The latest RAJAR ratings data for Q2 2011 demonstrate the continuing strength of the radio medium in recession Britain. Maybe if your TV or mobile subscriptions are having to be pruned, you turn to radio instead. In times of austerity, one of radio’s greatest attributes is that it appears to consumers to be available ‘free’ at the point-of-use.
‘All radio’ listening (1,076m hours per week) is at its highest since 2003. Adult weekly reach is 91.7%. Each listener spends an average 22.6 hours per week with ‘radio.’ These are impressive numbers. In this respect, it is important to remind ourselves that the RAJAR definition of ‘radio’ excludes: • ‘listen again’ consumption of broadcast radio (online catch-ups of ‘The Archers’, for example) • all podcasts • listening to pure online radio stations • listening to online music streaming services or personalised online radio (Last.fm, Spotify, etc).
If these additional ‘radio’ consumption sources could somehow be added to the RAJAR data, it looks likely that, using a wider definition, ‘radio’ would be performing at an all-time high. This is not at all surprising in our time-precious, multi-tasking world. Radio proves the perfect aural accompaniment to online social activities, whereas it is nigh impossible to watch television or read a newspaper at the same time as you browse the internet. Radio is a secondary medium – it never monopolises your time.
Commercial radio has benefited from this uplift in total radio listening. Total hours listened to commercial radio (470m per week) have risen from what is beginning to look like a nadir in early 2010.
During the last two quarters, commercial radio’s adult weekly reach has jumped above the 65% threshold (65.5% in Q2 2011) that had not been breached since 2003.
In absolute terms, commercial radio’s adult weekly reach has almost caught up with the UK population growth experienced since 1999, rising to 34m in Q2 2011, marginally below its all-time high the previous quarter.
The remaining stumbling block for commercial radio is that its average hours consumed per listener remain stubbornly low (13.8 in Q2 2011). As noted previously, young people are spending less time with radio [see my blog]. Commercial radio’s audience is considerably more youth-orientated than BBC radio, which is why the average length of time for all adults listening to commercial radio remains in the doldrums.
With all this good news for the commercial radio sector, you might imagine that its share of total radio listening had started gaining in leaps and bounds at the expense of the BBC. Unfortunately, this is not the case. The BBC has benefited just as much as commercial radio has from the overall increases in radio listening. As a result, everyone’s volumes are ‘up’ and the share of commercial radio versus BBC radio has remained relatively constant. In Q2 2011, commercial radio’s 43.7% share was certainly an improvement on the situation in 2008, when it had looked as if the 40% barrier might be plumbed for the first time.
In fact, the BBC’s sustained strength in radio is becoming increasingly understated as more and more ‘radio’ listening is attributable to ‘listen again’ on-demand usage and podcasts. The BBC dominates the content available on both these platforms, whilst commercial radio’s offerings remain relatively sparse. At present, neither platform is measured within RAJAR. If they were, commercial radio’s share would undoubtedly be diminished further.
At present, this status quo (using RAJAR’s anachronistic definition of ‘radio’ as purely live and broadcast) suits both parties. The BBC does not wish to be seen to be even more dominant than it already is (54.0% of radio listening in Q2 2011). Commercial radio does not wish to be seen to be weaker than it already is (43.7%) in comparison to the BBC.
And who pays for RAJAR? The BBC and commercial radio. So we are stuck with an old fashioned metric that does not measure radio consumption in the 21st century sense of what we now call ‘radio,’ but which keeps both its paymasters happy … particularly as neither the BBC nor commercial radio would currently wish to demonstrate publicly the increasing popularity of online ‘radio’ consumption – which remains the biggest long-term external threat to them both.
I only knew Roger Tate through listening to his programmes on the radio. He was a DJ on Radio Invicta, London’s first soul music radio station, launched in 1970. Invicta was a pirate radio station. Back then, there were no legal radio stations in the UK other than the BBC.
The notion of a campaign for a soul music radio station for London had been a little premature, given that no kind of commercial radio had yet existed in Britain. But that is exactly what Radio Invicta did. As Roger Tate explained on-air in 1974:
“Who are Radio Invicta? You may well be asking. Well, we’re an all-soul music radio station. We’re more of a campaign than a radio station, I suppose. We believe in featuring more good soul music on the radio.”
By 1982, Black Echoes music paper reported that Radio Invicta was attracting 26,000 listeners each weekend for its broadcasts. By 1983, Radio Invicta had collected a petition of 20,000 signatures in support of its campaign for a legal radio licence. There was sufficient space on the FM band for London to have dozens more radio stations. By then, local commercial radio had existed in the UK for a decade. But nobody in power wanted to receive the station’s petition and Invicta’s Mike Strawson commented:
“I have tried to speak to the Home Office about it, but it shuts the door.”
Radio Invicta eventually closed for good on 15 July 1984, the date that the new Telecommunications Act had dramatically increased the penalties for getting caught doing pirate radio to a £2,000 fine and/or three months in jail. By then, Capital Radio had enjoyed its licence as London’s only commercial radio music station for eleven years. Its monopoly reign was still to run for a further six years.
