Last week there were some more audio acquisitions with Sony Music grabbing audio production company Somethin’ Else and Bauer adding the few Imagine stations to their portfolio.
On the radio consolidation front there isn’t a lot left to buy up. The majority of UK FM licences are owned by Bauer and Global, with the other two last remaining groups heavily aligned to one, or the other. Bauer provide advertising and services to the Nation Radio stations and Communicorp (other than a single station in Manchester) operate stations under brand licence from Global. In effect, both of these groups operate the local radio bit (local ads and programming) and everything else comes from their partner.
This leaves some Asian and Christian stations (on AM) alongside the last remaining mainstream FM stations - 2 x Jack FMs, Radio Jackie, Star Cambridge, More Radio, Isle of Wight Radio, Fosse, SIBC, KMFM, Radio Essex, Time 107.5. Radio Exe, Q Radio, Sunshine Radio, Silk 106.9 and Dee Radio. Collectively these stations have around 1% of the commercial radio market. Whilst some of these are ‘white space’ areas for completist radio groups - none of them will be big additions.
Indeed the main independent digital stations - the Jack ones, Fun Kids, Boom Radio, Chris Country and Mi-Soul probably has a greater market share than all the small FMers left, combined.
If Communicorp were to end up being taken over by Global and Nation by Bauer, they may save some money by running them more efficiently and not paying out some of the national sales money - but as they sell the national ads already, it would be unlikely to change the national ad share split between Global and Bauer.
News UK seem happy with their national digital stations - talkSPORT/2, talkRADIO, Virgin Radio and Times Radio and their FM stations in Ireland - but the only way for them to grow scale now is to grind it out in the battle for listeners. A corporate strategy shift could leave Wireless as the last remaining prize for the big two radio groups.
Somethin’ Else Sale
Over in podcast land, Sony Music have acquired the content company Somethin’ Else. SE have activities in social, TV and audio. They’re the biggest radio supplier to the BBC (from Rickie, Melvin and Charlie for Radio 1 to Gardeners’ Question Time for Radio 4) and have been strongly into podcasts, partnering with talent for shows like David Tennant Does a Podcast and Ian Wright’s People, creating branded shows for companies like Channel 4 and Netflix as well as commissioned work for outfits like Audible and the BBC.
They have a big audio team - it’s the majority of their 80 staff - and there’s strong relationships across the sector. They’re likely the biggest independent creator of professional audio in the country. Over the past few years they’ve also probably made the biggest effort at growing or partnering to build their own IP library - though a large amount of what they make has still been for other people.
I’ve always been a fan of their strategy - leverage the third party work to build resource that can also be put to work on your own material. But without a big cash injection, that’s always going to be difficult to really scale.
Looking at their accounts, a £400k profit in 2019, an accounting loss in 2020 due to exceptionals, though profits on their regular business activities of around £200k and unstated profits in the latest year up to March 2021, shows a company that’s been building out its capabilities whilst keeping the lights on and trying to move from being reliant on third party revenue to generating their own IP-derived incomes.
However, for companies like Somethin’ Else, it’s tough going - a few lost contracts here and there and some under-performing shows can make things tricky. Even with SE the largest audio operator, it’s not a massive profit generator - especially with such a large staff.
However, in some ways the deal with Sony could be seen as a bit of a reverse take-over. The Somethin’ Else team, with Steve Ackerman soon to be in New York, and Jez Nelson in London, take over all of Sony’s podcast activities, merging them with their own - all under the Sony Music banner. SE’s TV and Social arm, meanwhile, gets merged into Sony Music’s 4th Floor Creative division.
This gives the audio team a great opportunity to use Sony Music’s money and reach to aggressively build out what they started to do at SE. Historically the commission and branded work are useful for cash-flow - will that be such a focus with a new global parent? Why put a decent chunk of your efforts into making things for other people?
As I’ve touched on before, the big money hasn’t really hit UK companies because there isn’t much to buy. Not in the number of companies, but in the number who have scale. There aren’t many outlets who have a range of podcast hits. Now, Somethin’ Else had more than most, but still not that many in the grand scheme of things. What it did have, however, was a large and skilled audio team with a leadership who know the business of making high quality output at scale. That’s not a bad foundation for a (parent) company with podcast ambitions.