Anti-Social Networking

So the news finally broke that GCap is going to network something, somewhere in daytime across their One Network of radio stations. Which, I imagine, isn’t particularly good news if you’re a daytime jock.

Indeed I hear the information flow wasn’t exactly as smooth as at Global, where their ‘under threat’ DJs all got a personal briefing/help finding a new job before it was announced publicly.

Now I actually don’t have anything, per se, against networking (you can take the boy out of GWR, but… etc etc), but the recent spate of daytime networking changes creates an interesting quandary, specifically around sales and making money.

You see, if you’re a Finance Director you have a little spreadsheet which shows your costs in lots of different categories and then you have another spreadsheet that lists all your income. The problem lies in the inter-relationship between these two spreadsheets and the fact it’s hard to show the real-world connections between the two.

Taking a top-down approach you add up the cost savings of networking a show and you’ll probably come up with a saving at the One Network of £800k to £1m a year. That’s a big number. Then, when you ask the question “Will it materially reduce audience by networking it?” I think it’s hard to say that it will.

What hasn’t been picked up is that it won’t be all the One Network stations taking this networked show, well at least from day one. I imagine the ‘big 8’ are unlikely to initially take part. Why’s that? Well, according to recent financial statements GCap say they account for around 50% of the hours and money made by the network. Therefore should the worst happen and they see a five percent reduction in the hours of those stations there could be quite a material affect on the business, whereas 5% off of Lantern probably won’t make such a difference to GCap’s bottom line. Indeed you can look at the cost saving and work our how much audience you would be ‘happy’ to lose before you start making less money.

However, assuming that an hours reduction is the only threat to enhanced profitability would be a naive thing to do. To me, the most interesting thing about the networked show is what else you lose locally.  With my business hat on, to me the biggest potential threat is the loss of local S&P or indeed any money that having a local programme specifically generates. The simple calculation to make is whether statement 2 would outweigh 1.

1.  Money generated locally for show – cost of making local show = show profitability

2.  (Money generated because of national show – cost of network show) / number of stations taking the show = station’s allocated profit.

There’s lots of talk about network shows being able to bring in national sponsorship opportunities, which is undoubtedly true. However, will the total revenue from this new national opportunity outweigh what was previously able to be generated locally? If it doesn’t the  £1m saving will start to shrink. Very quickly.

To underestimate local sales is very dangerous, especially as spot for spot, local can generate more than three times the national equivalent. Already many sales teams across the UK have suffered when their sales houses in construction including the roofing services oversell airtime (or have to provide more spots because available impacts have gone down since the ads were sold). This result is less inventory available for local sales teams and often that’s when you hear everything on the station suddenly has a local sponsor. Those local sales teams need to hit their targets after all.

The other type of sales that a station loses is the ability for local jocks to sell what’s coming up on the station (as well as ther station’s other S&P activity). Now, whilst some of this can be replaced by a DCS command and a split break, there is not the same emotional sell that a jock can do. Being excited about the breakfast show or other activity on the station helps drive hours and keep the stations performing well. In commercial radio the presenter’s role does not stop at segueing a song well or delivering a funny ‘bit’, they’re there to re-enforce all aspects of the individual radio station to drive hours and, ultimately, profit.

The easy post to write about networking is how it’s all ‘hell in a hand cart’ and the end of civilisation as we know it. Well, to be honest, I can’t guess how the One Network’s audience is likely to react. I imagine some stations will be up and some will be down and it’s going to take a good 18 months to see what the real result of this policy change is.

What is a shame is that 100+ presenters, suddenly having found out about their future on DigitalSpy and RadioToday are going to be concentrating on getting a demo together and finding a ‘safe’ shift rather than delivering compelling audio and serving their current audiences.

6 thoughts on “Anti-Social Networking”

  1. The whole move is short sighted. Local S&P will be affected as you state in your blog. The talent pool will then eventually dry up. PCs moan they find it tough to find people already. This will get worse.

    Look at the big national performers. Evans, Moyles and Mills. They all started on overnight shifts on local commercial stations. Those shifts are long gone.

    In the next few months new talent won’t even be able to try-out on weekends. The opportunities to bring new talent into the business will be few and far between.

    The whole thing is short sighted and fails to address the main issue commercial radio has – falling REVENUE. Turn that around rather than this death by 1000 cuts approach!

  2. I think your comments on presenters selling *the station* are spot on. When Digital Spy talk about radio losing its locality, I think this is largely what they mean. Local radio in the “good old days” was often not really *about* the local area as such, as much as it was about *itself*. Done badly, this becomes the parody of the local radio DJ doing incestuous in-jokes about the station coffee machine. But done well, as you say, it allows every part of the station to reinforce every other part. It’s not so much about defending local radio, it’s about defending what the Americans call *stationality*. This is why the logic for me is overwhelming to rebrand all these stations as Heart. Once you are only doing ten hours a day, you have become a national network with local opt outs, rather than a local network with some national networking. The brand has to reflect that or the *stationality* becomes confused.

    At a tangent, for me, it would seem obvious that what you lose from not being local, you try and gain back by being *a better show*. That would require, in my opinion, a name presenter, big guests, and a sense of *daily event* – a kind of younger, cooler Steve Wright if you like. The fact that this new show is being launched on the smaller stations first suggests that it’s not going to be that at all, but just a generic daytime music sequence hosted by some reliable GCap nobody.