It might have seemed in 1984 that Radio Invicta’s fourteen-year struggle to play soul music on the radio in London had come to absolutely nothing. The Invicta team went their separate ways after the pirate station’s closure. Roger Tate continued his career as a successful technology journalist. After his death in 2001, aged only 47, one of his friends, Trevor Brook, spoke of Tate’s determination to play soul music on the radio in the face of opposition from the government and the radio ‘establishment.’ His eulogy at the funeral of his friend ‘Bob Tomalski’ (Tate’s real name) included these comments:
“The government told the story that there were no frequencies available. Now Bob was not stupid. He had enough technical knowledge to know that this was simply not true. So, either government officials were too dim to realise the truth of the situation … or they were just lying. Nowadays, we have 300 independent transmitters operating in those same wavebands, so you can probably work out which it was. Anyway, in Britain, the result was that any proper public debate about the possible merits of more radio listening choice was sabotaged by this perpetual claim that it was impossible anyway.
So, we had pirates. Other countries which had not liberalised the airwaves had pirates as well, but some of them took the refreshingly realistic approach that no harm was being caused, and they permitted unlicensed operations to continue until they got round to regularising the situation. Ambulances still reached their destinations and no aeroplanes fell out of the sky. Not so in this country though. The enforcement services here were too well funded and the established orthodoxy too well entrenched. That ‘frequency cupboard’ was going to be kept well and truly locked!
Bob had thrown himself into running a regular soul station, Radio Invicta. He built a studio, tore it apart and built a better one. He eventually sectioned off part of the flat as a separate soundproofed area. He built transmitters – and got them working. But Bob was nothing if not multi-skilled, and he excelled in producing the programmes themselves. Using nothing more impressive than an old four track reel to reel tape recorder, Bob would create highly polished jingles and station identifications. ‘Roger Tate, super soul DJ.’ Other stations, both official and unofficial, listened to what Bob and his colleagues did and their ideas were copied or imitated.
Faced with the authorities, Bob was remarkable, because he was absolutely fearless. He was certain they were in the wrong and, given enough time, were going to lose the battle. It was a war of attrition and only perpetual piracy was ever going to bring about change. And he was quite right about that. The government kept winning the battle in the courts but began to lose the moral one. Eventually the law was changed.
Do we have free radio now? In the sense that anybody can decide to start up a new magazine, find the finance and get on with it, no, we don’t have that for radio. The process is bound up with a long winded regulation and approval process involving a statutory body which has had its fingers burnt in the past by the odd bankruptcy and the odd scandal. So they play safe and issue more licences to those who already have stations. The consequence is that originality and creativity get crushed into blandness and mediocrity. My own teenagers constantly flip between stations in the car, but they don’t care enough about any of them to listen indoors. Fresh people don’t get to control stations. Behind boardroom doors, they might think it privately, but in what other industry would the chairman of the largest conglomerate in the market dare to say publicly that even the present regime was too open and, I quote, ‘was out of date and was letting inexperienced players into the market’? That is a disgraceful statement. Where would television, theatre, comedy, the arts, and so on be, if new and, by definition, inexperienced people didn’t get lots of exposure? The industry is stale, complacent and rotten. Bob, there are more battles out there and we needed you here.”
Ten years later, these words are just as pertinent. It is hard to believe that a bunch of enthusiastic soul music fans who wanted to play their favourite music to their mates could have posed such a threat to the established order. But the history of radio broadcasting in the UK has demonstrated repeatedly that ‘the great and the good’ consider the medium far too important to let control fall out of their hands. Their arguments, however ridiculous, were taken completely seriously because they were the establishment.
Peter Baldwin, deputy director of radio at the Independent Broadcasting Authority, said in 1985: “We wouldn’t want to be dealing with two current local stations [in one area]. If it’s Radio Yeovil [operating as the only commercial station in Yeovil], well, that’s okay … But we couldn’t subscribe to competition [for existing local commercial pop music station Swansea Sound] from Radio Swansea, unless it was in Welsh or concentrated on jazz – and there probably wouldn’t be sufficient demand for that kind of service.”
James Gordon (now Lord Gordon), then managing director of Radio Clyde, wrote in The Independent newspaper in 1989: “It has to be asked whether there is really evidence of pent-up demand from listeners for more localised neighbourhood stations … Eight to ten London-wide stations would be enough to cater for most tastes.”
David Mellor MP told the House of Commons in 1984: “The government do not believe that it would be sensible or fair to issue pirate broadcasters with licences to broadcast. To do so, on the basis suggested by the pirate broadcasters, would be progressively to undermine the broadcasting structure that has evolved over the years.”
However, within five years, the government did indeed license a pirate radio station to broadcast in London. Once Invicta had disappeared in 1984, it was superseded by newer, more commercially minded, more entrepreneurial pirate radio stations – JFM, LWR, Horizon – that played black music for Londoners. In 1985, a new pirate station called KISS FM started, quite hesitantly at first. Its reign as a London pirate proved to be much shorter than Invicta’s but, by the time KISS closed in 1988, it was probably already better known than Invicta.
KISS FM went on to win a London radio licence in 1989 and re-launched legally in 1990. It carried with it the debt of a twenty-year history of black music pirate radio in London started by Radio Invicta and then pushed forward by hundreds of DJs who had worked on dozens of London black music stations. KISS FM would never have existed or won its licence without those pirate pioneers.
