Absolute & Bauer

Most of its life Absolute/Virgin Radio seems to have been up for sale. Having spoken to friends who work there over the years, most of them say that you can’t be distracted by it, you just have to get on with things. So, I’m sure that’s what they’ll be trying to do over the coming months whilst the deal progresses. Unlike Global/GMG this one’s contingent on there being no regulatory problems, if there are, it would go back to the current owner, Times of India. However, I would be surprised if there were any problems.

Online there seems to be lots of second guessing about what Bauer will do. Most of this seems to be rooted in Fantasy Football-style discussions rather than looking pragmatically at the business. But, I guess, where’s the fun in that…

I think it’s probably best to think why they’ve done such a deal. For my money there are two reasons:

  1. Scale
  2. London


Bauer (and EMAP before them) have never been the commercial leader for national advertising, but its tended to be a close second. Global’s growing size and i’s intended acquisition of GMG causes it some major problems, as it makes them look quite puny when compare to the big G. It was therefore important to scale up as best it can and generate more impacts to sell. The problem is after GMG’s been consumed there isn’t that much to acquire.

Since the GMG announcements they’ve done quite a bit to try and scale up. First it added Kiss to the national DAB multiplex to up its distribution, second it added Planet Rock (and its nearly 6million hours) to the group and now it’s gobbled up Absolute and their 25m hours.

Bauer’s pre-acquisition Q4/2012 share was 10.7%. Now with PR + Absolute it’s on 13.4%.

Global’s share is currently 15.6% (and will be 16.3% if they add Smooth London+West Mids or 20.2% if they get all of GMG’s stations).

Bauer are still behind, but they’ve made up some of the distance – they’ve increased their scale – and actually for not that much money – £30m in total as a one-off seems a good deal.


The next main issue is London. London is fiercely competitive and commercially everyone is connected. Global’s Capital & Heart compete for audience and advertising with Bauer’s Kiss and Magic. Magic’s on-going success has been a particular pain for Global. I expect Global’s excitement about getting their hands on Smooth London is mainly about giving Magic some trouble than it is about improving 100.4 as a station. All they need to do is destabilise Magic and it will potentially let Capital and Heart get extra share of listening and advertising. This clearly would put Bauer on the back foot.

Whilst Absolute on 105.8 isn’t as close to Global’s properties as Magic and Smooth, it’s another battery to go at Capital/Heart’s male listeners (and even keep XFM in the Vauxhall Conference too).

Smooth London and Absolute London’s move from independent to group owned suddenly opens up a truly portfolio play from Bauer and Global more akin to US radio markets like New York and LA.

Rebranding Absolute

There seems to be an assumption from commentators that Bauer will flip Absolute into Planet Rock, like it’s done recently with Kerrang in the West Midlands. Whilst that, of course, may well be their plans, I don’t think it’s a done deal. Again, you need to look at why they did what they did in West Midlands.

As I understand it, Kerrang West Midlands (alongside the national digital simulcast) was doing fine for national revenue and agencies understood it, its problem was that it was difficult to sell locally, with too many negative connotations that weren’t really representative of what the station was doing on air. It was, in effect, a waste of an FM licence. Keeping it nationwide on digital would still retain the national money (less a bit for some audience drop off) and putting something else there would potentially increase national revenue for the ‘other’ brand as well as give the option to raise some local revenue with something less scary. Hence Planet Rock on FM in the West Mids.

The same thing doesn’t happen in London on Absolute, there isn’t the local revenue question as its FM audience is a core part of the brand.

Also, you have to question what would happen to the main Absolute Radio’s hours if you disappeared it, and divvied up its platforms for Bauer’s other brands. The main Absolute Radio’s 12m hours is nearly 10% of the newly enlarged Bauer – do you want to gamble with that share? I’m not so sure. You would have to spend A LOT of money on marketing to get Planet Rock (and other stations’) figures up to account for the 12m Absolute hours loss.

The other thing I would be careful about messing with is Absolute 80s. It’s half the size of the main Absolute Radio (at a fraction of the cost) and about as big as Planet Rock with 6m hours.

Of the others Absolute Radio 60s, 70s and 00s have limited distribution and less than 200k listeners each. I’m not sure about their futures.

Absolute Classic Rock also has limited distribution, but some heritage and 400k listeners/1.6m hours – it would be easy to say that the Classic Rock job is done by Planet Rock and therefore close it, but it’s still a sizable station. Not easy.

Absolute Radio 90s is interesting. Nationwide coverage on Digital One, 500k listeners and 2m hours make it a sizable station. However, the question, like Kerrang in West Mids, is there a better use of the digital capacity it sits on?

Would Bauer grow their scale (against Global) by putting something better on that national spectrum? Something like Magic 105.4?

A move like that would mean Bauer have a national portfolio of Kiss, Magic, Planet Rock, Absolute Radio and Absolute Radio 80s – to me that sounds like a great national line-up. It also makes things a little more difficult for their friends in Leicester Square. Capital and Heart remain a quasi-network, a status quo that the Competition Commission seem keen on keeping.

Other Benefits

The other benefits of acquiring Absolute Radio is to absorb some of their skills into the wider Bauer group. This is particularly hard for companies to manage, but Absolute lead the industry on a few things. One is branded-content, being a smaller operator they have had to come up with compelling ideas to grab budget away from Bauer and Global – can they bring this skill to their new owner?

The other benefit is the skills Absolute have acquired around Mobile and In-Stream. These would be a big addition for Bauer’s other stations and would give the group another great thing to take to the market.

What I hope Bauer do recognise is that they’ve acquired not only some good brands, but some tenacious, talented people. Global’s quick growth was a wake-up call to Bauer that they had to do something. It’s spurred them on to transform their business through these acquisitions, I hope that they use these talented to people to transform their business even further.



One thought on “Absolute & Bauer”

  1. Could Absolute take on the playlist of, say, Aire or Viking FM and go down The Best Variety of Hits for London route?

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