The widespread availability of the internet has upset the established distribution methods for traditional media. That’s the root cause of the current crisis facing the newspaper and magazine industries and beginning to bite into broadcasters’ revenues. And, argues Bauer Media’s group commercial director Simon Kilby, it’s about to start having a significant affect on the radio industry as well:
“If you look at any media, TV, newspapers… digital, the entry of digital into the market had disrupted distribution massively, and you’ll start to see it happen now in radio significantly. Radio used to be very staid – the FM and AM licenses, it was quite difficult to change that.
“Now, because of two things – the rise of DAB and digital connected devices – things will significantly disrupt distribution over the next few years.”
Until now the radio industry in the UK has been remarkably resilient against the ravages of digital. Figures from RAJAR demonstrate that the average reach of radio has hovered around the 90 percent mark for over a decade now, while the amount of time spent listening – a more important figure – has increased.
That’s been reflected in ad spend on radio similarly increasing, with the Advertising Authority and WARC forecasting that figure will continue to rise over the next year. Kilby says:
“It’s proved pretty resilient; there’ll be growth again this year and part of that is about radio being a complementary medium. There’s also something about what we’ve done – and in fairness what Global have done – about reorganising the market into brands that the advertising market understands.”
That redefinition of the radio brand is at the heart of Bauer’s plans to succeed as digital distribution of radio content grows.
Steve Parkinson, the group managing director of national radio at Bauer Media, explains:
“At the beginning of this year, in 2014, we had quite a major review of all our audiences, brands and platforms, it was comprehensive. I think what happened on January 5th, that was D-Day for the launch of a focus of 55 stations down to four principle pillars.
Perhaps, under Emap, we were slightly more platform-led because we were first into Freeview, first into DAB, which is great. But as a result we had to have a point where we rearranged to where the audiences were and the consumer behaviours were going.”
And Bauer’s radio brands have arguably been seeing more success in anticipating consumer behaviour than most. While, according to RAJAR, 40 percent of radio listening is now done on digital platforms, Bauer is seeing fully 53 percent of listening to its stations done digitally.
While a large part of Bauer’s success in that regard can be put down to the reduction of its brands into what Parkinson calls the “four main pillars” of Magic, KISS, Absolute and the Bauer City Network, he also believes the group’s anticipation of audience habits should inure it against the changes to distribution:
“There’s more opportunities to listen digitally, whether that’s broadcasting on DAB…we were first into Freeview.
“Bauer is certainly the biggest commercial DAB landlord in the UK, so we’ve got a lot of real estate to use. We can either rent that to the BBC and Global or we can use that ourselves and I think what we’ve been able to do as part of this new strategy is match the platform to where the audiences are growing too.”
Radio content has enjoyed a slight advantage in that the environments in which it is consumed is protected (examples provided by Nielsen include ‘the daily commute, at-work listening, lunch break tune-in‘), the increasing availability of 4G, wi-fi and mobile devices could mean that radio content will now be competing with text and video for audiences’ attention.
Despite that, Kilby sees that as opportunity for Bauer’s brands:
“From a RAJAR perspective overall one of the reasons that radio listening has remained really resilient, it’s because there are now more and more opportunities for people to listen. The rise of things like 4G, wi-fi penetration, are all opportunities for radio to compete in that time-listening.”
Noting that around a fifth of listening of the youth-focused station KISS is done on mobile devices, Kilby notes that connected devices on which Bauer can leverage its InStream ad targeting option are more of an opportunity for Bauer than a challenge.
If figures from RAJAR are anything to go by, that advantage will likely increase as proportion of digital listenership grows:
As a result, Bauer now has the highest number of listeners to its commercial digital platforms in the UK – 10.4 million, a rise of 7.9 percent year on year. As Kilby says, an audience of that scale, many of whom are on connected devices, presents a great opportunity:
“We were the first people in the UK to launch an InStream service. The learnings we got from that were that client and agencies loved it but we didn’t quite have the scale as Absolute to make it work, so Global radio have launched in the market a year ago with DAX.
“We’re thinking now about how we move into that connected space with an ad product; not just on Absolute but on some of our other stations as well.”
Questions remain about the viability of Bauer’s strategy, especially if, as Kilby suggests, radio rests upon the precipice of digital disruption. But by pre-empting the listening habits of the audiences for its brands and promoting the kind of data-led logged in economy we’re seeing work elsewhere in the media industry, Bauer Media’s radio brands are in a relatively strong position to weather that storm.