Sadly, the importance of KISS FM’s licence as the outcome of a twenty-year campaign seemed to be quickly forgotten by its owners and shareholders. The lure of big bucks quickly replaced pirate ideology during a period of history when ‘get rich quick’ was peddled by government as the legitimate prevailing economic philosophy. KISS FM lost the plot rapidly and soon became no more than a money-making machine for a faceless multimedia corporation.
Right now, there remains as big a gap between pirate radio and the licensed radio broadcasters as existed twenty years ago or even forty years ago. London’s supposedly ‘black music’ stations, KISS FM and Choice FM, now sound too much of the time like parodies of what they could be. Whereas, pirate radio in London still sounds remarkably alive, unconventional and creative. More importantly, only the pirates play the ‘tunes’ that many of us like to hear.
The issue of how black music was ignored by legal radio in London, and then betrayed by newly licensed black music radio stations, is on my mind because of my new book ‘KISS FM: From Radical Radio To Big Business.’ It documents a small part of the history of black music pirate radio in London, and it charts the transformation of KISS FM from a rag tag group of black music fanatics into a corporate horror story. I was on the inside of that metamorphosis and it was an experience that, even twenty years later, remains a sad and terrible time to recall.
In 1974, Roger Tate had wanted more black music to be heard on the radio in London. Ostensibly, that objective has been achieved. But the black music I hear played on white-owned stations in London (there is no black-owned station) is a kind of vanilla K-Tel ‘black music’ that is inoffensive and unchallenging.
If Croydon is the dubstep capital of the world, how come there is no FM radio station playing dubstep in Croydon, or even in London? How come I never hear reggae on the radio when London is one of the world cities for reggae? How come I had to turn to speech station BBC Radio Four to hear anything about the death of Gil Scott-Heron in May? Why is that Jean Adebambo’s suicide went completely unremarked by radio two years ago?
Legitimate radio in London seems just as scared of contemporary cutting-edge black music as it was in the 1970s when Roger Tate was trying to fill the gaping hole with Radio Invicta. Nothing has really changed. Except now there exists the internet to fill that gaping hole. And FM pirate radio in London continues to satisfy demands from an audience that legitimate radio has demonstrated time and time again that it doesn’t give a shit about. Is it any surprise that young people are deserting broadcast radio?
Forty years ago, I listened to Roger Tate and London pirates like Radio Invicta because they played the music I wanted to hear. Forty years later, I find it absolutely ridiculous that I am still listening to a new generation of London pirates because they still play the music I want to hear. As Trevor Brook suggested at Roger’s funeral, our radio system is so consumed by “blandness and mediocrity” that “the industry is stale, complacent and rotten.”
Roger Tate R.I.P. You may be gone, but you and your campaign at Radio Invicta are as necessary as ever today. Sad but true.
As soon as the coalition government came to power in May 2010, it implemented Conservative Party policy to make substantial cutbacks to the amount of public money spent on government marketing campaigns. Commercial radio was hit the hardest because, more than any other medium, it had become increasingly dependent upon government expenditure on advertising airtime.
In 2010, before the general election, I had predicted [see my blog] that the impact of these cutbacks would prove “disastrous” for the commercial radio sector. I had calculated that a 50% cut in total public expenditure on commercial radio advertising would lose the sector £44m to £48m in revenues, equivalent to 9% of total sector revenues.
Interviewed by BBC Radio Four, I was asked if my scenario was not overstating the potential impact on commercial radio. I argued that it was not – the amount spent by the government’s Central Office of Information [COI] on commercial radio dwarfed all other radio advertisers by miles. By February 2010, government expenditure on radio commercials was greater than that of the second, third, fourth and fifth largest advertisers combined.
The Radio Advertising Bureau had put a brave face on the losses from its biggest advertiser. In June 2010, it said: “We are optimistic that radio’s strengths will be recognised as COI budgets come under ever greater scrutiny.” In September 2010, it said it was “working with a wide range of advertisers to bridge the gap” left by public expenditure cuts.
However, the latest data from Nielsen show that the impact upon commercial radio has been even greater than I had forecast. In the year to February 2011, COI expenditure on radio advertising was down 70% year-on-year, much greater than the 50% cut that had been anticipated from previous Conservative Party pronouncements. In total, commercial radio lost £44m per annum from all public expenditure on radio, compared to the previous year.
The worse news was that, as the graph above shows, the fall in COI expenditure has become steeper in recent months. As a result, the impact on the sector in 2011 is likely to be just as severe as it was in 2010. The hard fact is that this is not a temporary cyclical loss for commercial radio – these revenues will not rebound for as long as the coalition government remains in power.
The graph shows clearly that no individual or group of advertisers have been able to substitute entirely for the losses caused by government cutbacks, although some gains were made from clients in 2010 [see my blog]. No commercial advertiser spends more than £10m per annum on radio, whereas the COI had spent £58m in the year to March 2010 (but was down to £17m by February 2011). This is simply too big a gap to be filled by a few individual commercial advertisers.
Media Week reported recently that “the more optimistic media owners are hoping the COI’s former spend [on radio] can be clawed back by year’s end.” It is hard to see how that can be realistically achieved, given the scale of the £44m per annum loss from public sources to date, particularly in the face of declining consumer disposable incomes.
