13 nationwide radio stations, six television stations and 28 permanent community radio stations, 3G telephony, and internet broadcasting.

In view of the current advertising pie available for the local media market, do you think that advertising alone would be enough for all broadcasting stations to survive?
The advertising pie is getting divided into a lot of media – besides the traditional print media, there is radio and television. Now there is also the emergence of internet-based media, and the proliferation of billboards.
And even the print media has seen areas of specialisation with advertisers preferring to advertise in glossy magazines distributed with the papers rather than in the papers themselves.
Although the adverting budget has increased slightly, the trend is now for an entrepreneur to strive to utilise his advertising budget in the best way possible.
And nowadays advertisers do not use a medium which is obvious, such as radio. Radio has remained an effective medium to advertise, however our latest BA survey showed that half of the Maltese population is not even listening to the radio.
Television still has remained a very strong medium for advertisers, especially in prime time, so it still attracts advertising.
However if you have very strong competition between the broadcasting stations by dropping their advertising rate to such an extent that they become ridiculous, then it is very difficult for any station to survive solely on advertising revenue.
Moreover you have two radio stations and two television stations that are managed by the political parties that also organise marathons to collect funds from time to time.
If a privately-run station had to organise a similar collecting exercise, it might not necessarily have the same success as political stations.
This means that the playing field for political stations is completely different from that of private stations that are run solely on commercial lines.

What is your relationship with the MCA, which also regulates broadcasting? Which are those areas where the two authorities collaborate well?
Our relationship with the MCA is excellent. There is a good working relationship between the two authorities since although we know we are separate entities, we have to collaborate together on certain aspects.
The BA supervises the content side, while the MCA supervises the technical aspect. For instance, if want to issue a licence to a community radio station, we ask the MCA to assign a frequency for that station.
The MCA then performs the testing required to see that there is no interference with existing stations, and then the frequency is licensed by the BA to that particular community radio station.
Then the monitoring to ensure that the station is complying with the Broadcasting Act is done by the BA.
In anything that is technical, such a frequency allocation and power outputs, we seek the technical expertise of the MCA.
There is an understanding between us that we need to collaborate, while respecting the autonomy of both authorities.
The BA has been traditionally been perceived as the ivory tower that slaps broadcasters when they flout the law.
The regulatory aspect should remain there. However, the Authority has to take more decisive steps to protect the consumer.
For instance, the Authority has issued new regulations to ensure that the advertising part in television programmes has to be clearly distinct from the informative part.
This is to ensure that viewers are not confused and that what should be informative is not in reality a hidden advert. We will not permit that.
The BA has also intervened in a few cases where broadcasting stations do not deliver on promised prizes. If the station does not comply, there is also a specific fine that the BA can slap on that particular station.
Moreover, with the proliferation of two new mobile networks besides the traditional two, the Authority and the MCA, have to ensure that all SMS messages sent during television and radio programmes to participate in competitions have the same opportunity to participate in that competition.

In transport, the Government is proposing a super-regulator incorporating the Malta Transport Authority and the Malta Maritime Authority. Do you think that the time has come for a merger between the Broadcasting Authority and the MCA?
I think the time is still not ripe for a merger between the Broadcasting Authority and the MCA. If you had to see the situation in other European countries, in most of the cases the regulators for broadcasting and for electronic communications are still separate.
Although the two Authorities collaborate, their essential operations are quite distinct. After all, the BA still regulates broadcasting content and issues rules to protect the consumer.
In view of this, I think there is still the need for these two entities to exist separately and not be merged into a super-regulator. When a super-regulator is created, it is then very difficult to control its deliverables.
Moreover, the BA has been set up by the Constitution of Malta and has been existing since 1961. In view of the political situation that persists in the country, the BA is engrained into everyday life.

In the past two years, two out of the four new televisions have already shut down. What is your advice to entrepreneurs who are interested in opening a new television station?
You mentioned two cases of stations which ceased their broadcasts. The Broadcasting Authority is not pleased when a station stops its broadcasts.
Before the Authority grants broadcasting licences, there is a tough selection process. One has to fill in a form in which the applicants are asked to provide details about the type of programming that will be carried, as well as provide financial projections and the number of employees that would be recruited. It is a detailed business plan.
However, if I have a good pen, I can promise you heaven on earth and I can convince you to issue the licence.
So we also ask prospective broadcasters to provide demo tapes to show the type of programmes the station will be broadcasting.
However when broadcasting starts, owners will have to face the reality of the expenses required, especially in television, with lights, cameras, make-up and so on, and entrepreneurs start cutting corners to control expenses.
This has led the BA to start issuing television licences for a probation period of one year so that the authority can gauge about the quality of the programmes being broadcast.
Moreover, the BA does not issue a television licence before an agreement with one of the two service providers is made, as analogue broadcasting is being phased out and the BA does not have any licences to assign to potential broadcasters.
Good research needs to be made in order to see which segment one may fit in.
Many stakeholders are now aware of the segmentation of the advertising market and try to find exactly where they fit in.

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02 September 2009


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