The Hits-ification of Bauer’s Big City Network

Interesting news today from Bauer about Key 103 and the new Hits Radio.

One of the results of there being lots of multi-platform listening in the UK is that there’s been a large increase in national radio listening. Some of this is from new stations like 6Music and another chunk is from stations that used to be in one part of the country but are now national, for example LBC went from being a London station to a nationwide one. The other thing we’ve seen is the rise of the network – so stations previously called Galaxy (and other names) have taken on the moniker of another station – as is the case with Capital. For Heart, Capital and Smooth they try and balance the best of both worlds – a tight national format but localised FM and DAB distribution so they’re able to sell local as well as national ads. Kiss went the other way taking three regional FM stations and just running one service (including ads) everywhere.

Over the past few years Bauer and Global have been very busy re-arranging their portfolio and launching new stations. Indeed they’ve probably pushed each other on quite a bit.

Bauer’s had a lot of success with its national strategy with successful extensions for Kiss and Magic following the Absolute spin-off formula and good national DAB distribution.

The locals – your Key 103s and Hallam FMs have perhaps fared less well. A combination of an explosion in new national choice and then Capital and Heart either side of you on local FM puts you in a difficult spot. Do you go young, old, do you do the same thing etc. There’s probably no perfect answer. Defence is always difficult. The other difficulty is historically those FMs were very profitable too.  Any big changes might affect that income, but no change may mean your storing up even more problems for the future.

Bauer’s had two strategies for this locally. The first was the creation of 1, 2, 3 stations (I wrote about this when it was announced). The FM would be 1, the AM would be 2 and what was The Hits became 3. They’d all share the local branding so Hallam FM, Hallam 2 and Hallam 3. The benefits of this were that you’d double down on a local position and have three differentiated outlets for local advertising. Programming on all of them could be a mixture of local and national to taste. I didn’t think this was too bad an idea, but it hasn’t seemed to work. 2 has been kept whilst 3 has returned to being The Hits. As very much an outsider it didn’t seem that they really went for it. To make that sort of change you need a lot of marketing money to explain to non-listeners what you’re doing and what’s now available. All the stations should have heavily cross-promoted and web and social should have been aligned around the local name and always demonstrating the options listeners have. In the end it didn’t seem that there was loads of local buy in and ownership of all three stations and alongside little marketing, it all fell away.

Bauer’s other strategy has been around profit. They have successfully kept the contribution up by increasing the ad minutage, launching more premium rate contesting, promoting their own gigs and pushing their offers platform – often resulting in 16mins of ads per hour. At one station they were even putting up physical banners around their building. Gotta hit those targets!

Now the point of commercial radio is the first part of the phrase – commercial. If it’s generating the money you want, then good luck to you. Now clearly this has an affect on audiences – but local ad money is less reliant on the RAJAR figures – so if the audience drop doesn’t really affect your bottom line does the ad volume really matter?

I think the real question is whether there’s a point of no return? At some point do the figures drop to somewhere where they can’t be defended and your local commercial radio competitors can chip away at your high value commercial clients leaving you with lower value, and declining, national revenue matching your declining hours. Maybe. Perhaps in some places rather than others? I genuinely don’t have the answer.

Key 103, in particular, has had a bad time.

This will be a combination of new competition – national digital and more focussed FM, a squeezed programme proposition, a changing diverse area and that high ad load.

Their announcement today is that Key 103 is being replaced by Hits Radio a new hybrid radio station with two versions – one tailored specifically for Manchester and another for the whole of the UK. The stations will share the same talent including Gethin Jones, Gemma Atkinson and (Comedy) Dave Vitty on Breakfast and the services will come from the Manchester team.

This is a gamble for Bauer – Key 103 has a lot of heritage, but that heritage will be baggage for some and I’ll guarantee that their research will include statements like “it’s the station my Mum listens too”. Declaring brand bankruptcy is HARD but it’s probably the right thing to do.

Also a national mainstream 25-44 station with decent presenters and production support is also a good new national radio station to have. It also takes a bit of the fight to the competitors too.

Now the bits I find confusing:

There’s no announcement that it’ll be on national DAB. It’s instead on the same rag-bag bunch of local multiplexes, and no mention of it being even on London, so it’s difficult to do any clear marketing. This is especially weird as the press release talks about bringing the station “55% of the UK not currently targeted by Bauer City Network, with our clear ambition to become the largest radio network in the UK”. Yes, Freeview and Online make you ‘national’, but DAB is where all the listening is.

In the release Bauer make reference to it being the flagship of the new Hits Network (which is what was BC1) so I’m guessing that the network shows on Hits Radio will go on the local stations (like Hallam), it seems that some taglines have recently changed to be more Hits-y. I’d also imagine there’s the option of re-branding each/some locals as Hits [Area] at some point.

But it also seems that Hits Radio is to be replacing The Hits (a 15-24 youth service) on the local multiplexes, particularly the northern ones where there are other Bauer BC1 services like Hallam, Radio Aire etc. So now on DAB in Sheffield they’ll be Hallam FM, Hallam 2 and Hits Radio (playing similar music to Hallam (same log?) with some of the same shows and then some other different, more well known presenters). Oh and probably less commercial reads. Even more great news if your a local PC!

I’m excited for the new station, I’m interested in the re-brand of Manchester and how it’s supported (and whether that could be a good, positive, plan for some other under-performing Bauer areas). I’m also keen to see whether they tackle the ad load issue.

However, the distribution seems a bit, er, sub-optimal, it’s a confusing proposition for the London agencies who don’t pay that much attention at the best of times and perhaps wastes what seems like good effort put into a new station’s programming. I don’t see if they start down this path how the end-point can be anything other than a re-brand of at least the English stations and national DAB coverage.

I know it’s the first announcement and more details will follow but nearly 10 years on from the Heart re-brand, if Bauer’s aim really is to bring the Hits Radio brand to the 55% of the country that can’t get BC1, shouldn’t they just get on with it?

UPDATE: News from the boss…