In an attempt to offer a positive outlook, Media Week suggested: “But the situation is set to improve. From April  onwards, there will no longer be any comparable year-on-year COI spend left in the system, as purdah [sic] kicked in 2010.”
Perhaps what Media Week was trying to say was that COI expenditure will level off this year once the savage cuts have been in situ for more than a year. Yes, inevitably, but that does not in any way help an industry that has just witnessed £44m per annum of revenues disappear into thin air. Remember that total commercial radio revenues in 2010 were only £523m, already down from £641m in 2004. Now a further huge 8% chunk of income has gone.
Another commentator recently noted optimistically: “The [radio] medium took £523 million in revenue in 2010, up 3.3% year-on-year, and 2011 looks like another positive year of growth, not the inevitable management of decline forecast by some.”
However, once inflation is taken into account, 2010 commercial radio revenues fell in real terms [see my blog]. Far from a decline being “forecast by some,” the industry’s own data demonstrate that decline has been occurring since 2004 in real terms, long before the recent cuts to government expenditure. Adjusted for inflation, commercial radio revenues in 2010 were lower than they had been in 1998.
This is not the time for spreading unfounded optimism based on ignorance of the facts. If anything, the impact of government cuts has proven to be more than “disastrous” and will necessitate even more restructuring of the commercial radio sector in the short term. This could include the closure of further unprofitable digital ventures and of sector support agencies whose subscriptions will begin to appear increasingly discretionary when the axe has to fall somewhere.
It is good to know that radio is still an extremely popular medium in the UK, something borne out by the latest radio audience metrics published by industry body RAJAR for Q1 2011. However, in its determination to make every quarter’s results newsworthy, RAJAR has a track record of bending the truth to achieve press headlines [see my blog May 2010]. This latest quarter was no exception.
According to the RAJAR headline: • “Total radio listening hours reach 1,058 million per week – new record.”^
RAJAR explained: • “The total number of radio listening hours broke all previous records to reach 1,058 hours per week …”^
Fantastic news! Except that this is not at all true. RAJAR’s own historical data tell a different story: • 1,088 million hours per week in Q2 2001 • 1,092 million hours per week in Q3 2001 • 1,092 million hours per week in Q4 2001 • 1,090 million hours per week in Q1 2002 • 1,072 million hours per week in Q4 2002 • 1,094 million hours per week in Q1 2003 • 1,066 million hours per week in Q3 2003 • 1,076 million hours per week in Q4 2003 • 1,086 million hours per week in Q1 2004 • 1,072 million hours per week in Q2 2004 • 1,068 million hours per week in Q3 2004 • 1,059 million hours per week in Q1 2005 • 1,068 million hours per week in Q2 2005 • 1,072 million hours per week in Q3 2005 • 1,060 million hours per week in Q4 2005 • 1,063 million hours per week in Q3 2006
During sixteen quarters between 2001 and 2006, total hours listened to radio were greater than they were last quarter. “New record?” No. “Broke all records”? Er, no.
The reality is that total radio listening has not yet returned to the level it had achieved in 2001. Except that, ten years ago, the UK adult population was 48.1 million, whereas now it is 51.6 million. So the population has increased by 7% over the last decade. Yet total UK radio listening is still less than it was then.
Most statisticians I know would refer to that as a like-for-like 7%+ decline in total hours listened to radio. However, to RAJAR, it is evidently a “new record” that “broke all previous records.”
Why does any of this matter? Because radio broadcasters have been progressively losing usage over most of the last decade. Initially, it was 15 to 24 year olds that were spending less time with radio. Increasingly, it is also 25 to 34 year olds. For a decade, the UK radio industry has desperately needed a coherent strategy to reverse this loss of listening. The decline in young adult listening to broadcast radio does not merely impact the NOW. If these consumers do not find anything in their youth worth listening to on the radio, they will grow old without the radio habit. Their radio listening patterns NOW are likely to influence radio listening for the next half-century.
This is why RAJAR’s continuing efforts to achieve yet another headline in the Daily Mail proclaiming “Radio listening at an all time high” are ultimately redundant. Those headlines do not impact the reality of the data collected from tens of thousands of radio listeners every month. Those data show incontrovertibly that listening is in significant long-term decline amongst younger demographics. And radio will be in mortal danger if it does not re-invent itself for the next generation.
You only have to listen to any pirate radio station in London to understand that the gulf between what young people are actually listening to and what the old fogies who run UK radio are giving them has never been wider. Chris Moyles is as passé as Dave Lee Travis was twenty years ago.
So, yes, RAJAR’s fibs and the resulting Daily Mail headline will be another opportunity for champagne corks to pop in radio boardrooms across the land. But if radio doesn’t start making itself exciting and relevant to young people, broadcast radio’s future role will be relegated to a soundtrack in old people’s homes. Complacency such as that propagated by RAJAR will only make many radio businesses redundant in the long run.
^ in a footnote this small, the RAJAR press release admits the caveat “since new methodology was introduced in Q2, 2007.”
House of Lords Select Committee on Communications Inquiry on Governance & Regulation Of The BBC [excerpt] 22 March 2011 @ 1515
Baroness Deech: Listening to you, I am a bit puzzled about why you are so keen to hold back the BBC. Can’t Virgin Media and the local commercial radio stations stand on their own two feet? Why have they got to hold back the BBC?
