Saturday, 29 January 2011

Bauer Radio talks the DAB talk, but walks its Magic brand off DAB

Bauer Radio is the second largest commercial radio group in the UK. It publicly supports the government’s plans for DAB radio switchover. Only this month, Paul Keenan, chief executive of Bauer Media, told The Guardian: “What part if any is the BBC going to play on the local DAB level?” He went on to ask:

“Will there be some form of seismic content innovation or intervention that really pulls listeners across [to DAB]?”

Keenan need have looked no further than his own company’s DAB radio strategy to discover a form of “seismic content intervention” that might well result in pushing existing listeners away from DAB, rather than pulling them in. While Keenan was talking to The Guardian, Bauer was busy pulling the plugs on its ‘Magic’ brand from the DAB platform in the following
areas:
· Aberdeen
· Ayr
· Birmingham
· Bradford & Huddersfield
· Cambridge
· Dundee & Perth
· Edinburgh
· Glasgow
· Kent
· Northern Ireland
· Norwich
· Peterborough
· Stoke
· Sussex Coast
· Swansea

If you were a loyal listener to Magic in one of these areas, your favourite station simply disappeared from the DAB menu in January 2011 (Magic had 1m out-of-analogue-area listeners per week, contributing 24% of the brand’s total hours listened, according to RAJAR). This change is surprising given that, as recently as May 2008, Bauer Radio decided to add its Magic brand to the DAB platform in the following
areas:
· Aberdeen
· Ayr
· Birmingham
· Bradford & Huddersfield
· Cambridge
· Dundee & Perth
· Edinburgh
· Glasgow
· Kent
· Northern Ireland
· Norwich
· Peterborough
· Stoke
· Sussex Coast
· Swansea

In 2008, in most of these areas, Magic had replaced another Bauer brand, ‘Kiss’, which could not have pleased existing Kiss listeners. Now, in 2011, it is the Kiss brand that is replacing the Magic brand in all but three of these areas. Musical chairs, anyone?

In 2009, Bauer had
said that it was investing in the “right long-term platforms for the right stations at the right time.” So, in 2008, Kiss was right for DAB whereas, in 2011, now Magic is right?

It is hard to believe that such precipitous content changes inspire consumer confidence in the DAB platform. But, sadly, the DAB platform has never really been about ‘radio’ and ‘listeners’. Loyalty to DAB radio? What’s that? For commercial radio, its pursuit of the DAB platform had been about the exercise of power, the expectation of profit and the promise of automatic renewals for the industry’s most valuable analogue radio licences.

It was also about a much coveted transfer of the power to determine which stations are broadcast to a cartel of commercial DAB multiplex owners, and away from the regulator. This is why station changes on DAB, such as Bauer’s (Kiss to Magic to Kiss) can be executed without a public consultation or impact assessment.* The regulator merely nods its head and makes a quick note in a file. So what role does Ofcom play in
ensuring that the DAB radio platform “furthers the interests of citizens and of consumers” as mandated by law? The answer is: absolutely none. We might as well have a scarecrow in charge of digital radio at Ofcom.

The reason that Bauer Radio (with a 25% listening share of commercial radio) made these latest changes to DAB is that it is locked in a war with archrival Global Radio (38%). Neither company has a track record of developing its own successful radio stations from the ground up. Both companies are piled high with acquisitions and mergers of other radio businesses. As a result, the two compete with each other by moving their radio pieces around the chess board, rather than by innovation.

In January 2011, Global Radio extended its ‘Capital’ brand outside London, replacing the former ‘Galaxy’ brand and some local FM stations. Global describes the
brand:

“Capital’s target audience of 15-34 year olds are big fans of popular music, they are media savvy and are on trend.”

To compete, Bauer Radio extended its Kiss brand to every available local DAB multiplex (replacing Magic). Bauer describes the
brand:

“Kiss evolves around ever changing lifestyles and trends of the UK’s young 15-34 market … Every part of their day revolves around music.”

