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The Hashemite Kingdom has a population of only 5.1 million, yet its airways carry 30 radio stations. Virgin is the latest broadcaster to try and carve itself a niche. But why is the medium so appealing? And what does it take to succeed?

Since their liberalization in 2004, Jordanian airwaves have been vibrating with new programs. Later this month, Virgin Radio Jordan will be the latest addition to an already overcrowded landscape. Radio may attract increasingly large chunks of advertising budgets, but those watching the industry say it needs a bit of straightening up if it is to keep growing sound and sane.
A nascent market such as Jordan’s is bound to generate a lot of attention, and an increasing number of regional and international companies have been opening offices and branches there.
In a country where radio stations are the only form of media not submitted to strict state-control or tight regulations, investors are easily attracted. “Radio stations are easier to launch than other media,” says Mohammed Jarrar, senior media manager at Ipsos Jordan. “Unlike the press, for example, they don’t require a major initial investment and sustained effort to work; music content is available, and so on.” Indeed, in the five years since Jordan’s government opened up the country’s airwaves to private broadcasters, radio stations have mushroomed throughout the Hashemite Kingdom. Some harbor mere local or prestige-related ambitions, and others – such as Virgin Radio, set to start its testing period on March 16 – are international brands pursuing expansion plans.

EACH TO ITS OWN. But when does more become too much? With most broadcasters established over the last five years, a total of around 30 radio stations might seem a little excessive for a country with a population of 5.1 million people.
Yet impressive growth rates in ad revenues may belie this theory. According to studies carried out by Ipsos, total ad revenue in Jordan surged by 10 percent last year, from $275 million in 2007 to $303 million in 2008, and revenues generated on radio stations enjoyed a disproportionate 25 percent growth, from $20 million to $25 million. This could be because the owners of radio stations not only want to be more dynamic, but also are allowed to be so. “There’s laziness and tough regulations in other media, so advertisers have to find other channels,” says Jarrar.
“Budgets that would go to television elsewhere go to radio in Jordan,” says Paul Hanna, managing director of Specom Jordan, a branch of Lebanese media sales company Specom that expanded to the kingdom in 2006.
But, as usual, monitored spend doesn’t tell the whole truth. “We must keep in mind that these rate cards figures are not the reality of the market,” says Jarrar. “The average discount rate is more than 70 percent and some radio stations go further. To get clients, it’s a dog fight; in that regard, [Jordanian radio station owners] are the nastiest in the region.”
Specom Jordan is the kingdom’s only media representation company, in the sense that it doesn’t own any of the media it sells (it sells for Sawt el Ghad, Jordan’s leading station in terms of sales in 2008, is its main client and it is in negotiations with Virgin), whereas the vast majority of radio stations handle their sales in house, without any professional advice from a third party.
This lack of consultation leads to some unrealistic pricing. “Prices aren’t usually set according to any rational criteria, and they are too high for such a limited market,” says Hanna. “At first, all stations were obliged to align their rate cards to that of the first station to launch, Radio Fann. Today, Sawt el Ghad has the lowest prices in the market, but generally the price-to-quality ratio remains inadequate.”
No wonder, then, that only around 15 of the 30-odd existing Jordanian stations are really competitive, say industry watchers. “Among these 15, the five leading stations share around 70 percent of the total ad spend,” says John Saad, managing director of the soon-to-air Virgin Radio Jordan. “Basically, sales rely on acquaintances and networking. Jordanians are aggressive in business, by definition, and everything is allowed.”
Except for a happy few, most Jordanian radio stations are increasingly losing money, despite a general boost in ad revenues.

MIXED SIGNALS. Whether it’s down to the industry’s immaturity – after all, it is only five years old – or an extremely competitive environment, Jordan’s radio broadcasters are in for tough times, as in these times of economic strife, a cull of non-productive stations seems unavoidable.
According to data provided by Ipsos, only 35 percent of Jordanians aged 15 and older listen to radio on a daily basis, and they only do so for an average 46 minutes per day. (By contrast, an average listener in the United States will tune in for two and a half hours a day.) Stations also suffer from a lack of differentiation, with 85 percent of them broadcasting Arabic music. “Investors tend to do their business research after having started their business,” says Jarrar. “They don’t seem to realize that there’s no loyalty to a specific station; listeners are loyal to a specific kind of music.”
There are simply too many radio stations in Jordan, well above the market’s capacity. Still, more licenses are being granted, including four last December. “The industry needs regulation,” says Jarrar. “The Audio-Visual Commission is supposed to regulate the scene but, for now, they are only granting licenses, which are very easy and very cheap to get. Therefore, the commission should shoulder a large part of the blame.”
Hanna agrees that the industry is yearning for more regulation and for the end of excessive licensing, but he’s also confident that the airwaves should begin to smooth soon. “Companies and ad agencies that previously didn’t have branches in Jordan now do,” he says. “Professionalism and organization are getting better. Clients that used to hire one individual for sales and marketing are now recruiting for a specific marketing department. They’re learning and becoming more knowledgeable.”

VIRGIN NEWCOMER. However, in this overcrowded context, the launch of yet another radio station may seem adventurous, if not foolish. Whether Virgin Radio – which is currently negotiating representation with Specom – manages to find its place in the Jordanian sun remains to be seen.
“Jordanian clients don’t really care about the brand,” says Hanna. “What interests them is the result on the Jordanian market. But back-up from abroad, be it from Beirut for Sawt el Ghad or from elsewhere for Rotana or Virgin, can definitely help a station penetrate the market more easily.”
Well aware of the difficulties ahead, Virgin’s Saad is carefully defining a strategy as he conducts surveys and market studies. The station’s choice of language will be crucial, as Jordan already boasts nine English-language radio stations, which attract only 2 percent of the country’s listeners between them. “We won’t necessarily stick to English,” he says. “Virgin Radio in Turkey broadcasts both in English and in Turkish. In Jordan, roughly 80 percent of ad spend goes to Arabic stations so we know that if we want to generate some money, we also have to go for Arabic. The question is: In what proportion?”
Saad hopes that on top of its advertising revenue, Virgin will reap income by setting up strategic alliances with event organizers. “Our brand name should give us access to many artists,” he says. “We will differentiate ourselves through on-location events, concert sponsorship and various other channels.” For example, the station’s studios will be housed on the ground floor of Amman’s City Mall, where people will be able to see the presenters and DJs. “We want to define concepts and build a trademark,” says Saad. “It’s all a matter of how you present yourself.”

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