Bauer Media's new local and national revenue strategy

Changes to Bauer Media's changes might not benefit listeners, but will certainly be good for the business

So, Bauer Media, the UK's second largest radio group, are planning big changes next January.

Initially, you might think it's a lot of new local radio stations, a lot of new choice, and new career opportunities for the radio industry. It isn't, really. But it's great for the company.

National listeners will welcome Magic (London), which becomes a national station on DAB. Magic promises 'feel good music radio', and has a great sound and almost mathematical precision in targeting its audiences. It will be a welcome addition to the dial for many; and it bolsters Bauer's big national brands of KISS and Absolute.

KISS Fresh comes to DAB in London (as I predicted it would), and old-skool dance station KISSTORY also goes to DAB. This shows renewed interest in DAB for these services: Bauer management were saying only a few years ago that young audiences weren't using DAB; and probably coincides with Bauer's bid for the new commercial digital multiplex.

The local stations continue with their local branding as, for example, Hallam FM (seen above in 1997 when I worked there). Local oldies services (which have also been called Magic in many areas) now become brand extensions of the FM station in that market, called, say, Hallam 2 - joining their Scottish stations. And The Hits in most markets becomes another brand extension of the FM station, Hallam 3, aimed at younger audiences. Bauer are king of the split idents, having run TFM as a split ident of Metro Radio for a while now; and they'll be using that knowledge in full effect.

Bauer's press release makes much of local programming, but "xxx 2" is networked as the old services have always been; it's just a name change (and, in Scotland, not even that). It sounds like, as now, there'll be an "xxx 2" for England and a separate "xxx 2" for Scotland, with split idents. And "xxx 3" is simply a rebroadcast of The Hits with some new jingles. No new jobs being made; no additional local programming.

So, why do it?

First, the emergence of Magic as one coherent national brand is welcome: for a long while, Magic has been a confusing mix: a golden-oldies service in the North of England and an easy, relaxed listen in London. With Magic, KISS and Absolute as their three national brands, this means Bauer stands to gain from clear branding across the national market.

Locally, it's a clever move. There are clear cross-promotion opportunities on-air, though time will tell whether they'll be taken. But the craftiness is in ad revenue: because it should mean an end to advertisers only wanting to advertise on Hallam FM and not Magic AM; now, they'll be pushing the benefits of the Hallam brand family. This is a trick learnt from Absolute and their Scottish stations.

And most importantly they're making a new locally-broadcast service, "xxx 3", which can carry local advertising for the first time. Local advertising is where there's a lot of revenue; and the loss of a coherent "Hits" brand (it continues in London) will be more than offset by significantly increased local advertising. The Hits brings 774,000 listeners, and over 2.2m hours, as inventory for local stations to sell.

Local advertising is important for any radio company; it's less price-sensitive, it is more consistent, it is much less affected by global economic conditions, and it isn't tied up in complicated contracts like national ad agency revenue. From this viewpoint, it seems that Global have increasingly placed their bets on national advertising; while Bauer appears to be ensuring that local advertising is emphasised as a major part of their business.

There's plenty I don't understand about Bauer: the continued existence of Absolute Classic Rock which seemingly competes against Planet Rock, the reluctance to use the industry standard Radioplayer in favour of a relatively poor locally-coded effort, and the slightly old-fashioned clinging on to an "FM" moniker in some of their revised station names.

However, these new plans are very clever for Bauer's business - consolidating their digital lead against Global Radio, their competitor, and opening up more local inventory for each of their local sales teams.

This isn't a programming story, then, and not really a story for listeners either; but a commercial story. As such it may initially disappoint those within the industry. But making a stronger radio business in future, and lessening dependence on national advertising revenue, is a clever move - and one that benefits us all.

Press Release

BAUER MEDIA UNVEILS focused COMMERCIAL RADIO OFFERING

• New strategy centres on key national brands: Magic, KISS and Absolute Radio
• Plus new launches with an extended ‘Place’ local portfolio

September 26, 2014: Bauer Media UK has revealed an ambitious new radio offering which will see the influential multi-platform media company focus on audience growth through three key national brands and an expanded local portfolio.

From January 2015 it sets out to significantly strengthen its position as the UK’s digital commercial radio leader, and to accelerate its audience growth both nationally and locally through brands offering complementary and commercially valuable scaled audiences.

• Bauer Radio is leading the commercial radio industry in digital, with over 50% of its listening through digital devices.
• There are 3 key brands at the centre of the national radio growth strategy; Magic, KISS and Absolute Radio.
• The local audience growth plan will be accelerated through the launch of two new local services in each major city to complement the highly demanded ‘Place’ stations.

Focusing on clearly differentiated and complementary audiences will not only drive strong audience growth but will also offer advertisers a coherent, simplified and scaled national and local brand proposition.

Magic, KISS and Absolute Radio offer clearly differentiated and complementary national audiences. They will be complemented by thriving fellow national brands heat radio, Planet Rock, and Kerrang! as part of Bauer’s multimedia strategy with a focus on entertainment-loving and rock-seeking millennials respectively.

Magic will launch as a national service on DAB Digital Radio in January 2015. It is already loved by 1.9m Londoners, and for the first time it will reach new audiences with its unique “good-mood” music proposition.

The iconic youth brand KISS will see its brand extension KISSTORY, the best mix of old skool and anthems, launch onto DAB Digital radio across several cities across the UK including London and Birmingham. The station has already smashed through the 1 million listener barrier as a streaming service in just one year from launch. Fellow KISS brand extension KISS FRESH, which offers non-stop new music and beats, will also be available for the first time on DAB in London.

Absolute Radio is set to be grown under Bauer’s ownership, with a marketing campaign launched this week focused on the brand’s “Stand-up at Breakfast” proposition.

In Bauer’s local radio markets the ‘Place’ portfolio will be enhanced by two new brand extensions in each city. The portfolio will continue to broadcast brilliant local content with “Your Music, Your Life” brand positioning. The new services - derivatives of the main brand - will be launched to serve the needs a wider spectrum of listeners in each area.

For example in Liverpool, “Place 1” - Radio City on FM - will be extended with “Place 2” (eg Radio City 2 on AM) which will expand the appeal to an older, focused 45-64 year old audience, and “Place 3” (eg Radio City 3 on DAB) will offer an entry point offering current hits to a younger 15-25 demographic – further strengthening our digital capabilities. Both extensions are aimed at boosting local audiences and will offer a simplified proposition to consumers and advertisers alike.

Commenting on the new strategy, Dee Ford, Group Managing Director said, “This strategy marks a new era for Bauer Media’s radio brands. Our aim is to accelerate our significant lead in digital listening, growing our audiences both nationally and locally whilst making it easy for customers to access those scaled valuable audiences. Significant investment in content, talent, marketing and platforms is underpinned with the energy and drive of the Bauer Radio team”.

Bauer Media also recently heralded further ambitions in digital radio by announcing its involvement in a consortium with Arqiva and UTV Media. The groups will collectively bid to operate a second national DAB multiplex licence in the United Kingdom, known as D2. This licence would offer an exciting opportunity for the commercial radio industry to further extend its reach and services, and underpin digital listening growth in the UK.

All changes to the Bauer Media Radio Portfolio take effect in January 2015.