Star Media Radio Group shuts down two radio stations

SMRG, the radio division of the Star Media Group currently owns four stations: 988 FM (for the Chinese market segment), Suria FM (Malay), Red FM and Capital FM (English).

The news was first reported by Hype Malaysia, citing industry sources that confirmed operations would be winding down.

The report also highlighted that the “writing was on the wall” given the series of not-too-subtle posts on social media by Capital FM talent about leaving, stemming from two months ago, while the inclusion of Red FM in the mix came as “a surprise.”

“Our source told us that they’ll still be on air until Star Media Radio Group decides what to do with them,” the report added.

Industry sources have told Campaign Asia-Pacific that the radio group is currently undergoing a restructuring exercise. Others have shared that radio talents attached to Capital FM have been given a three-month severance package, less if their contracts expire earlier.

In October, SMRG's chief operating officer Kudsia Kahar stepped down from her role with the company.

When contacted for further clarification on the matter, the company issued the following statement with regards to Red FM:

In view of current challenges, like most other companies, Star Media Radio Group is reviewing and consolidating all its assets to continuously improve and better serve our most important stakeholder - our consumers.

Thank you.

Asked about the fate of Capital FM specifically, the company shared the following statement:

The company has made a decision to restructure Capital FM to serve our clients better.

It is unknown at this point if the company intends to carry on with these two radio properties under revamped identities or divest its radio licenses/assets. At time of writing, the company has not yet submitted any filings with Bursa Malaysia, the country’s stock exchange, announcing its intentions.

Capital FM was re-launched in November 2011, after being acquired by Star Radio Group. Positioned as the country’s first and only female-targeted station, it was aimed at urban women in the Klang Valley aged between 25 and 35 and sought to be a platform for women's issues.

According to a Gfk survey, the station commands a weekly listenership of 80,000 in Klang Valley and Penang.

SMRG acquired Red FM, an English-language station targeted at urban and suburban listeners, in 2003. In 2013, the station underwent a rebranding exercise, which involved a new logo, tagline, Living it! and website along with a new team of announcers.

According to a 2015 listenership survey done by Gfk, Red FM commands a weekly listenership of 325,000, expanding its weekly listenership base by 70 percent.

In a late November interview with StarBiz, the radio group’s general manager for marketing Faisal Khalil said in view of advertisers taking a “prudent stance” amid current economic condition, the company was positioning itself as a cost effective channel to reach consumers and optimise spend.

“Radio, as the media with the highest reach of more than 90 percent of the Malaysian population, should always be part of advertisers’ thought consideration in building brand awareness and maintaining top of mind recall,” he told StarBiz. “In order to stretch your ringgit even further, that’s where we come in – delivering high quality listeners while reducing wastage.”

Asked for comment on the development, chief executive of GroupM Malaysia, Girish Menon said the shutdown of both stations would be “a pity, but hopefully not something that will happen”.

“We do need a diverse and dynamic media marketplace where advertisers have a variety of choice,” he added.

Menon also noted that Malaysia is a market where radio enjoys very high levels of reach, and holds the potential to be a lead medium for certain brands and ad campaigns.

“So it would be surprising if we didn’t have room for different networks to coexist and segment the market,” he added.

According to the PwC Global Entertainment and Media Outlook: 2015-2019 report, radio accounted for 5 percent of total ad spend in the country in 2014, with newspapers garnering 59 percent and television, 19 percent. Total ad spend in the country is estimated to be approximately US$1.6 billion.

The latest Nielsen RAM survey showed that showed that close to eight in 10 radio listeners live in urban areas (79 percent) and more than six in 10 are under the age of 40 years (62 percent).

The survey also revealed that 39 percent of respondents are the decision-maker for purchase of grocery items in their household and 51 percent of radio listeners would listen to their favourite radio station during their daily commute.

Benjamin Ting, executive director of media industry group for Nielsen Malaysia said that radio continues to be a popular medium in the country, with Malaysians spending over two hours a day listening to their favourite station.

“Malaysians are generally still captivated by radio due to its personalized format and content. It continues to be a popular medium as indicated by the high reach,” he added. “Besides, radio exposure has also proven to create a positive affinity for bottom-line sales.”