  3. This is a bad idea. Local shows can get listener loyalty, a networked show in daytime hours wouldn’t get that.

    Look at the loyalty on certain daytime shows – Bauer’s Big City Network daytime local shows are living proof of this – and GCap will be kicking themselves for not realizing this.

    I really think Matt Lissack should do this show, if only because he’s an underused GCap network presenter, and he’s good at his job.

  4. I think anybody that is “pro-network” should think about the following.

    Why did that LOCAL FM get it’s “local” licence in the first place?
    Because Radio Authority decided that there was enough demand in that particular area to justify it getting its own “local” radio station.
    In many cases, a few RSL’s in the area would have been run, encouraging listeners to write into Radio Authority to say “We want our own local station”
    The TSA then gets its own radio station. Great. Its what the good people of that town asked for.

    Then later on, when the network kicks in, this misleads the listener who helped make the station, thinking it is their local station when it has turned into a semi-national.

    With TOO MANY RADIO STATIONS, localness is a key differentiator..

    With the consolidation of groups in radio, with the OFCOM relaxation of the rules re daytime and weekend network, all groups will follow with complete disregard for the reason of their existence. This now means most TLRC stations will have 4 hours of local programming on Saturdays and Sundays. If I tune in after 2 on my local station, I wont get local traffic, local sports results. If a major incident happens, I’ll have to tune in from Monday morning to find out why.

    And will the on air network jock mention he is not actually located in the “local” studios? Will he mention he is on 20, 30, 50 other radio stations at the same time? No! Totally misleading the listener as to why they are tuning into their local station. They might as well tune in to Radio 2. It is just as local. I agree with the comments here it is a national station with a local opt out.

    And taking on board that the quality of a network jock is better than a local one, this is not the issue, the issue is that Ofcom say FM stations can ave local programming now – only 10 hours per day weekdays, and 4 hours per day weekends. If they were the best local presenter in the world, they would still lose their job. There are only limited network shows available for the jocks that will be losing their jobs.

    Back in the old days the “new boy” would be given some swing overnight shifts or evening shifts to learn the trade. With so much networking, it is sad to say that the new boy often does his first shift on drivetime. Any potential “new boys” reading this, give up and do something more fruitful.

    Within groups there are stations with good RAJAR results, good sales results that could easily sustain live local presenters financially, but with the relaxation of the localness format, they can now reduce their costs to help pay for their non performing sister stations in the group. If it aint broke, don’t fix it.

    The reason this has come about is part of the Ofcom – Future Of Radio exercise. Radio is suffering commerically so Ofcom need to relax the rules so that stations survive. Only around 50% of commerical radio stations make profit.

    So what Ofcom are providing is protectionism.

    If I start my own business and the market reduces, or my performance struggles, the business folds. This is what needs to happen in radio. There are TOO MANY RADIO STATIONS in the UK doing the same thing. This mess is the fault of Ofcom in the first place. This now means that local radio stations can run their station on two presenters. Is that ethically acceptable to the stakeholders of the station? Ofcom seem to think that listeners are ignorant.

    More stations = more competition. This is one of the reasons why radios are not performing financially.

    More stations does not mean more listening choice.

    When several stations cover the same TSA, the smaller local “sally” station has to be local to differentiate and survive. Networking will not allow this. I predict daytime and weekend network will take a hit on the hours, which will domino then onto the advertising revenue – a downwards spiral.

    With more consolidation soon the radio industry will be owned by two or three groups – This is called an oligopoly. I’m suprised that the MMC allowed the Global acquisition of GCAP. To be honest, we don’t need a regulatory body anymore with such giants.

    If the radio industry can not sustain live local programming, particularly in peak hours during the day, then OFCOM should not have given the licences out in the first place. I think theys should stop awarding new licences.

    In some parts of the country overpopulated by TLRC or GCAP regions, this now gives no localness and no choice to the listener. If they start to search on their radio, they get the same Clone FM. I don’t know why they don’t change the name of the stations to the same and be done with it. GCAP Radio, TLRC Radio. Why pretend it is Minster FM? It’s not. It’s one thing to be playing the same songs and have a similar station sound with production. It’s something else having the same presenter not saying anything about the locality.

    TLRC = The LOCAL Radio Company! Pah!

    I’m also sick and tired of being told to text in now to win a car but texts cost £1.50. The quality of the programming says to me that even the local stuff is network / group initiatives. With stunts like this (taxing the stupid), the quality of programming network or local is poor anyhow. Liner card local radio.

    And lets get this clear, I am not someone who has lost his job due to networking. There are no sour grapes on my side. The passion in my email is to highlight that this is misleading, maybe we should get the Trading Standards in. It’s my local station and it’s not local anymore. It’s a total farce. If a local station can not survive being local, it should close down, and Ofcom are to blame for this.

  5. Local radio is like cars LOCAL to a specific market. Honda offers the Accord worldwide, but not all countries get the diesel or estate versions.

    This “networking is the future” is bilge. Partial networking is fine, but Ofcom have taken it WAY too far with the 10 hour rule.

    Rant over.

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