Very interesting and helpful, pal.
What I’m trying to square off is radio listenership figures remaining steady/strong throughout the recession and into the recovery (let’s keep that recovery going) but advertising revenues for radio not bouncing back appreciably at all while it’s picking up in all the other medias/mediums (delete as appropriate). Is it simply being squeezed out because something has to be?
My own opinion on the above is that there is a certain amount of consumer snobbery on the part of prospective advertisers here. Radio advertising is not sexy. It doesnt give clients a chance to sit around a table for days mulling over decisions on casting/branding/thematics. Allied to this there is the industry wide perception that evrrything should be migrating to digital even if radio is a proven performer and many digital performers remain unproven. In short, radio is old and unsexy andis therefore undervalued.
Feel free to pop this in your ideas fridge and snack on it later.
That was a decent article.
The two main takeaways was the general consensus out there that there is one too many licencenses in Dublin. The other that Newstalk will need another 10 or so years to bed down and will DOB support it till then.
Podcasts are the big threat to talk radio. I think the talk radio listener for Newstalk/The Last Word is the type of person more likely to hunt those out so that’s a bigger threat to them. Radio 1 is a different animal altogether.
I don’t see why people are more likely to switch from commercial music stations to Spotfiy than they were to CDs and then the iPod.
Anyone know why most of the music stations take their news at the top of the hour btw? I always thought it odd that only Spin 1038 took theirs early, which was a smart enough move as plenty of people in the commercial radio demos couldn’t give a rats arse about the news. Surely you’d want to differentiate yourself from the other Top 40 type stations and offer some music when they are off at ads. Licence thing or a handshake agreement?
that’s incredible
Old unsexy and undervalued. I thought I was reading about myself there for a second.
Take another stroll through Arnott’s
I don’t think podcasts are a huge threat to talk radio. The big advertising for talk radio are based around rush hour drive times, when most people listen to radio in their cars. There is a certain amount of preparation required to listen to a podcast and all cars have radio. It’s just easy. Likewise, much of daytime talk radio is listened to at work, where dropping in and out of engagement suits it.
People won’t switch from commercial radio stations to spotify as much because most commercial radio listeners are a younger demographic and most of the young music consumers grow up using youtube and spotify to stream music and don’t go near commercial radio in the first place.
@bandage I forgot to mention that there is an issue with RTE and their Saudi like grip on advertising. Obviously they command the highest fees, but they have so much airtime to fill they can 'flood ’ the advertising market and offer cut price advertisement to clients. Newstalk and today fm are always up in arms about it.
FAO of @Juhniallio and others. Here’s the referenced article:
[quote]Radio Daze
The collapse of TXFM sent shockwaves round the airwaves. As the digital sector continues to poach ad revenue, how long can the show go on for commercial radio?
Samantha McCaughren
May 1 2016, 1:01am,
The Sunday Times
In late October 2006, the launch of the indie rock station Phantom FM was celebrated with a huge party in Dublin’s Village music venue.
No expense was spared, with the line-up featuring some of the country’s hottest music acts, including the Blizzards fronted by Niall Breslin, better known as Bressie.
With a marketing budget of €250,000 for its first few months on air, adverts for the former pirate station were plastered all over Dublin’s city centre.
“Everything was done on a big scale,” said Simon Maher, a co-founder of the station, whose big-name backers included former U2 manager Paul McGuinness and MCD’s Denis Desmond.
Phantom FM got off to a good start, bringing in ad revenue of more than €1m a year. Then the recession struck, and income declined very heavily.
Communicorp, Denis O’Brien’s radio group, became a shareholder in a restructuring in 2010. A year later Maher left the station in a management shake-up. Two years ago, Phantom was renamed TXFM after relocating to Communicorp’s Marconi House.
Despite Communicorp’s immense resources, TXFM failed to reverse its losses. Communicorp and its other backers sank €5.2m into the venture but, a month ago, it became the first licence to be handed back to the regulator.
Although there is some growth returning to the radio advertising market, the TXFM failure demonstrated that conditions remain tough.
According to a report from Davy, the radio business will struggle in 2016 as the market remains highly competitive.
The latest JNLR listenership figures released on Wednesday evening provided little comfort to commercial investors.
Aside from RTE Radio 1, most national stations saw leading presenters shed listeners. Communicorp’s talk stations Newstalk and Today FM saw big names including Pat Kenny and George Hook lose listeners, while RTE’s 2fm is also finding that return to growth is an uphill battle.
Radio’s commercial break is lasting longer than expected.
John Purcell of the Independent Broadcasters of Ireland (IBI) believes the radio sector will remain resilient. The decision by Communicorp and the other TXFM shareholders to return the licence is evidence that margins at many radio stations are extremely slim.
He estimates that radio will see growth of about 3% in 2016: “We’re recovering in two and three per cents, not the tens and fifteens and twenties we fell by, so it’s a long recovery. We can’t be complacent.”
