Radio Tomorrow with James Cridland
It’s been quite a week in UK radio.
First, a bit of context. Radio advertising in the UK is 70% national, 30% local. Local advertisers will always buy from their local station no matter who owns it; but it’s more work, and therefore less profitable, for ad agencies to buy radio groups with 3% of listening hours, when they could just buy one group with 48%. Scale is important.
Advertisers buy radio based on cost-per-thousand people their ads reach. So, the figure that matters most isn’t the number of radio station you own, or even how many people that listen to them — it’s the total listening hours your group has.
Which leads us to an extraordinary week in radio consolidation.
Bauer — the #2 commercial group by total listening hours — bought not just one but three local radio groups — Celador, a company in the South West and the East; Lincs FM Group, owning a number of stations in and around the Midlands, and Wireless’s local stations in the North West, Midlands and South Wales. Sounds a lot. Looks a lot, too — that’s a lot of stations, transmitters, and people.
Global represents 48% of all commercial radio in the UK. Bauer used to represent 32% of UK radio listening.
With all these purchases, Bauer is no longer just 32% of all UK radio listening. They’ve grown to be 35%. That doesn’t sound much, but 3% market share means a 10% growth for Bauer’s business, and economies of scale (not least additional national ad revenue) means it’s probably worth more than that in terms of profit.
It’s good news for people — Bauer have a great track record of recognising the talent they’ve acquired. Many excellent people from Absolute Radio or Orion Media, companies that Bauer have previously bought, are still with the company, with elevated positions. It is very good with people: whenever I’m in a Bauer building, I’m still seeing people I worked with in the mid 1990s at Hallam.
However, Bauer don’t have a great track record of integrating brands. It stubbornly holds on to heritage brands in spite of networking a lot of output. For a while, the company famously operated a station called “Rock FM 2” — which didn’t broadcast rock music and wasn’t on FM. I’ve no idea of the difference between Absolute Classic Rock and Planet Rock, as one example. Two thirds of songs played on Absolute Classic Rock are also played on Planet Rock.
Global has just eight radio brands in its portfolio. Bauer had 30, and has just purchased another 44. In a world of social media and far fewer borders, disparate brands don’t make sense.
I do hope that Bauer continue to be good with people, for the sakes of all involved: and that it begins to be better with brands, too. Great, healthy competition is good for everyone.
About The Author
James Cridland, the radio futurologist, is a conference speaker, writer and consultant. He runs the media information website media.info and helps organise the yearly Next Radio conference. He also publishes podnews.net, a daily briefing on podcasting and on-demand, and writes a weekly international radio trends newsletter, at james.crid.land.
Contact James at [email protected] or @jamescridland