Royal Media Services has raided Nation Media Group and Standard for commercial talent as it seeks to raise revenues from its broadcasting streams. Royal Media Services (RMS), which runs Citizen and Inooro TV stations and more than a dozen radio stations, has poached three commercial managers from Standard Group and hired immediate former Nation Media Group advertising director Michael Ngugi.
Ngugi, who retired from NMG on 28th February this year has replaced Patrick Ndeda as commercial director at Royal Media. Ngugi’s exit from Nation came weeks after a controversial advert that was planted in the Daily Nation’s obituary purporting to announcement the death of Nairobi tycoon and NASA financier Jimi Wanjigi, fueling speculation that the advertising director could have been forced out on that account.
Two junior advertising employees who were suspended over the matter, whose investigation results remain under wraps, have since been recalled. It appears Ngugi retired after reaching a deal to move to RMS, owned by SK Macharia and his wife Purity Gathoni.
At the Standard, SK Macharia took three business development managers who have already reported to Royal Media Service, virtually disabling Standard’s commercial segment. The three are: Kigen Alusa, who has been appointed group business development manager in charge of agency sales as well as Steve Biko and Erastus Mwadime who will be allocated specific radio stations.
Insiders see the expansion of the commercial arm as a good sign since RMS owners are seeking to expand revenues rather than cut costs through restructuring. The lay-off that had been planned for next month is likely to be shelved to give time to management observe how the new team works.
It’s not clear why Ndeda, who was headhunted from Radio Africa Group, was sacked as commercial director, as sources at Communications Centre indicate that his performance has been good. According to numbers seen by Business Today, Ndeda had grown the group’s advertising revenue from an average of Ksh 200 million per month to Ksh300 million over the past few years.
Signs that Ndeda was headed for the exit became clearer when he was not invited on Tuesday for a meeting of sales people, who work under him. “He wasn’t invited for the meeting and that was very strange.” After the meeting, he was given his termination letter. “The problem with Royal Media is that the owners just wake one day and sack or hire someone.”
The new team led by Ngugi has an uphill task to increase revenues as SK is said to have set higher targets for them even as ads dwindle for mainstream media houses – due to a consolidation of public advertising and a slowdown caused by a prolonged electioneering period last year.
RMS is also running low on revenues after pumping Ksh 600 million into establishing Viusasa, the short-video-on-demand pay per view platform headed by former Steadman (now Ipsos Synovate) chief George Waititu.
Ngugi could be forced to increase advertising rates to grow revenues, but that will likely cause a backlash from advertisers who can easily migrate to rival stations like NTV and KTN. Worse, Citizen TV’s rating has fallen to 40.9% according to the 20017 survey by the Kenya Audience Research Foundation from a high of 50%. GeoPoll puts it even lower at 33.7%. This makes a rate card increase quite difficult. Its radio stations too have been facing competition from other entrants, thus reducing their audiences.