If, like me, you think that these two brands sound almost identical, understand that this phenomenon is the outcome of long understood business practice in the radio sector. In 1951, American economist Peter Steiner wrote:

“If, as is often suspected, [radio] broadcasters exaggerate the homogeneity of audiences and their preferences for certain program stereotypes, the tendencies towards [programme] duplication will be increased. … The problem, of course, is that a series of competing firms, each striving to maximize its number of listeners, will fail to achieve either the industry or the social good. Here, then, competition is providing a less than desirable result.”

In the UK, this is precisely why we have a regulator for radio broadcasting – to ensure that consumers benefit from a wider choice of content than a free market would provide. However, with its hands tied in DAB policy by the Broadcasting Act 1996, and its laissez-faire ‘do nothing until someone complains about it’ strategy, Ofcom has had no more impact on the DAB station menu than having no regulator at all.

DAB is the Wild West of radio where anything can, and often does, happen. Seemingly, it often happens with little concern for listeners or for those who paid good money for a DAB receiver. Without a sheriff in sight, or a cavalry about to ride over the horizon, the danger is that the public might come to view DAB radio as nothing more than a bunch of cowboys locked in a private war of one-upmanship.

Yet the radio industry wonders why the DAB platform is not stimulating more listening or more receiver sales.


[*NB: There was an Ofcom
consultation in November 2010 about a change of format for the Kiss brand, but this did not touch upon Magic being dropped from DAB. Magic continues to be simulcast on DAB in nine areas where it is already available on FM or AM, as a contractual condition of its automatic analogue licence renewals.]

7 comments:

Anonymous said...

Ofcom would only permit Bauer to drop all local content from both Kiss 101 & Kiss 105-108 on the basis that they transmit the London Kiss service to almost 80% of the country on DAB, making it a quasi-national service under the terms of the Digital Economy Act 2010.

To achieve this level of DAB coverage Bauer had to reverse the decision taken in 2008 to remove Kiss from many of the local DAB multiplexes. It's an issue of regulation rather than an issue of whether Kiss or Magic is a more attractive proposition.

They could have retained both Kiss & Magic on some of these multiplexes as there is space for both. However the extra carriage costs of having both stations on a range of DAB multiplexes would have wiped out a percentage of the savings made from the closure and redundancies on Kiss 101 & Kiss 105-108.

There is no requirement or incentive (such as a licence extension) for Bauer to pay for carriage of Magic on DAB in areas not covered by an analogue licence for the station. Hence it was an easy decision for them to swap Magic for Kiss and close the studios in Bristol & Bury St Edmunds, with the resultant cost savings.

I have heard that Magic may replace the digital-only station Heat in due course.

Grant Goddard said...

Dear Anonymous

Thanks for your contribution. I particularly liked your phrase: "It's an issue of regulation rather than an issue of whether Kiss or Magic is a more attractive proposition."

This reflects what I had noted in my blog:
"Sadly, the DAB platform has never really been about ‘radio’ and ‘listeners’."

DAB is populated largely with stations that group owners decide to put there for reasons other than securing a loyal audience and selling advertising spots.

Yours, Grant

Grant Goddard said...

A reader, Edward Cullum of Peterborough, kindly sent me a copy of a letter on this issue that he had sent to his MP, Ofcom, Arqiva and Magic FM. The text was:

Dear XXX

End of DAB broadcasting for Magic 105.4 on Cambridgeshire DAB Transmittters

On 6th January 2011 both the Peterborough and Cambridge DAB transmitters stopped broadcasting Magic 105.4 from London. I do not know if other DAB transmissions were also taken off air for Magic but this was extremely disappointing for me as in my view the format of Magic is exceptional. The station is very professional with presenters who are not patronising or egotistical and the music to speech bias is very welcoming with a well moderated quantity of commercial breaks. Therefore to discover that the local multiplexes had now replaced Magic with Capital was extremely annoying. Firstly there was no announcement on Magic as far as I am aware that the DAB transmissions were to cease and secondly there is clearly no like for like format style replacement with the new occupant of the multiplex allocation.

