How the world of commercial radio fights for an FM frequency

• Roemer Ockhuysen

  news editor

Tensions rise in the world of commercial radio. The highest administrative court will rule on Tuesday on an appeal over the future of commercial FM radio. At stake is which stations can still be heard on FM next year.

Last year, KINK radio station filed a lawsuit against the Ministry of Economic Affairs. KINK wants an FM frequency, a technique for broadcasting across the country. The problem: there’s only room for nine FM (frequency modulation) stations.

The current owners of an FM frequency are doing everything they can to keep it longer. A reconstruction.

Anyone who listens to the radio today can do so via the Internet, via a modern digital radio (DAB+) or via the old FM. The latter is still the most popular. Nearly half of listening traffic is via FM. “Especially in the car, people still listen a lot via FM radios,” says radio researcher Paul Rutten.

But FM radio has one big drawback. The technology offers space for just thirteen transmitters, which can be received throughout the Netherlands. Four of these are used by the public broadcaster. The government “leases” the other nine FM frequencies to commercial stations under temporary licenses.

Such a license is attractive to media companies. Commercial radio is big business: Advertisers spent more than 200 million euros on radio advertising in 2021, according to data from marketing organization Audify.

The more listeners a channel has, the higher its advertising revenue. “And since most listeners still connect via FM radio, that’s where you gain market share the easiest,” says Rutten.

It was a dilemma for the cabinet at the beginning of this century. Because who do you give the nine desired frequencies to? And how do you then ensure that other commercial parties ever get a chance with such frequency?

The solution has become an auction. In 2003, a frequency was awarded to the nine channels with the best economic and substantial offer. The permits would be valid for eight years. After that, a new auction could give other companies a good chance as well.

But that hadn’t happened since 2003. Eight years later, in 2011, the permits were extended for six years. Since two channels went bankrupt in 2009, the space was automatically made available for new applicants. An additional five-year extension was added in 2017. That year, the House of Representatives saw no reason in a new auction.

In exchange for the extended licences, commercial radio stations are now also broadcasting their programs via the new DAB+ system. The hope in The Hague was that listeners would first exchange their FM radio for modern radio. DAB+ can broadcast many more channels at the same time than FM’s thirteen. The idea was that when listeners switch to DAB+ en masse, the problem of scarce FM frequencies will resolve itself and the market will open up for everyone.

But while internet radio and DAB+ are slowly gaining popularity, in 2022 FM is still the most used way to listen to radio, against expectations.

In September 2022, after nineteen years, there was finally to be a new auction, but it was postponed again last year, until 2025. This time it was not DAB+, but the corona crisis that was the reason. “The market share fell enormously. As a result, advertisers no longer wanted to advertise with us,” recalls Talpa Radio Director Paul Römer.

Mole has four of the nine permits. “There have been massive blows that we need to bounce back from. And that just takes time.” The then state secretary Mona Keijzer gave that time.

This led to the frustration of KINK, an alternative music radio station. Now this station can only be listened to via the Internet and DAB+. “When we started in 2019, we thought we could participate in the auction in 2022. For KINK, this is vital for a higher market share,” explains director Jan Hoogesteijn.

KINK filed a lawsuit and won. The judge ruled last July that the auction must take place in September 2023. The ministry accepted that statement and is now working on organizing an auction. But the owners of the Talpa frequencies, BNR and Radiocorp (SLAM! and 100% NL) have filed an appeal.

KINK director Hoogesteijn: “In 2021 they had a top radio year in terms of turnover. This more than made up for the shortcomings.” According to the director of KINK, money problems are not the problem, but the threat of newcomers. “That’s why they do everything they can to stand their ground.”

According to Römer, KINK creates an image of David versus Goliath. “The balance of interests has been lost.” Researcher Rutten disagrees. After all, crown damage is also there for newcomers. “That does not mean that existing parties are disproportionately disadvantaged.”

If KINK also wins on appeal, it could cause a shift in the commercial radio landscape. Talpa currently holds four licenses (Radio 10, Radio 538, Veronica and Sky) and Radiocorp two (100% NL and SLAM!). DPG Media (Q-Music), FD Mediagroep (BNR) and Mediahuis (Sublime) are all licensed.

Anyone wishing to claim an FM frequency at auction would have to lose millions to tens of millions. In the current plans, the highest bidder by frequency wins. Mole will still lose a channel. The government recently adopted advice from the Dutch Consumers and Markets Authority to set a maximum of three to the number of frequencies a commercial party can own. The maximum should prevent one party from gaining too much power in the FM market.

Belgian DPG Media, which owns De Volkskrant and AD among others, owns an FM channel, Q-Music, but is also in favor of a quick auction. “So I think they want more,” Rutten says.

The question is whether KINK will gain frequency. The judge ruled in the first instance that the channel has enough power to participate seriously, but it remains to be seen whether they really want to bid against the big media companies.

The appeals court will rule on Tuesday.