Austrian Legislature Changes Law to “Save” Radio Station

Michael Hedges December 8, 2004

The administrative court revoked Graz radio station KroneHit’s license. The legislature stepped in and gave Austria its first national commercial radio station.Go To Follow Up & Comments

Four weeks after the Austrian administrative court (Verwaltungsgerichshofs –VwGH) revoked licenses of Graf station KroneHit and Salzburg station Welle 1 the constitution committee of the Austrian parliament amended the broadcast law (December 3), making the changes retroactive and licensing the country’s first national commercial radio station.

The licenses were revoked in November because the legal ownership of both stations changed after the licenses were issued without notifying the national regulator. Mediaprint, owner of KroneHit, two smaller radio stations, two major daily newspapers and a tabloid, transferred 11 of the 13 licensed frequencies to a new company called KroneHit Radio. German publisher Westdeutscher Allgemeine Zeitung (WAZ) owns 49% of Mediaprint. NRJ Groupe had entered into an agreement in April to buy 66.84% of KroneHit Radio, effectively buying out WAZ. It was widely reported at the time that NRJ Groupe planned to re-brand KroneHit in Graz as Energy to compliment its Vienna station, Energy 104.2.

But the court revoked the two station’s licenses, advertised for new applicants and forbade KroneHit, Welle 1 and NRJ Groupe, from re-applying.

After the parliamentary committee approved new broadcast law (Novelle des Privatradio-und Privatfernsehgestzes) KommAustria, the national regulator, followed suit and approved the application of KroneHit for a national radio license. The new law allows any private, commercial broadcaster covering more than 60% of the country to apply for a national license. The ownership disclosure requirements in the old regulations were waived. The full legislature will vote on the law before the end of December, but that is considered a formality.

“Now we have a private radio at the same level with the public broadcaster,“ said KroneHit Radio managing director Ernst Svoboda. Austrian commercial broadcasters have long complained about the lack pf parity with public broadcaster ORF. According to the most recent Radiotest radio audience survey, KroneHit reached 4.3% of Austrians, compared with 40% for ORF’s main channel Oe3. Private, commercial radio in Austria was first licensed in 1993, among the last European countries to open commercial competition to the public broadcaster.

Svoboda said he doesn’t expect to see an immediate effect in ad sales because of long-term commitments for nation-wide advertising to public broadcaster ORF. Svoboda became the company’s managing director in April and had negotiated the agreement with NRJ Groupe. Program director Christian Schalt said the station’s adult contemporary format would not change.

Ernst Svoboda
KroneHit Managing Director

Radio Unterhaernten and Radio City in Graf remain part of Mediaprint. Under the revised law, Kronehit Radio is not prevented from applying for a license in Graf.

Advertising in Austria is overwhelmingly placed in the print medium. Broadcast ad spending in 2003 was under one-quarter of the total. The 2003 ad share for radio was slightly lower than 2002 but indications from the first half of 2004 show an increase of about 10%. KommAustria has been examining the advertising sales practices of both ORF and the private broadcasters.

Losing Energy

All of this leaves NRJ Groupe out in the cold. The company went to the administrative court seeking relief from the ownership changes in KroneHit Radio that had not been disclosed. NRJ Groupe seems to have won the battle – the administrative court ruled in their favor – but lost the war. Austrian industry watchers suggest NRJ Groupe will lose interest in its Vienna station as ad revenue potential is small for local radio and there is little chance of another national license.

“Our commitment to Austria is in question,” said Energy 104.2 managing director Oliver Böhm. NRJ Groupe, he said, will challenge the “unconstitutionality” of the parliamentary committee’s decision. 

Earlier this year NRJ Groupe withdrew from its broadcast operations in Denmark and scaled down its hands-on position in Norway and Sweden. The company has, however, expanded in Germany, increasing its stake in Energy Nürnberg to 100% in November.

ftm Follow Up & Comments

New Vienna FM Frequency Advertised - July 19, 2005

Austrian media regulator KommAustria announced (July 19) a new private, commercial radio frequency (98.3 FM) covering the Vienna area, potentially reaching 1.7 million listeners. October 18th is the deadline for applications.

2004 radio advertising revenue in Austria was €170 million, an increase of about 10% over 2003.