Davy analyst Robert Stokes said the Irish radio advertising market had been severely hit by the downturn, falling an estimated 50% from peak to trough. He added radio had yet to feel the broader recovery. “The economic growth experienced in Ireland in recent years has not been reflected in the Irish radio advertising market, which moved only slowly out of the trough.”
Stokes said that 2015 became increasingly competitive for radio operators, with stations increasing their spend on marketing and investment in talent, while discount pricing remained a feature of the advertising market.
Listeners spend similar amounts of time listening to the radio as they do watching television and going online, according to Core Media, one of the country’s largest media buying agencies. Yet the medium still lags behind in the advertising investment it attracts. In 2015, radio got a 14.3% share of ad spend in the Republic of Ireland, down from 15.1% in 2014. This is a greater percentage share decline than any other sector with the exception of magazines, said the agency in its annual review.
Despite this, Craig Farrell of Core Media believes radio may grow by 5%, which is one of the higher estimates among the agencies.
Bill Kinlay of rival agency Mindshare said the radio market was extremely competitive, with Wireless Group (which was formerly UTV Radio), Communicorp and RTE squaring up to each other.
“RTE are getting their act together in a big way. They are much more organised than they used to be. The focus has been on 2fm under Dan Healy and they are on the way, making good progress.”
Kinlay believes radio is having a worse time than TV or outdoor advertising. “There are a number of reasons. I don’t think it’s anyone saying, ‘I’m going to pull money out of outdoor or pull money out of radio and put it on TV.’”
Radio is not seen as cool at the moment. Ad agencies say ‘get me on Google, get me on Facebook
In the main, he said, a lot of clients use radio as a frequency building medium. “It adds frequency behind your TV message or your print message, and it’s still strong at doing that. But as things have tightened up, clients have cut back and might be saying, ‘I’ll do one less campaign on radio this year.’”
The radio market has been fairly flat for the first quarter, “so it’s not as if has fallen off a cliff”, said Kinlay. For the year, Mindshare predicts a 1%-2% rise in ad spending on radio.
Another challenge for radio is to find its place in an increasingly digital world. Wireless Group has just rebranded its sales division as UrbanMedia.
“One of the key decisions for us was that radio wasn’t in the name, as we felt it should reflect all we can offer,” said the UrbanMedia sales director Brian McCarthy.
Advertisers are seeking social media and digital aspects to their campaigns, so UrbanMedia is focusing on campaigns online, as well as radio.
Spot advertising, the traditional advertising slots on commercial breaks, is on the decline.
“I know that there is talk of spending increasing but I don’t think any client is going to spend more money on spot advertising than they were last year, and that’s an ongoing trend,” said McCarthy.
While this year is expected to see modest growth, Davy predicted that it would be 2017 before radio ad sales numbers would start to improve.
McCarthy claimed that the industry would “have to work for it”. “We’re all going to have to do better and make sure we’re all promoting radio as a medium,” he said.
One innovation welcomed by advertisers has been the radio player, bringing together RTE and commercial stations on a single app.
“I’d rather be fighting over a big pie that is created by us all than over what could be a decreasing pie,” McCarthy said.
Despite the challenging backdrop, several senior broadcasting sources said that the sector as a whole felt shocked when the TXFM licence was handed back.
Communicorp and the other TXFM shareholders, McGuinness and Desmond, decided not to reapply for the licence, which was in the process of being renewed by the Broadcasting Authority of Ireland (BAI). Communicorp’s involvement had been seen as a guarantee that the station would survive.
One source said: “It had all the resources of Communicorp behind it and was only paying the salaries of six people. It wouldn’t have taken much investment to try something different, dress it up, reinvent it. For them to give it back is amazing.”
Sources believe the station was losing €100,000 a year.
Another media insider said that the failure was evidence that one licence too many had been granted by the BAI.
“We’re really at the outer reaches of the number of radio stations that this small country can support,” he said.
Gervaise Slowey, chief executive of Communicorp, said that it was “a really reluctant decision” to give back the TXFM licence.
“The problem with the station was that it was a fantastically loved station by a niche audience,” she said. “The reality was that the market was too small.”
The shareholders had to make a decision, Slowey added. “You can’t go in without a long-term commitment, and we just felt we weren’t going to be able to make it work.”
While Communicorp decided to walk away from TXFM, Slowey said that she was encouraged by overall listening figures for radio.
About 83% of people still listen to radio in Ireland, despite the rise of Spotify and other digital alternatives.
Slowey said that Communicorp research carried out among the big ad agencies a fortnight ago suggested that spending in the overall advertising market was expected to rise by 5% this year.
Within that increase, digital is expected to be up by 17%, and Slowey believes outdoor, radio and TV will all experience about 3% growth, although TV may end the year a bit higher than the other two.
Slowey said that Communicorp would be ahead of predicted market growth.
“It has been a poor April, but it’s not a month that tells the story — you have to look at the full year.”
Newstalk, the group’s national talk station, has become a an important alternative to RTE’s news output. However, since launching in September 2006, it has struggled to make a profit.
