Feature: Revenue Fluctuates At Top London Radio Stations
Advertising revenue figures for the three months to September 2003 compiled by Nielsen Media Research reveal a mixed performance for London’s leading commercial radio stations*, with Capital 95.8 FM experiencing some of the sharpest declines.
The station, which was recently knocked off the top spot in terms of share of London listening by Heart 106.2, saw revenue decline by 21% year on year to below £6.2 million the quarter. This coincided with a 13.9% year on year drop in weekly reach to 2.3 million during the same period.
Longer term analysis brings more bad news to Capital 95.8 FM with an alarming 54% decline in revenue, coupled with a 25% drop in weekly reach since the third quarter of 1999**. This has prompted the station to introduce a number of changes to its programming line-up in an attempt to reposition towards its key youth audience (see 95.8 Capital FM Repositions For Youth Audience).
Things are also less than rosy at Capital Gold London, which has seen revenue decline by 47% and weekly reach slide by almost 8% year on year in the three months to September 2003. The bigger picture is bleaker still, with revenue plummeting by 72% and weekly reach dipping by 15% over the last four years.
However, Capital Radio Group claims to be seeing signs of a slight improvement in the UK advertising sector. Chief executive, David Mansfield, says there is greater visibility and positive revenue growth is forecast for the current quarter (see Weak Ad Conditions Push Capital Radio Profits Down 18%).
Meanwhile, Capital’s fiercest rival, Chrysalis-owned Heart 106.2 FM, appears to be performing well and a slight 2% year on year decline in advertising revenue during the third quarter, was off-set by a solid 9.9% increase in weekly reach over the same period. The station recently announced plans to launch a £1 million television advertising campaign to further increase its profile in the London area and now trails Capital 95.8 FM by less than 350,000 listeners (see Heart To Raise Profile With £1 Million TV Campaign).
Heart, which launched back in 1995, has strengthened its position significantly over the last four years. The station has seen revenue increase by almost 10% and weekly reach improve by over 30% since the third quarter of 1999. Heart’s managing director, Steve Parkinson, recently told NewsLine that he has had his eye on being number one in London for the past few years (see NewsLine Interview: Steve Parkinson – Managing Director Heart 106.2).
Chrysalis has been outperforming the radio industry as a whole for some time now and the group recently posted a strong set of financial results for the twelve months to August and said that it has made a strong start to the current financial year (see Chrysalis Profits Surge As Outperformance Continues).
Emap’s dance focused Kiss 100 is on the offensive in London and recently unveiled a £1.8 million marketing campaign targeting 15 to 24 year-old listeners. However, the station has been under pressure recently with revenue declining by 14% year on year during the third quarter. This coincided with a 12.2% year on year dip in weekly reach to just below 1.5 million.
Analysis over a longer four year period reveals a more stable picture for Kiss 100, which has seen advertising revenue hold firm at around the £2 million mark. This looks set to pick up over the coming months following the launch of a dedicated sales team to sell the Kiss, Smash Hits and Kerrang! radio brands nationally for the first time (see New Emap Team To Sell Youth Radio Brands Nationally). The station has seen weekly reach increase by 9% over the last four years suggesting that the Kiss brand is gaining valuable ground in the capital.
Emap’s Magic 105.4 proved slightly less fortunate than its stablemate in the three months to September. The station saw revenue decline by 23% year on year to below the 2 million mark, despite its reliable mix of chart music, news and lifestyle features. However, the tried and tested chart formula continued to prove a hit with listeners and station saw its weekly reach increase by a solid 18% during the same period to over 1.4 million.
The broader picture remained largely unchanged for Magic, which has seen revenue decline by 33% since the third quarter of 1999. The station continues to perform strongly in terms of listening and weekly reach increased by 13% over the same period. Emap has been working to extend the Magic brand over the last few months and the station recently launched on the Freeview platform, alongside The Hits, Q, Kiss, Kerrang! and Smash Hits (see Emap Launches More New Digital Stations On Freeview).
*Stations with weekly reach in excess of 1 million. **It is not possible to carry out five year analysis as RAJAR methodology changed at the start of 1999.
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