It has been almost a year since a private company took control of the financially ailing public radio service in the Cook Islands.

Privatization may have been an attractive option for a government wishing to cut its payroll, but it has not improved the radio station’s fortunes. 

Two of the four owners of the Cook Islands Broadcasting Service (CIBS) withdrew from the business in March. The company is in debt and losing money. It is also being sued by an equipment supplier in Tahiti following the collapse of a US $55,000 purchase in which shares were to be transferred as partial payment. 

Following privatization, radio programs were cancelled and staff members lost their jobs or took deep wage cuts. An owner described relations with advertisers as “not so good – we didn’t have their support.”

The Cooks are a group of 15 volcanic and coral islands – 13 of them inhabited – in the Polynesian region of the South Pacific. About half the population of 18,000 live on Rarotonga, the largest island. Although the Cook Islands are freely associated with New Zealand, their nearest large neighbor is Tahiti, 1260 kilometers northeast of Rarotonga.

The public broadcasting system includes an AM radio station operating 18 hours a day, and a television station which broadcasts in the evenings and can be received only on Rarotonga. 

To understand how public broadcasting ended up in disarray, one must realize that the Cook Islands are almost bankrupt. 

Some experts say the national debt of US $68 million is twenty times larger than the country can support. The government raided the coffers of several departments, including broadcasting, just to pay wages. It owes US $4.5 million to its employees’ pension plan, having made no contributions since 1994. 

By the middle of last year, there were 3100 public servants in the Cooks, or one for every six inhabitants, the result of what the Cook Islands Press denounced as “jobs for votes.” 

Under pressure from the Chamber of Commerce and international financial institutions, the government agreed to eliminate 1800 jobs. Sixty public service positions disappeared in the privatization of radio and television.

Privatization deal 

Even with the economy on the verge of collapse, five groups, including two from overseas, made bids to run public broadcasting as a business.The government offered terms that seemed attractive: Although the state would retain ownership of assets, the successful bidder would use them at no charge. The government would absorb debts of US $200,000 owed by the broadcasting service. The private operator would be given a two-year contract, with the possibility of renewal, and not be subject to government control. 

Last June, the government selected a company owned by four people, three of whom were already working for the public broadcasting system. Emile Kairua was general manager, Mere Raita was administration manager and Teararoa Mani was a board member and former radio announcer. 

They began running broadcasting as private entrepreneurs in September.

In March 1997, however, both Kairua and Raita resigned from the new company. Raita said they would turn over their shares to Mani and the other owner, George Pitt, once “certain conditions” were met. These conditions relate to responsibility for the company’s debt, and liability in the impending lawsuit. 

Financial difficulties

Raita, who worked at the public broadcaster for twenty years, was reluctant to speak about her reasons for leaving CIBS. She conceded that, during her six months with the company, it continually lost money despite efforts to improve the financial situation. Immediately following privatization, the Pacific Islands Broadcasting Association (PIBA) paid for Australian radio consultant Lois Baird to assist with marketing and sales. 

“CIBS was trying to overcome a lot of audience negativity,” Baird reported. “We tried to get away from the old image and decide on a new one with improved programming, better production values and a more interesting sound.” 

One of the first changes was a new name, “Radio Aktiv,” replacing what Baird referred to as the old “Voice of the Nation” image.

It was decided to increase advertising charges by 300 per cent, and Baird trained the staff in sales techniques. 

The CIBS took radical steps to cut costs too. “Salaries were very high,” commented Raita. “We probably cut them by half.”

The company also reduced staff. At one time, sixteen people worked on radio. Now there are seven and only one is full-time. “Most of the older staff were left out because we couldn’t afford to pay their high salaries,” said Raita. 

Programming was hit hard by “restructuring.” The most popular program on Cook Islands radio, a daily phone-in show called “Talkline,” was cancelled after the host refused to seek his own sponsorships rather than work for a salary. 

Raita said CIBS could not find anybody else willing to host the program on such terms. Transcription services from the Australian Broadcasting Corporation and the BBC now take the place of some local programs. 

Most alarming has been the decline in local news coverage. It particularly affects those living on distant islands where the two Rarotonga-based newspapers are not easily obtained. 

The CIBS attempted to eliminate staff journalists and rely on freelancers. “We thought it was a good idea,” said Raita. “We got about 4 freelancers but, you know what it’s like, they only worked when they wanted to.” 

Following a month in which there was no local news on radio or television, CIBS changed its policy and hired two television journalists on a permanent basis at the end of January. 

Radio, which has not had its own news department since television was introduced in 1989, will continue to broadcast the audio of the evening TV news bulletin, and announcers will rewrite some stories for use at other times. 

Raita believes there are two ways in which the national radio service could be salvaged. 

The company could expand into pay television, earning enough revenue to maintain free-to-air TV and the national radio service. She said, however, that setting up pay television would require “a lot of money.”

In fact, the current lawsuit relates to the purchase of pay television antennas and decoders, some of which have already been installed. A

nother option would be to separate radio from television. “Radio doesn’t need a lot of money,” said Raita. “The major cost is electricity, so maybe it can stand by itself.” 

Indeed, the government received one local bid to run a radio-only service, but declined it, preferring to keep the services together. 

Successful commercial radio in the Cook Islands is not just a dream. David Schmidt has proved that. 

Schmidt is managing director of KC-FM on Rarotonga, a station which broadcasts 18 hours a day and employs eight people. 

On the air since 1979, the privately-owned KC-FM does something quite remarkable: it survives on advertising revenue alone, in an economy that is “on the verge of collapse.”

* First published 17 September 1997 in the International Edition of Radio World