by Gill Moodie (@GrubstreetSA) Last week Smile 90.4 fm – Cape Town’s new FM radio station – started broadcasting.
Backed by SA’s pre-eminent film producer Anant Singh, Smile 90.4fm won the first FM licence to be awarded by the regulator, Icasa, for Cape Town in 14 years.
It was a successful applicant amid a group that also saw Richtrau – a consortium led by Given Mkhari’s MSG Afrika Investment Holdings – get the licence for Power 98.9 FM in Johannesburg. There was also the Durban-based One Gospel, for which the licence is held by KNI – a consortium led by Revered Abe Sibiya who also heads the One Gospel satellite TV station.
Power FM’s station manager, Ferdinand Mabalane, told Grubstreet last week that preparations were afoot for switch-on this year but he did not 
want to commit to a launch date while Sibiya did not respond to requests for information about One Gospel.
It does not appear that the station is on the air yet.
Last year Sibiya said that he was pushing to launch the radio station in June if all went well.
Smile 90.4fm – which held its official launch in Cape Town two weeks ago – will be unique in that it will be completely bilingual – going out in 50% Afrikaans and English and with a mix of music and talk. Half of the music will be local.
It has won a 10-year licence, which MD Tony Mallam told Grubstreet was quite surprising.
Mallam, who has worked for the SABC and was a shareholder in and financial director of Kfm – said: “My first licence with Kfm was for six years and when we got the paper work for this one, it was for 10 years. We checked with Icasa and they felt it was a mission to renew every six years.”
In its application, the station’s funding target was R36-million.
“We’re aiming to better that. We’re aiming to use less than that,” Mallam said. “The better we do advertising-wise, the less the shareholders will have to put in. It’s a three-year break-even. That’s our target financially.”
Mallam said that some competitors in the licence-application process were aiming for a one-year break-even target – a time frame he did not think was realistic.
“It’s a big financial investment, which is why we’re very glad to have the likes of (Singh’s) Videovision on board,” he said.
Singh, who joined the radio bid in 2009 before Smile successfully won the FM licence, is co-chairman of the board with Dr Ernest Messina, who is also chairman of the Groot Constantia Trust.
The Durban-based Singh is not new to the radio industry or the Cape Town business scene.
He is also the main driver behind Cape Town Film Studios while Videovision and Kagiso Trust Investments acquired the former SABC radio stations, Radio Oranje (OFM) and East Coast Radio, in 1996. This led to the formation of the JSE-listed Kagiso Media.
Singh was a board member of Eastcoast Radio, OFM and Kagiso Media until he resigned these directorships in 2006.
Smile’s investors comprise Videovision; Women’s Development Bank Investment Holdings; Allparts Cape; African Peoples Investment Company; and Radio 021.
Although the station has blue-chip investors such as Singh, it began as a small independent consortium founded in 2008 by Lizma van Zyl, who came up with the idea of a bilingual station in conversation with Ton Vosloo, the chairman of Naspers.
Vosloo – who Mallam described as a “moral supporter” of the station – was at Smile’s launch last week.
Van Zyl, who has worked in broadcasting – including the SABC, Kfm and e.tv – for more than 20 years is Smile’s content head while another veteran broadcaster, Clive Ridgway, is the station’s programme director.
Ridgway was Kfm’s head of programming for many years.
Many of Smile’s presenters – who include Bobby Brown, Benito Vergotine and Eloise Pretorius – came on board at less than they were earning before, Mallam said.
“We have been very conservative when it comes to finances. I’ve worked in venture capital and entrepreneurial businesses and the one thing about bootstrapping a company is that you have to be very lean and you have to grow into yourself. So even though it looks like we’ve got this huge talent, we’ve been very conservative about what we’re paying people. They are aware of the potential of the business and they’ve joined us with an upside in mind.”
Mallam said Smile would be spending a lot on marketing – with billboards, bus-shelter ads and print adverts in the works – to get it known among listeners as fast as possible but would also be using social networks.
“Again, it has to be clever use of money,” he said. “Shareholder funding is not a bottomless pit.”
Mallam forsees that the station will be competing against the big three Cape Town stations – Kfm, Heart and Good Hope – but also against successful community stations such as Voice of the Cape and Radio Tygerberg, both of which have gained Afrikaans listeners in the past two years.
“Overall, I think we will fragment the market,” he said. “There’s no doubt about it because… I think we’ll take a little bit from everyone.
“Our biggest challenge is to literally get people tuned in because when they do, they will love us and they will talk about it to their friends so there will be word of mouth and social media,” said Mallam. “The challenge is to draw the core of our audience in the first six months. It’s not about gradual growth. This is about making a big impact and then growing from there.
“Gone are the days when you launch quietly and grow steadily. People’s consumption of media these days is governed by a short focus of attention so you’ve got to grab them now. We’ve got to be a talking point in Cape Town. We want people saying: ‘Did you hear this on Smile 90.4? Did you hear what the guy said this morning on Smile 90.4?’ ”
– SA’s leading media commentator, Gill Moodie, offers intelligence on media – old and new. Reprinted from her site Grubstreet.
