2014 is set to be another busy year for radio. Whilst Global Radio’s acquisition of GMG and Bauer’s need to respond have been a big driver, the key catalyst is the change in consumer behaviour and the opportunities it will provide.
The real engagement in digital by Global and Bauer is led by opportunity. Consumer media consumption is resulting in the biggest change in listening habits for decades. Listeners have historically been given little radio choice, but the digital platforms have broken that monopoly. Listeners are seeking out what best suits them, rather than tolerating the least worst option.
This puts many listeners ‘in play’ for the first time in a while. With stations like Absolute 80s, Planet Rock, 6Music and 1Xtra grabbing a million listeners or more – developing and deploying a strong selection of stations has suddenly become a very obvious thing to do.
That’s not to say that the analogue stations are going anywhere in particular. Whilst their average hours are sure to face an inexorable decline, their reach and awareness is strong and FM is still a great platform to be on – loads of devices have it and there’s a restricted supply of new entrants. We should squeeze the benefit out of it whilst it’s still relevant and well-used.
However, with local hours under fire and local regulatory commitments to service, their long-term profitability is very much in question. Global’s resilient profits have been driven through significant cost-cutting and a strong brand roll-out. The addition of some more stations to the network will mean a repeat of their now well-practiced exercise.
It will be interesting to see if the buyers of the stations Global has to sell will choose to be a franchisee of a Global brand or go their own way. If they do become a franchise it’ll be a sure sign that the economics of running even a regional station are tough to make add up.
Ofcom’s recent correspondence about Heart Cornwall is also very little to do with the output down there, it’s very much a warning shot across the bow of what Global (or a franchisee) will be able to do to the Real Radio stations.
Global started it with Heart, but I imagine there’s more to come as owners decide what to do with their maturing/declining analogue assets.
At a larger group level, the regulation and costs associated with running these smaller stations does start to seem crazy when a well-executed, regulatory-free service like Absolute 80s or Kisstory can engage with a million people from a standing start. I’m also not sure whether increasing speech at certain points from 30% to 50% on a single station in Cornwall will make much of a difference if your listeners have already made the move to listening to 6music on their digital radios!
This change the industry faces is completely led by consumers and their ready access to more media.
As an industry, that’s what we need to be focused on – the consumer, and how our product offer fits with their lives. I often think that we should stop competing with each other – our (joint) enemy is other things that compete for our listeners’ time.
When we look at our digital radio product (DAB, DTV and our stations online) it actually does incredibly well – with over 17million people already using it every week. As throughout history, the rise of streaming services, just like television, walkmans, CDs, iPods, the Internet etc hasn’t really caused us that much trouble. Well, it has definitely caused us (in the UK) considerably less trouble than it has in other territories around the world.
Quite a big reason though is history and dumb luck. The dominance and quality of BBC radio and commercial radio’s attempt to keep up has meant that our radio ‘product’ is really very good. And really we should start to think of what we offer as a whole – commercial and BBC.
As ‘radio’ we offer listeners a high-quality ad-free music product (through Radio 1, 1x, 2 and 6m) and well-resourced news and speech services through Radios 4 and 5 and LBC and talkSPORT. We offer two classical services – one high and one popular. We offer local radio channels (some music, one speech) targeting different demographics and localised for every area of the UK. We also offer a range of national and quasi-national stations playing different types of music, around 20 ethnically-targeted stations and even a children’s radio station too. Taken together the radio product is pretty good. It’s why 90% of the country choose to use it each week for a 1billion hours of listening.
I think, in our internal focus, we forget that it is actually one product – Radio. We need to ensure that ‘Radio’ is something that continues to be understood and valued.
I hope that we’re coming to an end-game of what Digital 1 will look like – the chopping and changing will start to stop and we will be consistently able to offer listeners a great choice of stations that cater for a variety of needs.
If we’re offering a ‘Radio’ product – whether that’s consumed on DAB, DTV or the Internet – it needs to be consistent, of quality and well marketed.
We are not immune to occasionally thinking this way. Radioplayer is a great example – a consistent product in webplayers and an excellent app on mobile and tablets that brings all of our stations together. Something we can all point to, and be proud of. And reading the comments in the app stores, is something listeners are proud of too.
But more than technology, I also think we can go further with how we market our product. I no longer think that solely concentrating on single channel brands should be our 100% focus. I’m not however advocating the tried-overseas, “isn’t radio great” marketing campaigns, usually just played on the radio.
Reach, even with young people, isn’t a big problem for us. Our enemy is time, the time consumers spend with our competitors. It isn’t because they dislike us, there’s just more stuff to do than there was in 1995. We were lucky we had these people to ourselves then, now we need to work harder to keep them.
If we’re concerned about young listeners, why aren’t we creating products (websites etc) that brings content together from Radio 1, 1Xtra, Kiss, Capital, The Hits and Fun Kids – whether that’s audio or video – and use it to show our quality and collective product’s relevance?
Yes, I would rather people listened to my radio station than someone else’s. However to do that they’ve got to be regular radio listeners in the first place.
If we were all just one product – like Sky, or Sirius or Pandora – we would be using our selection of channels to demonstrate the value of our product to subscribers. We would also be marketing specific chunks of it to different demographics to give them reasons to subscribe and get involved.
That’s why I think it’s time for us to think of ourselves as one product and make sure we’re using our vast content and skill to make sure that we continue to enjoy the success we have and grow our impact for the future.