Mr Andrew Harrison [chief executive officer, RadioCentre]: I would not characterise it at all as wanting to hold back the BBC; I would characterise it as wanting a level playing field for the commercial sector to compete. The truth is that, in radio, the BBC is hardly held back. It has 55% national market share, it has the vast majority of national FM spectrum and it has a huge raft of local radio stations, so it is hardly held back. We seek the opportunity to build our own commercial businesses, entrepreneurially and innovatively, without facing the elephant in the room that, every time we try to do something new, there is a BBC service that pops up to squash it before it has time to be established.
Mr Andrew Barron [chief operating officer, Virgin Media]: With great respect, I think we are in slightly different places. I would argue that Virgin Media is one of the companies pushing the BBC forward in many instances.
[This is an uncorrected transcript of evidence taken in public and webcast on www.parliamentlive.tv. Any public use of, or reference to, the contents should make clear that neither Members nor witnesses have had the opportunity to correct the record.]
Some of Digital Britain’s radio recommendations were unworkable. However, the notion has remained that FM and AM analogue transmitters of the UK’s national radio stations will be switched off once digital radio listening passes the 50% threshold. This was never practical. It was a ‘threat’ propagated by government to the public in the hope of forcing them into buying more DAB radios, instilling fear that they would otherwise lose their favourite stations. The threat failed.
The problem with any threat is that, once it has failed, it remains difficult for the protagonist to climb down. So the threat continues to be propagated. For what reason now? So as not to make those who issued the threat look completely foolish. The need to save face has locked the government apparatus into a fiction that BBC and commercial radio will willingly throw away half their audiences by closing their FM/AM transmitters. This was never true.
‘Universal’ reception of the BBC’s core public services is mandatory. It would prove impossible to levy the BBC Licence Fee on every UK household if (almost) the entire population could not receive the BBC services for which they pay.
“12. Making the UK Public Services widely available (1) The BBC must do all that is reasonably practicable to ensure that viewers, listeners and other users (as the case may be) are able to access the UK Public Services that are intended for them, or elements of their content, in a range of convenient and cost effective ways which are available or might become available in the future.”
Would the BBC switch off analogue transmissions of its national networks once more than 50% of listening was attributed to digital platforms? Of course not. You would be a complete fool to slash your radio audience by half, particularly as such an action would contradict the BBC Charter & Agreement.
Could the government insist that the BBC switched off the analogue transmissions of its national networks? Only if it wanted a revolution on its hands. It would be difficult to think of a policy more likely to lose it the next General Election.
The revenues of commercial radio are directly related to the sector’s volume of listening. If commercial radio switched off its analogue transmitters once digital listening had passed the 50% threshold, at a stroke it would risk losing 50% of its volume of listening and, subsequently, 50% of its revenues. Would it do that? No, of course not.
RadioCentre’s self-interested ‘policy’ has been to argue that the BBC national networks should turn off their analogue transmitters first, years in advance of commercial radio stations. Radio Chicken, anyone? Naturally, RadioCentre failed to mention that the outcome of this proposal would be likely to significantly increase its member commercial radio stations’ analogue audiences and revenues. There is nothing quite like trying to persuade your competitor to commit joint suicide … first.
Additionally, the value of commercial radio companies is vested in the scarcity of their analogue FM/AM licences. Because no new analogue licences are awarded by the regulator, each existing licence has a significant intrinsic value, even if the business using it is not profitable. The same is not true of DAB licences. Anybody can apply to Ofcom for a DAB licence by filling in a form and paying a relatively small fee.
An example of the value of analogue licences to commercial radio owners is Absolute Radio. In 2008, Times of India paid £53.2m for Virgin Radio, comprising one national AM licence and one London FM licence. Having re-launched the station as Absolute Radio, the company lost £4.3m in 2009, but its balance sheet still retains considerable value because of the scarcity of its two analogue radio licences. If Absolute Radio were put up for sale, someone would be interested in buying it because of that scarcity.
By contrast, when DAB commercial radio services such as Zee Radio, Islam Radio, Muslim Radio, Flaunt and Eurolatina no longer wanted their digital radio licences in 2010, there was no queue of potential buyers. They simply handed their licences back to Ofcom because those licences were not scarce.
This is why it would prove financially suicidal for commercial radio to switch off its FM/AM transmitters. It would have to write down the value of those scarce analogue licences to zero in its balance sheets which, at a stroke, would negate almost the entire value of the licence owners. Not a good company strategy.
So, when headlines such as ‘Absolute Radio mulls AM switch-off’ appear in the trade press, they should be read with a bucket of salt. The headline might as well say: ’Absolute Radio mulls destruction of shareholder value.’
And, when yet another DAB proponent appears on radio or television to persuade you, in all seriousness, that the UK’s most listened to national radio services – both BBC and commercial – will imminently be switching off their AM/FM transmitters, please feel justified to laugh in their face.
This is about as likely to happen as Tesco putting security guards at their store entrances to tell the public to shop elsewhere because they want fewer customers.
It emerged last week that, after the Norwegian state classical music station ‘Alltid Klassisk’ abandoned FM transmission on 1 July 2009 for DAB transmission, its audience contracted from 25,000 to 10,000 per day.
