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UPDATE FEB 21: Kiwi FM's three frequencies should be put up for tender - and would be worth millions if they are, according to an industry expert.
Kiwi FM, by going to a 60/40 national/international split, was not fulfilling its objectives, Auckland University of Technology radio lecturer Matt Mollgaard told NBR.
The station was granted three frequencies free (102.2 in Auckland, 102.1 in Wellington and 102.5 in Canterbury) and currently receives $300,000 a year in NZ On Air funding. It styles itself as a non-profit, but is part of the commercial, private equity-owned MediaWorks group.
"Those frequencies, if they were put to tender, would be worth millions. The last in one in Auckland sold for around $6.5 million. That's for a 20-year lease. The other option is they can take them back and start working on another public radio network," Mr Mollgaard says.
Broadcasting Minister Craig Foss says he learnt about Kiwi FM's decision from a phone call yesterday.
"Really what they're doing they could have done June last year when their license to temporary 102 bloc was renewed," Mr Foss says.
Kiwi FM's leases expired in June and the Ministry of Communications was investigating what was to be done with the frequencies after they had expired, he says.
The station began its new format yesterday.
MediaWorks keeps $300,000 as Kiwi FM goes international
Feb 20: MediaWorks sees no problem keeping $300,000 in annual government funding for Kiwi FM – despite the local music-boosting station changing format to include international artists.
The previous government granted the station free FM frequencies in Auckland, Wellington and Christchurch, on the proviso that it would use the spectrum to promote local music.
Over the weekend, MediaWorks announced a format switch that will see Kiwi FM play 40% music from international artists “such as Radiohead, Lana Del Ray and Phoenix.”
The broadcaster sees no issue retaining its former level of Crown support.
“Kiwi FM has received $300,000 in funding from NZ On Air for a number of shows that play on the station this year,” spokeswoman Rachel Lorimer told NBR.
“These shows are unaffected by the change and will continue to play 100% NZ Music and remain in the schedule, so this funding isn't affected.”
However, Broadcasting Minister Craig Foss had no advance word of the change, and said he would look into the situation today.
MediaWorks group programme director Andrew Szusterman said Kiwi FM’s audience (around 20,000) was not sustainable.
The new ceiling of 60% local music was in accordance with Kiwi FM’s Ministry for Culture and Heritage licence, the broadcaster said.
MediaWorks – subject of an ownership fight between private equity interests – has recently run into political crossfire over an hour-long show for Prime Minister John Key in the run up to the election, and a $42.3 million extended by the government after the broadcaster could radio licence fees it could not afford to pay.
Kiwi FM's frequency deal with the government expires in June.