Talking Lifestyle: Failure is Always an Option

September 12, 2017

 

 

 

There must be a great deal of hand-wringing and angst in the halls of Pyrmont over the fate of Talking Lifestyle in Melbourne and Brisbane.

 

For all the bad luck they’re having with those stations, someone must have broken a whole roomful of mirrors!

 

The transformation from an oldies music format to magazine-style talk was a radical change; something its older audience clearly hasn’t appreciated.

 

Anyone who had even a rudimentary understanding of the way radio audiences behave, knew in advance that there’d be a massive music listener exodus long before a new talk audience could be generated.

 

That is, of course, exactly what has happened.

 

Magic 1278 in Melbourne had been rating around 3 just before the format change and four surveys later is rating 0.4.

 

This new figure translates to just 2000 listeners, half of whom are in the 65+ demographic, and, we know the majority of these older listeners have very little disposable income.

 

That, in itself, creates a sales problem.

 

To put these figures in perspective, ABC Newsradio has around 7000 listeners in Melbourne.

 

In Brisbane, Magic 882 has fared somewhat better, holding on to a 1-percent share, down from its pre-talk rating of a little over 2.

 

Their current survey share also equates to about 2000 listeners in the Brisbane market.

 

Going out to try to sell greatly diminished audience figures on your pre-survey rate means that your cost per thousand listeners (CPM) becomes extremely high and may not be seen as reasonable value by your advertisers.

 

The alternative to maintaining rate integrity is to ‘cut your own throat’, and to all intents and purposes, give the station away, if you want to generate any form of revenue at all.

 

It’s a nasty prospect but it’s what may be facing Talking Lifestyle’s Brisbane and Melbourne sales teams.

 

Now, the real problem facing Macquarie executives is that the ratings just keep falling survey after survey on both these stations, and, there are few, if any, signs that they are attracting that much-needed talk audience to support the Talking Lifestyle format.

 

In a previous analysis, I reasoned that 2UE did not suffer greatly when it changed from news/talk to the magazine format, because the station was simply continuing to cater for a pre-existing talk audience.

 

In fact, when it introduced Talking Lifestyle, 2UE was able to build initially on its figures and that’s happened again in the latest survey.

 

Unfortunately, I feel Macquarie management has misjudged both Melbourne and Brisbane audiences by putting its faith in ‘one size fits all’ programming.

 

Inter-city radio history shows that it doesn’t.

 

I’m concerned that Macquarie Media management may have now boxed itself into a corner.

 

Hopefully, their executives are smart enough to realise - there is no turning the clock back – at least, not to Magic.

 

What’s done is done; the figures show their music audience has already left the building.

 

So, where do they go from here?

 

What are Macquarie’s options?

 

Well, Macquarie’s top guns, Russell Tate and Adam Lang, can stand tall and tough it out, hoping they’ll ultimately prove the naysayers wrong.

 

This would be radio’s equivalent of ‘a man’s gotta do what a man’s gotta do’, but they can wait to see if a talk audience will organically grow in Melbourne and Brisbane, as no doubt they had hoped it would back in February.

 

I’d call this the ‘Fantasyland’ option.

 

Building any audience from a 0.4 base would need the magic of Tinkerbell and Jimmy Cricket combined!

 

It’s almost an impossible task, and, if it is possible, it’s going to take a very long time.

 

Of course, there’s always the possibility that the Macquarie only ever intended to use Melbourne and Brisbane as Talking Lifestyle relay stations, allowing them to cut their operating costs and get a small bump in revenue from 2UE’s advertisers for additional exposure in the other two cities.

 

If that were the case, the current ratings would probably be of little or no concern to them.

 

A second option, based on the premise that they are determined to make a three city ratings’ success of Talking Lifestyle, should be to ask the board to approve at least a couple of hundred thousand dollars for targeted television and print advertising to kick-start some audience growth through an awareness campaign.

 

I see no point in Macquarie continuing to advertise ‘Talking Lifestyle’ programs on 3AW or 4BC.

 

All that’s doing is trying to move some of your own listener base from one side of the table to the other, and, judging from Talking Lifestyle’s figures, listeners don’t seem to be responding too well to that ploy.

 

The next, and, probably the most sensible option open to Macquarie is to undertake extensive audience research, which, if they haven’t, is what they should have done before making any format changes to these markets in the first place.

 

They need to find out what AM listeners in Melbourne and Brisbane would favorably respond to, and, they need to be prepared to walk away from Talking Lifestyle, if that’s what the research tells them.