Now, consider that only 20% of listening to BBC Radio 2 is via digital platforms (in Q1 2010), lower than the 24% average for all stations [see Sep 2010 blog]. If that average ever managed to reach the 50% threshold, it might leave 60% of Radio 2’s audience still listening via analogue. That’s 8m listeners that Radio 2 would have to turn its back on as a result of FM switch-off. Time for the BBC to start erecting barricades outside Broadcasting House.
House of Commons Culture, Media & Sport Committee 30 March 2011 @ 1006 [excerpt] Committee Room 15
Jeremy Hunt MP, Secretary of State for Culture, Olympics, Media & Sport
Q:What are your expectations now with regard to digital radio switchover?
A:Well, I think the future is digital. I think the future is DAB. But I think the digital radio industry needs to do a lot more work to boost the penetration of DAB and to carry the public with it. And I think that it has not been nearly as successful as that, as the TV industry has been, in persuading the public of the benefits of digital switchover. And that’s why, at the moment, the industry is having to bear the costs of running two systems [analogue and DAB] in parallel. I very much hope that they won’t have to do that. We want to do everything we can to help the industry migrate smoothly, but we would like it to be user-led, so we have said that we are not going to have an arbitrary 2015 deadline. We will make a decision in due course as to whether we can have switchover in 2015, but we want the radio industry to step up to the plate in making sure there are better products and services available, and that consumers really can see the benefit of DAB.
Q:Would your expectation be that the financial commitment of the BBC to expand the radio coverage in rural areas will remain the same or might that be affected by their review of spending?
A:Well, the BBC are committed in the [Licence Fee] Agreement I did to national availability of national DAB channels. There is still a discussion to be had about the funding of local DAB channels, which is an additional cost. And I am closely involved in discussions with the radio industry, and very keen to resolve this as soon as possible because I think it’s a very, very important next step.
In February 2011, some hysterical reports appeared concerning the White Paperpublished by the government in Norway on DAB radio. Some of these would have had us believe that Norway had made a definite commitment to switch off all FM radio in 2017. This was not true [as documented by diymedia and Media Network]. In fact, the government had set out several criteria that will have to be met before digital switchover can be sanctioned. The Norwegian criteria are similar to those adopted in the UK which, as commented here previously, are unlikely ever to be fulfilled, making switchover an ‘unreality.’
To make the situation perfectly clear, in the words of Norway’s media regulator:
“The following three conditions are absolute and must be fulfilled regardless of when switch-off takes place:
1. Digital coverage for the NRK’s radio services correspond to that of NRK P1 on FM 2. The multiplex that carries commercial national services (Riksblokka) must cover at least 90 per cent of the population 3. The digital radio offer must represent added value to the listeners
The above three conditions, as well as the two following conditions, must be fulfilled by 1 January 2015 for the switch-off to take place in January 2017:
4. Affordable and technically satisfactory solutions for in-car radio reception must be available 5. At least 50 per cent of daily radio-listeners employ digital platforms, exclusively or in combination with FM-radio
Provided the absolute criteria (1-3) are fulfilled in 2015, switch-off may nevertheless take place in 2019, even if criteria 4 and 5 are not fulfilled.”
Furthermore, far from FM being switched off completely, the regulator said:
“The Report proposes that the majority of local radio stations should have the right to continue transmitting in FM beyond 2017. The Ministry of Culture will determine in 2015 what categories of local radio may maintain the right to do so.”
The milestones anticipated by the government are:
“2011: The Ministry of Culture decides on the possible prolongation of commercial radio-licenses in the FM-network until 2017 (or 2019).
2013: The Ministry of Culture determines: · Whether the coverage obligation for NRK radio-services shall be attached to the DAB-multiplex alone, or whether it may be fulfilled by employing other technologies in addition to DAB · What is to be understood by the criterion ‘affordable and technically satisfactory solutions for in-car reception.’
2015: The Ministry of Culture decides whether the following conditions are met: · The digital coverage of NRK-radio corresponds to that of NRK P1 in FM · The population coverage of the national, commercial multiplex >90 per cent · The Digital radio-offer represents added value to the public · Availability of affordable and technically satisfactory in-car solutions · Usage of digital platforms >50 % of daily radio-listeners.
2017: Possible FM switch-off 2019: Prospective postponed final switch-off of FM 2011: Decision on possible prolongation of FM-licences 2013: Definition of coverage obligations NRK & in-car solutions 2015: Assessment whether ASO-criteria are met 2017: Possible FM-switch off 2019: Possible postponed FM switch-off.”
In parliament, the Progress Party’s Ib Thomsen challenged the Minister of Culture, Anniken Huitfeldt:
“The closure of FM radio worries the Progress Party, it worries IKT Norway and it worries consumers. To close FM radio, we need to scrap 15 to 20 million radio receivers, including even DAB radios that are not of the most modern type [DAB rather than DAB+]. This will have major consequences for consumers and for the environment.”
Thomsen asked the Minister of Culture: “What will the closure of FM radio cost the country? We know that it will cost consumers billions of krone, but what will it cost the state and society?”
