Stuart Taylor marks a radio milestone for Smooth

In the week Smooth becomes the UK's second-largest commercial radio station, Stuart Taylor, chief executive of GMG Radio, tells Harriet Dennys why the future is all about "strong, national entertainment brands"

Stuart Taylor, chief executive, GMG Radio
Stuart Taylor, chief executive, GMG Radio

Anyone watching TV in Wigan or Warrington this week may have spotted some unusual ad breaks starring eight ‘real’ people sharing their "zest for life".

"I love travelling the world on a motorbike," declares Kym Hoffmann in the TV spot that has echoes of the Dove ‘Real Women’ campaign, while "original Shirley Valentine" Linda Weaver, who spent several years living in Greece, reveals she once played the bagpipes on the Orient Express.

Kym, Linda and friends are the "Smooth ambassadors" chosen from more than 1,000 applications from die-hard listeners to front the seven-figure marketing campaign promoting Smooth’s launch as a national radio service, with its five UK regional FM licences subsumed into one, near-uniform entertainment brand.

From this Monday (4 October), Smooth became the UK’s second-largest commercial radio station overnight, targeting the 40-something listener with a playlist of "soulful" classics in an audacious challenge to BBC Radio 2.

The move was prompted by a change in regulation that allowed Smooth to drop local programming in return for providing a national DAB service, and comes following Global Radio’s rebrand of the Heart network as a national service last June and its plans to achieve the same feat with Capital early next year.

Listeners in South Wales may mourn the passing of Global’s Red Dragon FM, but Taylor is adamant that "strong, national entertainment brands" are the future for a 6% medium that famously baffles creative agencies and is, for many, indelibly associated with COI ads for Royal Navy recruitment.

Over a pot of Earl Grey at Kensington’s Royal Garden Hotel, he says: "You have to think about what radio will look like in five years’ time. Digital Britain gave us the opportunity to go national, and we thought why do things six times when you can do it once? Smooth can be listened to by anyone from Truro to Aberdeen, whereas previously it was a patchwork up and down the country."

Local content has not disappeared completely from Smooth’s airtime - the five FM stations will continue to offer regional news, sports news, traffic and travel – and Taylor believes there is still a role for local radio companies, name-checking Pirate FM in Cornwall, Lincs FM in Lincolnshire and Minster FM in York.

Polarising the market

In other words, the move to become a national network made sense for the Smooth network, but not everyone will follow, polarising the market between radio Davids (Kent Messenger Group and UKRD) and Goliaths (Global and GMG).

"Radio is separating into two strategies: one is big, national networks – once you add the DAB coverage – and the other is local," Taylor says. "There is absolutely a role for local radio, but radio operators are having to make up their minds: are we local or are we national?"

The alignment of radio companies’ strategies is part of a "groundswell of optimism", as commercial stations become stronger and steal share from the mighty BBC (up from 41.3% to 43.2% in the Q2 Rajars). GMG’s Real and Smooth were both up in terms of reach and hours in Q2 and Taylor attributes their health to commercial radio being "ahead of the digital curve".

"Radio – and this is where we are in agreement with the BBC – is being listened to by more people than ever before, and this is a good thing in a digital world. We are not worried about being disintermediated, because we can always go on any platform we choose." However, before Mark Thompson gets on the phone with a golfing invitation, he adds: "But let’s not put the bunting out, we are still at war with the BBC and we still compete for listeners tooth and nail, as we always will."

Digital accounted for 24.6% of radio listening in Q2 2010, and GMG – which owns a 37% stake in digital multiplex MXR – is "paddling furiously under the water" to help the industry achieve the target of 50% of all listening via digital by 2013.

Getting there, says Taylor, depends on three things: strengthening the DAB signal so listeners feel comfortable switching over, securing funding from the BBC to fund that coverage and, lastly, installing DAB as standard in all new cars, as Mini and Ford are already progressing.

"We have invested a lot of money in digital, but the issue is that we are paying twice, as we are putting the same stuff out on DAB as on FM. Until that changes, the industry can’t really see a return on that investment, so we have to switch one of them off. We must have a single broadcast platform and it must be free-to-air."

Taylor played a major role in developing online revenue streams for the Guardian and the Observer while at Guardian News & Media, and he is as evangelical about digital listening platforms for GMG Radio: digital terrestrial television (DTT), the internet, mobile apps and tablets.

All GMG’s radio stations are online; apps for Real, Smooth and Rock Radio launched in August; and the company offers iTunes tagging for users listening to GMG’s 12 radio stations on the FM tuner of the iPod Nano.