 

Once they have the information to hand, they should go knocking on the door of someone, who knows what they’re doing in radio programming.

 

Get the likes of Graham Mott or Greg Smith out of retirement and see what sort of format the research tells them would have a reasonable chance of building back an audience for these stations to at least a commercially-viable level.

 

Detailed research has been used to develop radio strategies and formats for nearly half a century and to implement any strategy without proper information is akin to ‘working the high wire without a net’.

 

The final option Macquarie may have to seriously look at is to sell off these stations before they're entirely worthless.

 

Problem is; it may already be too late.

 

Experience out of the U.S. tells us that trashed AM stations cannot be revived.

 

Here in Australia, when stations spiral down to ratings figures like 1.0 or 0.4 in a metro area, that’s a very serious situation, and, it is an extremely difficult position to recover from for an FM station, let alone an AM.

 

At the current ratings figures, despite what the owners may wish, the stations probably have no momentum left, on which to build an audience.

 

Had both the Talking Lifestyle stations ‘bottomed out’ at ratings around 1.5-2, there may have been enough momentum within the stations’ listenership to start organically building back a new, albeit relatively-small talk audience, but it would have taken a long time.

 

However, at 0.4 and 1.0, in Melbourne and Brisbane respectively, there’s virtually no ‘word of mouth’ value left in those stations.

 

External stimuli, like major television and print advertising campaigns, are perhaps, the only weapons they have left to explore.

 

Unfortunately, for the architects of the Talking Lifestyle format, the audience figures have just kept diving unabated survey after survey; there’s been no encouraging news.

 

In 2017, the alternative commercial formats, that are available to AM, are really limited to some form of talk and the types of music that were originally mixed for AM penetration back in the fifties, sixties and seventies.

 

Now that Smooth FM has taken a large share of the oldies market, thanks in no small part to Macquarie’s unselfish gesture of handing its Magic music audiences to them on a platter, the door is all but closed for the obvious AM music formats in both Melbourne and Brisbane.

 

When you get down and look at the US experience, you can clearly see the trend for AM stations, that have lost their way.

 

Many of them have had to be sold off for nickels and dimes to religious groups or Korean, Chinese, Indian and other multi-cultural broadcasters in some of America’s largest cities.

 

Looking back at the $5.5-million paid for 2CH last year, it may be a case of ‘tell ‘em they’re dreaming’ should Macquarie try offloading these Melbourne and Brisbane stations by asking the same sort of money, especially, when you consider that trashed AMers in cities, like Chicago and Boston, are now being sold to ethnic groups for as little $150,000.

 

I think Macquarie’s best bet is to get these stations up and running again, if they possibly can.

 

Thing is; Macquarie’s management team has to realise that these aren’t hobby stations for non-programming executives to play with on a ‘you know what would be a good idea’ basis.

 

I wouldn’t like to think that that’s been going on, but, the results – well, they’re certainly concerning, and, it must be a frightening prospect for executives at Pyrmont not to be able to arrest the ratings slide.

 

The reality is the Macquarie network needs to bring in experts, who really know what they’re doing when it comes to programming AM formats and implementing strategy.

 

It’s certainly not a game for amateurs.

 

Getting formats right may not be ‘rocket science’, but these days, ‘getting it right’ is a science that relies on extensive research, and, accurate judgment, which has been honed from decades of experience in the radio industry.

 

Radio programming should never be a DIY project.

 

Sure, there’s no denying that Magic was a problem for Macquarie.

 

There were inefficiencies, revenue issues and something had to be done to cut costs.

 

Unfortunately, a radical change in programming in Melbourne and Brisbane was always going to be the equivalent of ‘throwing out the baby with the bathwater’.

 

An even hand needed to be applied, but I suspect, no one really knew how.

 

Magic’s pre-talk ratings of 3 in Melbourne and 2 in Brisbane were respectable figures, if a little on the low side, but they gave the network a combined advantage amongst the national advertising agencies, when paired with their major talk stations.

 

However, these latest ratings for the non-Sydney Talking Lifestyle stations may impact Macquarie’s ranking when it comes to agency buys, as Smooth and Nova are now said to be the preferred combination for agencies in Melbourne and Brisbane.

 

Regardless of which path Macquarie chooses to follow in relation to its Melbourne and Brisbane Talking Lifestyle stations, I believe one thing is a given.

 

The network no longer has the luxury of being able to take its eyes off the performances of either 3AW or 4BC for so much as a minute, because they no longer have that additional audience ‘safety net’ in the Melbourne and Brisbane markets.

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