“It’s an absolute disgrace, Joe”
RTE vs The Cash Machine
We all know it’s been hard times out in Montrose recently, between the public spat with Ryan Tubridy over The Late Late Show, the Oireachtas hearings that gave a startling view of barter accounts and expensive flip flops, and of course, the catastrophic drop in licence fee revenue that followed…
We’re still waiting for the other flip flop to drop too, as more reports are due, including one with forensic accounting, and more detailed reporting on the showbiz genius of “Toy Show, The Musical”
Along with that, the Director General Kevin Bakhurst is expected to reveal his grand plan to reshape the public broadcaster and regain control of costs as it faces a future where questions remain over its funding model.
So, given all of that, perhaps it’s not surprising that what seems to have caught RTE’s attention, is the Bauer Cash Machine.
Liveline - Talk to Joe
RTE Radio 1 devoted quite a bit of time, between Liveline and Drivetime, to chasing down the maths behind the Cash Machine last week, with questions about how much it makes, where the money goes, and of course, how close to the legal definition of gambling it is.
Liveline featured a classic caller, complete with every cliché, including, “it’s an absolute disgrace, Joe”, as in his view, the parents of Ireland are listening to Ian Dempsey and picking up their phones to gamble, in front of their children. I’m not clear how Ian is to blame, or indeed, how the children know that Daddy is sending a text to the Cash Machine, but by God, it’s a disgrace.
If you’ve been living under a rock, which doesn’t get radio signals from Today FM, Newstalk, 98FM, Spin 1038, Spin South West, Red FM, or iRadio, then it is possible you’re not familiar with the Cash Machine.
Possible, but unlikely.
What is The Cash Machine?
The Cash Machine runs across all of the Bauer Media Audio Ireland stations, on air, the disclaimer says “The Go Loud Network”.
What that means in practice, is that straight after the top of hour news and weather, the presenter on each of the stations reads a live script, which encourages people to enter, by texting at a cost of €2.50 per entry, for their chance to win a daily cash amount.
The script is clear and includes various disclaimers, you have 5 rings to answer, you must give the correct amount and the lines close at a certain point in the day. There’s no mystery about the amount, the presenter gives it out in euro and cent a couple of times during the script.
Then around 4pm, a call is made to one of the numbers that entered, if that person answers in time and gives the correct amount, they win the cash.
It’s almost tediously simple. And it’s sort of a version of a game that ran on Dublin and Cork stations for years, called The Cashcall. That involved calls to landlines, and you weren’t texting in on a premium rate number, but they were simpler times.
So, what’s the big deal?
Well, The Cash Machine is in some ways a victim of its own success. They’ve been cranking up the winners, particularly in the run up to Christmas, with several six figure sums being handed out, including to one winner who picked up €200,000.
Bauer say they’ve given away 5 million in 2023, and that is an insane amount of prize money, for a radio station competition. That is also why the spotlight is now firmly on the competition and an element of either moral panic, or jealousy has crept into the dialogue.
So, how did we get here?
For as long as DJ’s have worn slightly too open shirts, there have been radio competitions, in fact, a lot of the initial commercial radio success came from the brash giveaways on air, which made them stand out against more polite and mannerly public sector broadcasters.
Back in Dublin’s pirate days there were competitions like the Big Kahuna, or Don’t Say Hello, which waved wedges of Punts in the face of eager listeners.
For years, 98FM and FM104 did battle on bus sides and billboards, each one trying to outdo the other with ever more lavish competitions, but as times got tougher and competition became more corporate, the wildest excesses of radio competitions got pulled back.
Pre Cash Machine, you were more likely to win a modest cash prize, which would be funded by a commercial client, or possibly a trip to a semi exotic location, courtesy of a brand doing a launch.
Dee Ford and NTR
In terms of Bauer Media, their long time UK Group Managing Director Dee Ford, was famous for many things, but two in particular.
The first was her unrelenting enthusiasm for the Cash for Kids Charity which ran on every Bauer UK station across the year and raised millions for charity. The second was her equally unrelenting passion for what is known as NTR, or Non Traditional Revenue.
When I was Content Director at Magic, we were encouraged, in the strongest terms, to start running premium rate competitions, that would drive new revenue for the business through text based competitions.
That drive for NTR is probably what led to the Cash Machine launching in Ireland in the first place, and it’s potentially a very profitable endeavour.
Let’s do the Maths
Doing some quick and dirty maths, at €2.50 per play, you would need to have at least 2 million entries in a year to give away 5 million euro.
However, in practice, it’s probably more like 3 million entries, when you factor in the cost of the text line operator and whatever margin Bauer require the game to make for the business.
If you decided to start running a competition on the basis that you could get 3 million premium rate entries in a year, I think most people would say you were insane.
And that’s where Bauer’s scale comes into play.
So, the combined weekly reach of Today FM (959,000), Newstalk (822,000), 98FM (182,000), Spin 1038 (267,000), Spin South West (150,000), Red FM (177,000), iRadio (338,000) comes to a fairly impressive 2.89 Million people
Now, there is certainly some duplication in there, and I’m not a certified statistician, but if you’re looking to generate 3 million entries in a year, that’s just about 60,000 entries per week.
And if you have almost 3 million listeners a week, then, you really only need 2% of your audience to play each week.
Gambling?
Clearly there are questions about who in your audience is playing, and whether the competition appeals strongly to those who struggle with gambling issues. But the advertising landscape is saturated with ads for bookies, for the National Lottery and their 4 or more recurring games, and I don’t see that the Cash Machine is objectively worse than that?
There is a new Gambling Regulation Commission and more legislation on the way, but as Bauer made clear to Liveline, they do cap the level of entries and offer the opportunity to opt out of messaging.
Liveline also spoke to various regulatory agencies and no one seemed inclined to bite on it.
Joe was reduced to huffing and puffing about “why is there a cap on entries, if it’s not a gambling promotion”, which seemed to be a slightly pointless argument. Surely, it’s a good thing if Bauer are capping entries?
As a Competitor
Putting my competitor hat on, the Cash Machine is deeply annoying. It’s just not possible to compete against it at the scale that Bauer are able to run it. The maths just doesn’t work, unless you have a vast audience that you can reach through promotional airtime on a consistent basis.
The interesting question is whether it has had any material effect on listenership. Given that Red FM and iRadio are new entrants to the Bauer family, we probably haven’t seen any impact for those stations as yet.
Newstalk has been on a good run, but it’s hard to say that is driven by the cash machine, and both 98FM and Spin 1038 have had poor books, in Q3 23 at least, as FM104 regained the crown in its hit music station battle with Spin.
The one station that does seem to have benefited is Today FM, at a national level, they’ve powered ahead of RTE 2FM and are consistently delivering big results. It may well be that a consistent promotion is helping to drive audience for them.
The other benefit I see from the Cash Machine, is that the funds generated have allowed for consistent marketing for Bauer brands, I’ve seen Today FM, 98FM, Spin 1038 and Newstalk all out on advertising, including billboards for the music stations, which really brings us back to where we started.
Competitions drive commercial radio, and I guess public sector radio still doesn’t much like it.
This has been the 29th official edition of the RAudio Newsletter.
Apart from writing newsletters, I also consult to radio stations and podcasts, so if you have a question, or a project you need help on, drop me an email – liamathompson@gmail.com
I’m also attending RadioDays in Munich, so let me know if you’re going and we can catch up.
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