The Minister rejected categorically the notion that consumers would have to pay one billion krone, or that 15 to 20 million radios would have to be scrapped. She responded:
“It is very clear in the White Paper that the digitalisation of radio will be consumer focused. It is typical of the Progress Party to spread fear about something that has already been addressed. These figures are not correct. There are, according to numbers that I have been quoted, 3.5 to 7 million radio receivers in Norway. These devices will not be thrown out. People can buy adapters that will provide access to digital radio.”
“It is the simulcasting [on FM and DAB] that is the most expensive. When we published the White Paper on the digitalisation of radio, P4 responded immediately that it wanted to launch more stations. There will be more competition and more channels. It went very well when we introduced digital television. It is going to go just as well with radio.”
Ib Thomsen was unsatisfied with the Minister’s response. He replied:
“The Progress Party is not the only one that is worried. IKT Norway and the rest of the world is concerned too. Adapters will cost consumers 1,200 krone. It is a pity that the Minister is not taking into account that Norway is locking itself into a technology that has already been scrapped by the European Union.”
The Minister responded:
“The European Commissioner has stated that radio must be at the forefront of the digital revolution and has highlighted DAB. It is not true that no other countries are digitising radio. There is no discussion in Europe as to whether to introduce DAB or not, only discussion about the date for digitalisation. Neither is it correct to say that adapters will cost 1,000 krone. Prices will go down.”
To date, sales figures for DAB radios in Norway have been even less impressive than in the UK. In 2010, only 81,000 DAB radios were sold out of a total of 833,000 radio receivers. The cumulative total of DAB receivers sold is 336,000, although these are DAB rather than DAB+ and will have to be replaced if Norway changes to the latter system.
Year: number of DAB radios sold in Norway
IKT Norway has long argued that DAB radio is not appropriate as the digital platform to replace FM radio. After the White Paper was published, its secretary general, Per Morten Hoff, commented:
“Norway becomes the first country in the world to decide to shut down its FM radio networks. This is a bold decision at a time when technological developments are more uncertain than ever. Closing FM radio gives you no route back. NRK has spent several hundred million krone building its DAB network, ‘a killer’, and its owner, the Norwegian state, and the Culture Minister have concluded that there is no going back. The market has said so far that it is not adopting DAB, so forcing them has been the only way forward.”
There would appear to be a number of reasons why DAB is being pursued so doggedly in Norway:
· Norway was one of the first countries to invest in a DAB radio transmission system in 1995
· Jørn Jensen, since 2009 the president of World DMB (the organisation lobbying for the replacement of FM with DAB), is the chief adviser to NRK on platform distribution
· NRK, the state broadcaster, signed DAB transmission contracts with Norkring that do not expire until 2020, so the government cannot pull the plug on DAB without exposing an embarrassing waste of public funds
Some of the issues facing the successful implementation of DAB in Norway would appear to be:
· Only 80 DAB transmitters are currently in service, although at least 650 will be necessary (TV in VHF Band III uses 2,635 transmitters and transponders)
· Achievement of 99.5% DAB coverage (to match FM coverage) will prove very expensive, and Norkring has only guaranteed 90% in its current transmission contract with NRK. The government will be forced to fund the difference
· The government White Paper noted that current FM coverage is 99.5%, although NRK FM coverage is 99.95%, a more expensive penetration for DAB transmission to match
· The high costs of simulcasting about which Arild Hellgren, former NRK director of technology, commented: “Compared to what happened when we digitised TV, we will have a very long period of parallel distribution on FM and DAB. It is very expensive” · The two national commercial stations will be granted automatic licence renewals ONLY IF they support the DAB platform and pay for DAB coverage up to 90%
· Local stations’ transfer to the DAB platform will be determined by the government in 2015 in a ‘Big Brother’-style elimination contest
So who was the bright spark in the Ministry of Culture who decided to headline its press release: “FM switch-off in 2017 – the radio medium will be digital”?
By 2017, that person could have a large quantity of egg on their face.
Marketing magazine’s annual survey of the top 100 advertisers announced some good news:
“More than three-quarters of the UK’s top 100 advertisers increased their adspend in 2010, defying predictions that the year would mark a steep decline in marketing budgets. By channel, the biggest year-on-year increase was in TV advertising, with a 17% rise, according to Nielsen; print, outdoor and cinema spend also rose.”
So, good news for radio too? Marketing continued: “The only medium in which spending fell was radio, falling 6% on 2009 levels.” Oh dear.
Why was radio so badly hit in 2010? Partly because of commercial radio’s greater dependency than other media on public expenditure which, as Marketing explained, was cut drastically in 2010:
“The government’s commitment to slashing public-sector spending was reflected in the 50% year-on-year decline in the COI’s [Central Office of Information] adspend to £105.4m.”
And partly because the volume of commercial radio listening has been in decline for the last decade, and sector revenues are a product of listening.
Encouragingly, 2010 witnessed a 3% year-on-year increase in the total volume of commercial radio listening, the first increase since 2001. However, total radio listening (commercial + BBC) had increased in 2010 by 2%, making commercial radio’s gain only marginally greater than the total market.
As for the other issue of slashed public expenditure on commercial radio, although 2010’s loss of £24m seemed bad [see my blog], 2011 could prove to be worse. On Friday, the Cabinet Office recommended the scrapping of the 60-year old Central Office of Information:
“As part of the changes, the COI will be replaced with a new body, the Government Communications Centre, with a wider remit and responsibility for keeping a tight reign on advertising and marketing spend. … The report does not say how much the government might cut from its £1bn annual communications bill, or how much of the £540m spent on everything from TV, radio and posters to sponsorship might be reduced.”