Capital is clearly targetted at a younger audience and Magic was targeted at my age group with an easy listening adult contempory format on a similar style to the Radio 2 format a few years ago (before the era of Chris Evans etc). What saddens me is the apparent lack of control with the allocation of these frequencies linked in to the contractual franchise period of the broadcaster. It seems wrong to me that the broadcaster is not bound to remain on the allocated DAB frequencies for the duration of their main license. Looking at your Local Multiplex license form on your website it shows an expected duration of 12 years when a local multiplex license is awarded. Therefore why would Magic have to come off air locally?

I am concerned that the DAB broadcast medium is being managed very poorly as stations can come and go off a multiplex with no apparent regard for the listener. This will discourage listeners from using using this medium let alone the fact that Ofcom have permitted a low bit rate of 112kps to be used. I know I am one of few people that listen to DAB in the car and yet to me DAB provides choice that you cannot get on FM. However, I believe DAB is being relegated to a second rate broadcast medium worse than Medium Wave because of the casual way stations are suddenly allowed to be dropped off the multiplexes.

I appreciate the economic climate we are in and that perhaps Magic and others have had to tighten their belts and focus on their primary target audience. However, I would like to suggest that the allocation of broadcasters to DAB is at least driven by providing choice not just who can pay up to the multiplex provider. When a station such as Magic is dropped, the replacement in my view should at least have a similar format and target audience so as not to alienate the DAB listener.

For me the future of DAB as a successful medium is in the hands of the current goverment and Ofcom and I hope it will not become an acronym for a Dead And Buried form of broadcasting that was once tried in the UK.

Yours sincerely

Edward Cullum

Anonymous said...

These periodic swaps of channels really undermine what is an already struggling platform.

I own two DAB radios. We only have access to the two national multiplexes here in Oxford. The promised local bouquet never materialised.

In that same time the web radio has expanded hugely, its on our iphone (connected to one hi-fi system) whilst our apple-tv acts in the same capacity on the main music system. Oh and there's radio on the satellite TV - also linked to our main music system.

What exactly is the DAB system going to deliver that isn't there already?

Grant Goddard said...

Below is the text of Ofcom's reply on 1 Feb 2011 to Edward Cullum's letter

Dear Edward,

Thank you for your e-mail to Graham Howell dated 19 January regarding the removal of Magic 105.4 from the local Cambridge and Peterborough multiplexes, to which Graham has asked me to respond.

Just to clarify, Magic was not replaced by Capital on these two multiplexes. Around the same time that the Magic 105.4 service was withdrawn from these multiplexes, the service on the Cambridge and Peterborough multiplexes formerly known as ‘Galaxy’ was re-named by its owners (Global Radio) as ‘Capital’.

I empathise with your disappointment at losing your favourite station. Had the proposal from Magic’s owners, Bauer Radio, been to replace Magic with another service, we may have had grounds to reject that proposal if we felt that the replacement service would have unacceptably narrowed the range of programme services available on the multiplex.

Unfortunately, the proposal was simply to remove Magic and not replace it with any other service. While this was extremely disappointing news, ultimately Ofcom has no practical means of forcing a company to continue to provide a particular service on the multiplex, if they no longer wish to provide that service.

I would suggest that you get in touch with Bauer Radio to make them fully aware of how much Magic is being missed by DAB listeners in your area, and urge them to reconsider their decision to remove Magic from these multiplexes, given that – at this point in time – there is still spare capacity available.

Incidentally, on this issue of licence durations, Magic is obliged to broadcast on DAB for the duration of its (analogue) licence in London. This is because the ongoing renewal of its analogue FM licence in London is wholly dependent on it continuing to being broadcast on DAB in that area. The DAB broadcasts of Magic in Cambridge and Peterborough, on the other hand, were not supporting the renewal of any analogue radio licences.

I hope this answers your questions.

Regards,
Jon

:: Jon Heasman
Manager, Commercial Radio Licensing, Ofcom

Anonymous said...

We used to listen to Magic DAB on the Sussex Coast all the time. Now it's gone we will not listen to Kiss. Magic was far better. Give us our Magic back.

Anonymous said...

I too used to listen to Magic DAB all the time, in the Cambridge area, and would like to see it brought back.