Slowey declined to comment on whether the station was now breaking even.
Accounts for the group in 2014 suggest that O’Brien continues to support the group financially, lending it €16m in that year alone.
Slowey admitted that talk radio was very expensive.
“It is very difficult to make the commercials work. We are getting there and Newstalk is growing its market share, generally speaking. It has ups and downs but we are on the right track.”
She said that the group was very pleased with Newstalk’s development and was “looking forward to keeping on building up that business”.
The station does face challenges. Its election coverage, for example, cost €400,000.
“That’s doing the count centres around the country, and meeting the politicians. We don’t get a single penny for a public service like that,” said Slowey.
“If there is another election we just wouldn’t have the money to do that. That would be a serious concern for us.
“The reality of public service broadcasting is that it is enormously expensive.”
Despite the drain on O’Brien’s resources, the group is in the process of having its licence application renewed. The vast majority of commercial stations are profitable, even though it can take time. Sean Ashmore, chief executive of 4FM, is a co-founder of Sunshine 106.8 in Dublin. Formerly Dublin’s Country, Sunshine moved into profit a year ago after 13 years on air.
Now seven years on air, 4FM is approaching breakeven but is not there yet. “It is tough and it continues to be tough,” said Ashmore. “But there is light at the end of the tunnel — even if it’s some distance away.”
Some in the industry believe it could take 20 years for Newstalk to become a truly established brand. Now halfway through that time frame, all it needs is the perseverance of its billionaire shareholder.
Maher is the first to admit that the expectations for Phantom FM were unrealistic. “There is a degree of sanity in it now. If you go back 10 years, there was crazy money being spent on radio stations and there was a lot more money from advertisers,” he said.
Maher, now running digital station 8radio.com, had been planning to found a radio station to compete against Phantom for the niche licence but estimated that, at most, the station could bring in €400,000 a year in commercial revenue. It would be run on a shoestring.
“The business model has to be right. You would have to cut costs to the extent you wouldn’t be in the JNLR survey; you will outsource an awful lot of your back office, even possibly sales.
“Radio is just not seen as cool at the moment. When I go to an ad agency, it’s ‘get me on Google, get me on Facebook’. Radio always had a cool vibe that probably outweighed its audience, but I don’t think it’s there at the moment.”[/quote]
Mate. Sign up to medialive for loads of stats.its where i get my viewing figures from for debates
How come we never really got satellite radio? It’s all the go in the states. I suppose our market is too small?
Has Caul Pollins left today fm? Not doing the GAA show on Sunday mornings anymore, not on in the morning for a bit
Poor auld Dessie and Joanne have been on the radio now for about seven hours. Dessie is babbling at this stage about following Mcllroy tomorrow. And don’t start me on Cantwell.
The Tulla Ceilidh band are on Ceilidh house at 9pm tonight. Live in the studio. It’s going to be deadly.
You on the Champagne Cocktails?
I am seriously tempted here.
Big changes to the Newstalk schedule
Newstalk’s political Editor Shane Coleman will be joined by TV3 news broadcaster Collette Fitzpatrick, INM’s Paul Williams and former Irish Rugby star Alan Quinlan to anchor the station’s new Breakfast Show. Business Editor Vincent Wall will continue his successful 6:30am - 7 am Breakfast Business slot.
Pat Kenny will now host a longer show from 9am - 12pm daily, with George Hook taking over a new lunchtime slot from 12pm - 2pm.
Sean Moncrieff’s dynamic programme will now be broadcast from 2pm - 4pm.
Current Breakfast presenter Chris Donoghue will now co-anchor a new Drive show, where he will be joined by Sarah McInerney, political correspondent with The Sunday Times. The duo will be on air daily from 4pm and listeners can expect an exciting and lively debate on the day’s news, with everything from business and technology to entertainment and sports on the table.
The Off the Ball team will be joining Chris and Sarah on a regular basis from 6:30pm, ahead of their own 7pm programme.
Speaking about the new schedule and lineup, Garrett Harte, Station Editor-In-Chief said:
“We’re delighted to welcome Colette, Paul, Sarah and Alan on board. They bring energy, curiosity and the dynamism to complement the great team of presenters we already have at the station.
Newstalk has continuously pushed the boundaries and offered listeners a different outlook over the past decade on deep diving issues including the General Election, Marriage Referendum and homelessness and abortion to name but a few – and we’re looking forward to the next ten years of being at the vanguard of Irish radio.”
Tim Collins, Newstalk’s CEO, added:
"The strategic changes will continue to drive and deliver Newstalk’s plans for further growth as the country’s leading station for the 25-54 year old audience, for whom Newstalk is already the established brand of choice. The new radio schedule will also develop and widen our total audience across Newstalk’s radio, player, online and social platforms.”
So the Off the Ball team have gotten what the other boys got the hump over not getting.
I presume Quinlan is there to make the boys tea or something?
They’ll have to shoot Hook to get rid of him.