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WITH THE PURCHASE of Communicorp by Bauer Media, the consensus is that Irish radio is about to go through a major transformation.
Industry experts have reacted positively to the news and believe the German media giant is ideally placed to grow the business — which includes Today FM, Newstalk and 98FM — after a major restructuring in 2016.
Further investment in the company is just what the doctor ordered after that shake-up, which was a brutal experience for staff with many losing their jobs in the process.
It did, however, help put Communicorp on an even keel after some lean years. Ireland’s largest independent radio group even posted an operating profit — its first in many moons — of nearly €3.8 million in 2019, according to accounts filed with the Companies Registration Office before Christmas.
Since then, however, the pandemic has turned everything on its head, not least the advertising market, the key source of income for radio stations and media outlets in general.
We’ll have to wait until Communicorp files its 2020 accounts to fully assess the impact but if there has been an upside to the upheaval, the pandemic year saw listeners flock to their radios.
According to the latest JNLR listenership figures released last November, that rising tide lifted many Communicorp-owned boats. At 7.8%, Today FM enjoyed its highest-ever market share last year with a whopping 877,000 people tuning in weekly, 100,000 more than its RTÉ rival 2FM.
Current affairs programming has been a particular hit with listeners in the past 12 months and, accordingly, Newstalk has reaped the benefits.
After RTÉ Radio One, Newstalk cemented its status as the second-most listened-to station in the country with 477,000 people tuning in on a daily basis and an all-time high weekly reach of 804,000, up 62,000 from last year.
The podcast peril
So that’s the context but quite apart from the pandemic, the new owners will also have to grapple with a number of structural issues and general trends within the sector.
For one, young listeners are turning off their radios in droves, tuning in to podcasts and the platforms that produce them like Spotify and Apple instead.
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Bauer is well versed in this particular narrative. The media giant — which one industry sourcedescribed as being a major part of the “aristocracy of radio” in the UK and across Europe — owns and operates a host of popular stations like KISS and Kerrang!.
Last year, however, Bauer launched its own podcasting platform, Podplay, in the Swedish and Danish markets. It was described by the company as a “significant investment… within the audio-on-demand market”.
This afternoon, former Today FM chief executive Willie O’Reilly told RTÉ Radio 1 that Bauer will bring to Ireland a “depth of understanding” of these challenges, developed across its networks in the UK and Europe.
“Irish radio has been a bit lacklustre for the last 10 or 15 years,” he said.
We’ve been playing poormouth because conditions have been bad and advertising has been poor. This is a great shot in the arm for the industry.
It’s too early to speculate about what the purchase might mean for content and programming across the Communicorp group of stations, however.
Looking across Bauer’s stable, there’s a clear bias towards music stations. That could be good news for the likes of SpinFM and 98FM and popular music-oriented shows on Today FM such as Ed Smith’s National Anthems.
One source familiar with the industry said the Bauer brand is “led by music and not personalities”, which could lead to format changes.
They’ll look to do what they’ve done elsewhere. They know music radio well and they’ll want the business to grow and whether that means new formats or more content, who knows but they’ll want to see how they can grow it based on the current investment.
While cosmetic changes to radio station formats won’t cause many ripples once the takeover is complete, any major overhaul of an established station’s content or name will likely have to be negotiated and deliberated with the BAI.
Another industry source believes such wholesale changes are unlikely, certainly in the short-term anyway and that Bauer has its “eyes wide open” about what works in Ireland and what doesn’t.
Subject to regulatory approval, the move will also complete Denis O’Brien’s retreat from Irish media altogether after the sale of his stake in Independent News and Media (INM) to Belgian company Mediahuis in 2019.
After 32 years of involvement in Irish radio, his exit marks the end of an era, one that has ultimately cost the businessman.
As Tom Lyons, editor of The Currency put it on RTÉ Radio 1 today, the quoted price tag might be in excess of €100 million but in 2019, Communicorp had debts of €107 million, primarily owed to O’Brien himself.
“So I think that when you know Dennis O’Brien reflects on his experience with Communicorp and that type of return, given a 32-year investment timeline, it doesn’t look like it’s particularly good for him,” Lyons said.
The sale will, he said, “free up a lot of his time” and allow him to focus on his “core business”, namely mobile phone company Digicel and its estimated $5.4 billion debt pile.
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