Buoyed by the rebrand of its radio business Wireless Group, which owns Virgin Radio, decided to make the station’s return as noisy as possible by achieving an impressive feat of streaming live from a moving train.
Virgin Radio originally broadcast in the UK between 1993 and 2008. Although after a partnership between Virgin Radio International and Wireless Group was sealed at the end of 2014, the decision to relaunch the station was held back until a broadcast license was granted by Ofcom in March 2015.
Now the Wireless Group has positioned Virgin Radio as catering to a market somewhere between the target demographics of BBC Radio 1 and Radio 2. Dubbed “BBC Radio 1.5” – the station will explore a combination of new music and classic tracks to appeal to a wide demographic group of 25-44 year olds.
The broadcaster has modest ambitions in terms of its listenership according to
Scott Taunton, chief operating officer of Wireless Group said: “Our expectation is that our new services would move to break even towards the end of our second year and we believe that to achieve this, we need listening hours of approximately 7.5million collectively across these three new services.”
The Wireless Group was a company bought by UTV in 2005 for £100m, which at the time owned TalkSport and local radio stations in England, Scotland and Wales. The deal marked the first time UTV owned radio stations in Great Britain.
The rebrand from UTV to Wireless came after the sale of its television assets to ITV in a £100m deal. It kept all UK and Irish local stations, as well as its national station TalkSport and its national magazine, Sport. Taunton said for many years the core driver of revenues and profits has been radio, and expressed relief in having a single focus now.
“Having the Wireless Group fully focused on radio makes sense for us as an organisation. In TV, we were never in control of all of the output that we produced. ITV have had some difficulties getting weekend programming working and it is quite frustrating when you are a franchise holder and the product you are delivering isn’t quite resonating with the audiences and driving bigger audiences which in turn drives sales. In radio we are in control of 100 per cent of our output,” added Taunton.
Wireless Group has upped its game this month, launching three radio stations within a matter of weeks (Virgin Radio, Talk Radio and TalkSport 2), bringing its total portfolio of stations to 16, consisting of four national and 12 local channels.
Having four national stations has considerably increased Wireless Group’s sales offering to advertisers, who can now bundle buy across the portfolio. The company is looking to sell the Virgin brand as part of a network, with a package allowing it to offer sponsorship deals across all of its stations enabling advertisers to reach their desired sector of audience.
Sponsorship promotions are a huge growth category for radio, and will be the focus for Wireless as it looks to bolster ad revenue. Currently, sponsorship promotions account for around 20-25 per cent of the total market for Wireless, but that share is as high as half of all market for national stations, so there is still work to be done.
To cut through in a competitive market, the company is also looking to build better creative solutions for brands and integrating brand messages into the product.
“We operate between two very large radio groups (Global and Bauer) and we are the new guy so we need to be more nimble and better at what we do in order to get our slice of the cash. As a business we rely less on spot then perhaps our competitors do, instead focusing on integrating brands seamlessly within the show” said Mills.
Data analytics across the Wireless Group are provided by audience ratings provider Rajar. The listening figures for Virgin Radio will be released on the 3 August, which will then provide the necessary audience insight for advertisers to tailor their content appropriately.
How does Wireless Group intend to get advertisers on board with Virgin Radio without any firm data?
Howard Bareham, commercial development director, at Wireless Group, told The Drum the company has modelled data and audience projections on the numbers and profiles it expects Virgin Radio to reach. If those weekly projected numbers are not reached, it will pay back those advertisers who have got on board early. “So there is a safety net in place for advertisers”, he said.
In terms of advertising interest, Virgin Mobile is the biggest known sponsor so far, which has sponsored Virgin Radio’s weekday breakfast show hosted by Edith Bowman. However, Bareham said while the company is keen to bring new brands on board, it is conscious of over-doing advertising at launch.
“We are not going out to prostitute ourselves, we want to keep the station quite clean. It won’t be ad-free but it has to be good listening for the consumer, because if it is inundated with advertising that turns people off. We are bringing new brands to the market and we want to make sure they can stand on their own content wise, which will bring audiences in for future growth”, said Bareham.
Radio and print media analogy?
When asked by The Drum if radio face similar problems to print, which has struggled to adapt to the disruption caused by digital, given the rise of streaming services? Taunton replied: “Absolutely not!”
He added. “The number of people who listen to radio in this country has remained the same for about 20 years. During this time everyone has talked about the death of radio. There was a real perception that TV was going to be the death of radio, that iPods and streaming of music was going to be the death of radio. But the very fact that we are here launching a new radio service shows the passion that people have to still be exposed not only to new music - which you don’t get necessarily through streaming services - but also they want that interaction with the presenters and to hear about topical information and debate.”
The public is consuming on average 21 hours of radio a week, with 90 per cent of the population listening to radio every week, according figures cited by Taunton.
Yet the radio industry in this country is turning around an average of £600m in media spend, which is a fraction of TV and online revenues. Furthermore, in terms of display advertising, radio accounts for an estimated 7 per cent of this as a whole.
If this venture is to work, Virgin Radio must ensure it has a strong digital strategy that will entice agencies and brands. Taunton conceded the company needs to be alive to the fact that online is getting a bigger share of display advertising and that brands want to have digital advertising as a core part of their overall media mix.
As it stands, only 10 per cent of Wireless Group’s turnover comes from digital inventory, coming from either the website or on apps. Taunton is confident this number will increase, he concluded: “As a broadcast platform whose core business is radio the very fact that we are generating digital revenue not from digital-only assets is an achievement in itself.”