HOW RADIO BUSINESSES CAN MONETISE THE DIGITAL AUDIO BOOM BAUER - PowerPoint PPT Presentation

HOW RADIO BUSINESSES CAN MONETISE THE DIGITAL AUDIO BOOM BAUER MEDIA SWEDEN STAFFAN ROSELL, CEO

BAUER MEDIA GROUP 
 200 PRESENT IN 11.000 140 
 2.2 
 15 
 MILLION PEOPLE 
 EMPLOYEES 
 YEARS 
 BLN. EUROS 
 COUNTRIES READ US, LISTEN TO WORLDWIDE 
 OF FAMILY ANNUAL REVENUE 
 US AND USE OUR TRADITION A THIRD OF SALES IN SERVICES. 
 GERMANY WORLDWIDE. PUBLISHING AUDIO OCP NEW BUSINESS

BAUER MEDIA SWEDEN 
 >5 OUR REACH MILLION WEEKLY 
 7 FM RADIO BRANDS REACH 10+ ONLINE RADIO STATIONS THAT’S 60% OF THE 
 POPULATION 25+ PODCASTS Source: Kantar SIFO/ PPM (Universe 8 155 300 people between the age 12-79 years old). Average weekly cover YTD 2019

BAUER MEDIA SWEDEN DIGITAL 
 WHY PODCASTS? • Digital audio consumption is growing rapidly in Sweden: +10% annually . • Digital radio is part of that growth but that product is not strong enough against the digital competition. Streaming of linear radio is not increasing. Music streaming and podcasts is the main challenger to radio. • Music streaming has too high costs due to royalties. • “Web only” stations do not get substantial reach. • Podcasts is the fastest growing audio medium: +20% annually in the Nordics. • The combination of podcasts and ip radio offer additional reach to advertisers on traditional radio. • Podcast listening has its strongest audience amongst 25-34 year olds . Helps to future-proof our audio business as we attract new audiences using digital platforms. Source: Kantar SIFO

SWEDISH PODCAST GROWTH AGE GROUPS 
 42% 37% 34% 28% 27% 24% 23% 16% 12% 7% 16-19 år 20-29 år 30-39 år 40-49 år 50-79 år 2018 2015 Series3 Source: Kantar SIFO, weekly reach

BAUER MEDIA SWEDEN PODCAST BUSINESS TODAY 
 20-30% market share of commercial podcast listening in Sweden today + 150% weekly digital reach from podcasting 60% of our digital audio reach today can’t be reached by traditional commercial radio

BAUER MEDIA SWEDEN DIGITAL TIMELINE 
 TIMELINE 2012 2013 2014 2017 2018 Launch of Launch of our Launch of server Launch of server Launch of cross first podcasts on side advertising side advertising platform ad sale RadioPlay – RadioPlay platform on podcasts . on ip radio . offering - bundling initially a radio, ip radio and platform for podcast sales streaming all our together radio stations and on demand radio content Podcast reach Launch of the exceeded ip radio Swedish podcast reach measurement standard together with public service and Acast More focus on the rapidly growing podcast business

DIGITAL PLATFORM & CONTENT PARTNERS PLATFORM PARTNERS: • Open distribution on all platforms: − Pros: High reach − Cons: Dependency on third party distributors and limited user data • Distribution on proprietary platforms: − Pros: Less dependency on third party distributors, more valuable user data − Cons: Limited reach CONTENT PARTNERS: • In house original content: − Pros: High level of control with long term gains if successful − Cons: High up front cost, high risk of failure • Third party licensed content: − Pros: Low up front cost, low risk of failure − Cons: Low level of control with long term risk exposure to the loss of licenses

DIGITAL SALES SALES PARTNERS VS. IN-HOUSE: • In-house direct sales: − Pros: High level of control, increased margins, long term gains if successful − Cons: Competencies and focus required to reach volumes • Third party sales: − Pros: Using existing third party competencies and short term volumes − Cons: Low level of control and lower margins

PODCAST CREATORS 
 WHAT DO WE OFFER THE PODCAST CREATORS? • Audio production capacity / competence • Sales competence • Marketing capacity • A “social context” • Experience from podcast production • Being part of a platform making it possible to monetise from the podcast – very difficult to sell one podcast

DIGITAL AUDIO OBSTACLES & CHALLENGES GOING FROM THREAT TO OPPORTUNITY: Need to change company culture: • Negative attitude towards digital at first – there was a need to change mindset from threat to opportunity. Need to reduce internal competition: • There was a time when the radio show hosts did not think that it was a good idea to promote podcasts since they saw it as a threat. Need of new competences: • The sales staff initially thought that it was awkward selling digital, working with a new currency.

EXPERIENCES

PODCAST PRODUCTION SUITS RADIO COMPANIES Audio Production Storytelling Spot Sales PODCASTS ARE ESSENTIALLY RADIO SHOWS – WE HAVE THE KNOW HOW Talents Branded Content Entertainment

DIFFERENCES PODCASTS VS RADIO 
 SUGGESTED MINDSET PODCASTS VS RADIO: Radio stations are (mostly) targeted to a broad audience. Podcasts are (mostly) targeted to a niche audience. Both radio stations and podcasts can be monetized through identical products. Audio advertising (ad sales) and promotions (creative sales).

PODCAST CONTENT 
 3 TYPES OF SUCCESSFUL PODCASTS: Influencer podcasts • Focus on profiles, lifestyle and opinions • Mainly funded by editorial sponsorships with ad sale as ad on • Possible to charge high prices for the sponsorships because of the high association value with the influencers Storytelling podcasts • Focus on stories and content like crime, news, history etc • Mainly funded by ad sales with editorial sponsorships as ad on • Lower sponsorship prices because of the lower association value Branded podcasts • Companies come to us with requests of special podcasts • Fully financed

DIGITAL AUDIO SUCCESS FACTORS Competencies: • We learned where we had synergies, and where to find new ways of doing things and develop new competencies. Content AND tech: • Although tech and platforms are important, don’t forget that content is crucial to the digital business. Sales synergies: • Bundling is necessary, since the digital business initially is too small to stand for itself. Cross promotion: • Promotion between linear radio and on demand is essential. Convincing the radio hosts that it is a good idea is crucial.

DIGITAL AUDIO FUTURE CHALLENGES Competition from global giants investing in audio content and tech Audio-books competing with time spent listening Non transparent voice ecosystems (Google, Amazon, Apple, Microsoft) Produce local content in native languages competing with English content The acquisition and retention of talent and competencies required

DIGITAL REVENUE TO GROW RAPIDLY OVER THE NEXT TEN YEARS DIGITAL REVENUE ANALOGUE REVENUE 2019 2020 2021 2022 2023 2024 2025 2026

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