Cayman radio faces competition

The highly competitive radio market in Grand Cayman is facing outside technology-based competition with the soaring popularity of satellite radio and iPod products, but local station owners say they are not overly concerned about losing listeners at this point.

‘Satellite radio is definitely something we are keeping our eyes and ears on,’ said Kirk Rampersad, sales and marketing manager for Style 96.5. ‘It can be seen as a competitor, but not a direct competitor.’

Rampersad said cost is one thing satellite radio has going against it.

After the initial expense of the radio, satellite subscribers have to pay between US$9.99 and $12.95 per month for the service. Subscribers must also have a credit card.

Satellite radio has been around for several years, but made unprecedented strides in sales last year, thanks in part to a Christmas season media blitz.

Controversial American radio personality Howard Stern also brought attention to the medium by saying he would take his show to satellite radio beginning in January, 2006.

Offering 70 or more radio stations on their networks, many of them commercial free and with near CD-quality sound, satellite radio is seen as the wave of the future.

Both XM Satellite Radio and Sirius Satellite Radio, the two players in the US market, saw subscriber rates soar last year. XM had a 140 per cent increase in subscribers in 2004, while Sirius had an incredible 383 per cent rise in subscribers for the year.

There are now more than 4 million subscribers to the two satellite radio companies, and both are looking to expand those numbers.

Automobile manufacturers are starting to offer satellite radios in cars, and analysts predict that 20 percent of all vehicles will have them by 2007.

Despite the rise in popularity, Kenny Rankin, owner of Vibe 98.9 and the island’s newest station, Spin 94.9, said he is not at all worried about satellite radio or iPods.

‘Listeners want to get local content,’ he said. ‘They still want to know what’s going on in the local scene. You can’t get that with satellite radio.’

The iPods products were popular Christmas gifts this year both here and abroad, with some foreign retailers saying sales of the latter actually saved the holiday season.

Apple Computers sold nearly 4.6 million iPod or iPod mini units in the quarter leading up to Christmas, attaining record growth figures as a result.

Last week Apple announced a new product, the iPod Shuffle, would be available on the market on 22 January at a starting cost of $99.

The iPod Shuffle is only two inches high and can hold between 120 and 240 downloaded recordings, depending on the model.

The iPod mini, which offers more memory and costs more, can store thousands of songs.

Randy Merren owner of Hurley’s Entertainment, which runs both Z-99 and Rooster 101, acknowledged the popularity of the iPod.

‘But people who have iPods still have to listen to the radio to find the music they will put on them,’ he said.

Merren said local content, such as news, and interactive content, such as call-in talk shows, would always be in demand, and are things that cannot be obtained through satellite radio or iPods.

In the end, Merren is worried about factors closer to home.

In a country that has about one commercial radio station for every 4,000 residents (compared to about one commercial radio station for every 30,000 residents in the United States), the economics are challenging.

‘I’m more concerned about the local competition,’ Merren said, noting that he hopes new state-of-the-art equipment that is ordered will give his stations a competitive edge.

Don Seymour, president of dms Broadcasting, which will soon launch three new stations, Hot FM, Kiss FM and X FM, agrees that advanced technology is now the best way to compete both locally and with indirect competitors such as the iPod and satellite radio.

Seymour said he recognizes the allure of satellite radio for Cayman listeners.

‘Satellite radio is a great thing,’ he said. ‘It currently offers a better quality of signal and more choice, and that’s what we’re coming to.’

If Cayman radio stations are going to stay competitive, Seymour thinks they have to offer better products.

‘We don’t have a wide selection of choices in the local market right now,’ he said.

Seymour also noted that some of the radio signals in Cayman are limited in quality, both in terms of strength and clarity.

‘To tell you the truth, I don’t blame people for turning to satellite radio right now with what we have to offer,’ he said.

Still, Seymour thinks there is room in Cayman for both satellite radio and local radio.

‘The two mediums can co-exist,’ he said, noting, as the others did, the importance of local content.

The three soon-to-be-launched dms Broadcasting stations, and the two more planned for the future, will offer exciting changes for Cayman consumers, Seymour said.

Rather than starting up with low-end equipment, Seymour said he is making a multi-million dollar investment to give him the highest quality transmission possible, and a competitive advantage as a result.

‘The stations that we are launching will be on par with any radio stations in major markets around the world,’ he said. ‘That’s what I think you have to do to compete.’

With stiff competition coming from both here and abroad, Seymour said he thinks some stations will not make it.

‘As with any competitive market, there will be winners and losers,’ he said. ‘But in the end, the true winners will be the consumers.’