Digital diversification

However, he maintains the numbers are not significant - yet; instead, digital diversification is valuable in terms of allowing listeners to interact with the brands in a different way. "Commercially, it is a bit like newspaper apps; you have to do [the new digital platforms], but they won’t transform your fortunes."

"Radio has always been good at phone-ins and texting the studios, and now listeners can use their mobile app to get in touch. The crucial thing about mobile and the web is that we are gaining much more data about our listeners, and they can engage with us in a far more personal and immediate way."

Nevertheless, the digital numbers are starting to stack up, with 150,000 downloads of GMG’s combined mobile apps and internet traffic up 30% year on year in Q2 2010. So when the RadioPlayer - a collaboration between the BBC and commercial partners that will make online listening "dead easy" - launches later this year, the commercial opportunities will gather momentum.

On GMG’s web traffic, Taylor says: "[The growth] is extraordinary, because radio is a stable, mature medium, but when we go onto new platforms, we see significant double-digit growth. Our use on the web has gone through the roof because people can see the radio station, rather than just hear it. When we launched our mobile apps we saw a 266% increase in web traffic."

Factor in the increase in listening though Sky, Freeview and Freesat, and the fact that most new devices have a built-in DAB chip - such as the latest Nokia phone - and radio is, as Taylor puts it, looking "bombproof". "We are proofing the future by being everywhere. We are constantly learning about how to communicate with our listeners and what they really want from our applications and our websites."

The last year has been tough for radio - "unfortunately the darkest hour is just before the dawn" - but GMG’s revenue for the six months to September 2010 is up 2% yr/yr, and Taylor believes the recovery will continue, albeit under the spectre of public sector cuts.

"Assuming the economy remains good and advertisers remain as interested in and as committed to radio as they have been, the industry is set fair for more growth," Taylor predicts, adding it is "highly achievable" for radio to achieve its long-held goal of becoming a 7% medium.

GMG Radio has about a 12% share of the commercial radio market, but its deal with Global Radio, which sells its third-party airtime business, gives it greater scale and opens up options for cross-media-owner-deals. For example, when the Galaxy rebrand is complete, Taylor imagines a mutually beneficial Real-Capital sell in the North-East, North-West and Scotland.

So don’t underestimate the player that is celebrating a number of firsts - the first commercial radio station to reach the whole of Wales, as Real launches into Mid- and North Wales from January and, of course, the national launch of Smooth.

"We are the first commercial radio operator to turn a regional station into a single national brand. This is an interesting milestone and there is more to come."

 

Taylor on…

Smooth’s playlist We have one of the widest playlists in radio: a soulful mix ranging from My Sweet Lord by George Harrison to contemporary singers such as Adele and Duffy. Anyone in their 40s or 50s will have a much broader library of music in their heads, and some of the music they will have grown up with, from the 1960s to the 1980s, has stood the test of time. But our listeners love music, so they love new music too.

Radio regulation The regulation around radio was set up in a pre-digital age. Ofcom is working hard to fix that, but we still feel there is one hand behind our back in terms of what we can do. Because regulation is tied up with legislation, it moves very slowly – and yet the digital world, the world of our listeners, is moving very rapidly.

Local radio requirements Localness regulation is still a bone of contention. A degree of localness is important to the listener, but we argue it doesn’t have to come from the area you are broadcasting to – just because you are broadcasting local material to Nottingham, doesn’t mean it has to come from Nottingham. We think it should be up to us to determine what’s relevant to our listeners – they are our listeners, not Ofcom’s.

Global handling GMG’s airtime sales We are very happy with Global – we think they are getting stronger and we think our brands are a good fit. Real is geographically complementary to Heart, and Smooth is demographically complementary to Heart. Heart targets a younger audience than Smooth, and their playlist only overlaps with 17% of our playlist.

 

Hobbies: Golf and cycling – Taylor completed the Etape du Tour, one of the mountain stages of the Tour de France.

Favourite radio stations: Listens to Rock Radio - "there is a bit of an old rocker in all of us" - as well as Smooth, Radio 4, Five Live and Classic FM.

Favourite bands: Queen, REM, Led Zeppelin and the Steve Miller Band. "And there is nothing wrong with a bit of Black Sabbath."

 

CV

March 2009
Chief executive, GMG Radio.

March 2008
Deputy chief executive, GMG Radio.

September 2007
Group commercial director, GMG Radio and managing director of Smooth Radio in London.

2004
Commercial director and general manager, Guardian News & Media.

2000
Advertisement director, Guardian News & Media.

1985 to 1999
Various roles at the Guardian, the Observer, Emap and Argus Specialist Publishing.

Sits on the board of Digital Radio UK and the RadioCentre. Founder and former chair of the Newspaper Marketing Agency.

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