Business Irish

Friday 18 October 2019

Samantha McCaughren: 'RTÉ radio station 2FM turns the dial back to talk radio'

Jennifer Zamparelli will need time in her new role but could be invaluable to 2FM
Jennifer Zamparelli will need time in her new role but could be invaluable to 2FM
Samantha McCaughren

Samantha McCaughren

When RTE radio boss Dan Healy took over at 2FM in 2013, he had a refreshing approach to the task at hand. Coming from the highly-competitive commercial sector, he was tasked with growing audience and - perhaps most importantly - ad revenue at the organisation's youth station. "My job is to turn 2FM into profit. It was hugely profitable in the past and that money was taxpayer money, it wasn't trousered by shareholders," he said.

After shaking up the schedule, going for a younger audience and putting forward a strong case for a bigger slice of the ad market with agencies, Healy improved things for 2FM, which had languished after the sudden death of its stand-out talk show star, Gerry Ryan. The reinvented 2FM turned up the competition on its music-driven commercial rivals, which had been chipping away at 2FM's market share.

But challenges remain for 2FM, as they do for all traditional media at the moment.

Of course, technically RTÉ does not make profits or losses, it makes surpluses and deficits given that it get a large chunk of its funding from the public coffers via the licence fee. In recent years, it has changed how it presents its annual accounts, now showing how much licence fee funding is allocated to each entity. While RTÉ's method is complex, it does give a good indication of commercial revenues at 2FM and its cost to ordinary people who pay the licence fee.

According to RTÉ's numbers, 2FM produced a deficit of €342,000 in 2017, which was down on the loss of €778,000 in the previous year. On the face of it, that looks like a great improvement - but analysis of RTÉ's annual report suggests that station's performance worsened in 2017. Net commercial revenues went from €5.8m in 2018 to €4.4m. Public funding plugged the gap, with licence fee attribution going from just over €5m in 2016 to €6.7m a year later.

Last year was a tough year for radio advertising and despite RTÉ's efforts to return 2FM back to its 'hugely profitable' glory days when the station was a cash cow for the group, the youth station continues to be challenged.

And so last week, it was announced that 2FM would become a more speech-based service. The move will be heavily centred around media star of the moment Jennifer Zamparelli, who was previously co-host of the 2FM morning show Breakfast Republic with Bernard O'Shea and Keith Walsh.

It will be a major challenge for Zamparelli, who is not short of talent, but will need time to establish herself in the new 9am show. If she can get audiences hooked, she will be invaluable to 2FM. But it will take time. It could be argued that RTÉ, with all its resources, has more ability to give a show time to mature than any other broadcaster.

But as director general Dee Forbes has warned, RTÉ's precarious financial position means that it is running out of time.

For many, many years, commentators have speculated that a music-driven youth station would be threatened in an extensive cost-cutting programme which involved cutting services. How different is it really from the likes of Spin 103.8 and FM104?

Healy and others would argue emphatically that it is an essential public service station, delivering sports and programming that no commercial operator would ever fund and provides vital services for younger audiences. Perhaps a shift back to speech radio would copperfasten this argument, marking it out from commercial rivals at a time when its public service stripes might be counted?

A report on protein shakes and snacks made for perfect tabloid fodder last week, with headlines such as 'Ditch the Shakes' running in international press. They were on the back of research from the University of Sydney's Charles Perkins Centre which found that too many protein shakes and supplements snacks could reduce lifespan, affect moods and lead to weight gain.

Dr Samantha Solon-Biet said: "While diets high in protein and low in carbohydrates were shown to be beneficial for reproductive function, they had detrimental effects for health in mid-late life, and also led to a shortened lifespan."

A few years ago, these type of reports might have been a cause of concern for Glanbia shareholders.

The company has been a market leader in the world of protein shakes and when it first got into this market it was the fodder of bulked-up bodybuilders, with the product's industrial-style packaging almost as intimidating as its core user base. But arguably Glanbia's nutrition performance division is ahead of the curve on any potential backlash against protein supplements.

Glanbia has been finding other homes for its whey powder and other nutritional ingredients through acquisitions such as SlimFast and is fine tuning its nutritions business to appeal to wide range of consumers. When whey powder is used, it's in lighter doses.

In February, the company appointed Mary Minnick to the board. She had previously worked with Coca-Cola for 23 years. It also appointed Richard Laube a former executive board member of Nestle, who is also a former CEO of Nestle Nutrition. It is no coincidence that both these board members come from two of the world's most consumer-focused businesses as Glanbia's ambitions for its customer base broaden significantly.

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