This would prove a further financial blow for commercial radio, since COI expenditure on radio of £30m in 2010 still contributed as much as 11% to the sector’s national advertising revenues, even after having been slashed by the coalition government.
Although Marketing’s (Nielsen) data reported that radio’s national revenues fell by 6% in 2010, the commercial radio sector’s own numbers showed a 6% increase. This discrepancy is puzzling. Nevertheless, analysis of the industry’s dataset tells us:
TOTAL UK COMMERCIAL RADIO REVENUES: 2010: £522.6m (£505.5m in 2009)
Up 3% in absolute terms
First year-on-year increase since 2007
Down 1% at constant prices [RPI]
UK COMMERCIAL RADIO NATIONAL REVENUES: 2010: £276.2m (£259.4m in 2009)
Up 6% in absolute terms
First year-on-year increase since 2007
Up 2% at constant prices [RPI]
UK COMMERCIAL RADIO LOCAL REVENUES: 2010: £144.3m (£144.7m in 2009)
Down less than 1% in absolute terms
Lowest value in absolute terms since 2001
Down 5% at constant prices [RPI]
Lowest value at constant prices since 1992
This apparent collapse in local advertising revenues would appear to mask a dichotomy that is taking place in the radio sales market. For those stations in small groups or independently owned that rely almost entirely on local revenues, the market for local advertising has already rebounded from the recession. The closure of many local newspapers, the cuts to local council freesheets and the closure of many local radio station offices owned by large radio groups have left these genuinely local stations in an opportune position to hoover up more local advertisers.
On the other hand, local radio stations that have been transformed recently by Global Radio into ‘national brands’ (Heart, Capital) seem to be abandoning their interest in local advertising markets. If I owned a local business in Eastbourne, I would like to know how effective an advertisement would be on the local Heart FM station in my immediate area of Eastbourne & Hastings. This is no longer possible because Global Radio has done away with RAJAR audience data for many local markets. The smallest market that RAJAR can tell me about now is “Sussex” comprising 1.3m adults – much too big a coverage area for an advert for my one local shop in Eastbourne.
This new strategy seems inconsistent with the Heart FM licence for Eastbourne & Hastings which Ofcom insists is “A LOCALLY ORIENTED CONTEMPORARY AND CHART MUSIC AND INFORMATION STATION…” So, please will Ofcom explain how Heart FM can be a “locally orientated” station if, as a potential advertiser in Eastbourne, I can no longer determine how many people would hear an advertisement broadcast on the station?
RAJAR explained the changes to its data: “Campaigns transferred from Q3 2010 to Q4 2010 will contain the old station definitions and they will be visible Q4, however the data will not be accurate. Please re-plan the campaign using the new regional definitions available in Q4.” In plain English – audience data for local stations have been removed and merged into regional groupings from last quarter.
So, it would seem that the ‘nationalisation’ of the content on Global Radio’s Heart and Capital brands has been accompanied by ‘nationalisation’ of advertising sales. If ever there seemed like a wrong time to be pursuing national advertisers for commercial radio, surely it must be now [see my blog]. In real terms, national advertisers spent no more on commercial radio in 2010 than they had in 1997. However, in 1997, there were only 200 commercial radio stations, whereas now there are 300.
I am reminded of a meeting in 2007, just weeks before EMAP was sold, with its chief executive when I asked him if he felt there was anything that the group’s radio division should have done differently. Local advertisers, he told me. We neglected local advertisers in pursuit of the larger amounts we could earn from potential national advertisers. But we turned our backs on previously loyal local advertisers who quickly lost interest in our stations without regular contact from our salespersons.
Here is a lesson to be learnt from the UK’s second largest commercial radio group. Don’t look your local cash cow in the mouth.
VPRT, the German trade association for commercial media, has welcomed the government’s decision not to include clauses in its new Telecommunications Bill that would have switched off FM radio broadcasts in 2015. In its 9 March 2011 press release, VPRT stated: “FM is and remains the basis for the development of new radio services.”
VPRT described the earlier federal plan to switch off FM radio on 31 December 2015 as a “completely unrealistic statutory requirement” which would have made redundant 300 million FM radio receivers.
Germany is making a second attempt to launch DAB radio with ten national services scheduled to start in August 2011. US broadcaster Radio Disney had been an initial applicant for one of the national commercial DAB radio channels, but subsequently withdrew its proposal in January 2011. Some of the other commercial stations had been offered a financial subsidy by DAB chip manufacturer Frontier Silicon in December 2010 [see my blog].
However, as one German publication commented: “So far, consumer interest in digital radio has been extremely low.” Pit Klein from the magazine ‘Sat+Kabel’ explained: “We have estimated from the regional media authorities that only about 500,000 DAB radio devices are in circulation.” Christoph de Leuw from the magazine ‘Audio Video Foto Bild’ said: “In some areas, [DAB radio] receives only two or three stations. No one buys a new radio receiver for €100 to receive two stations … People are satisfied with FM quality. The real, practical benefits to consumers [of DAB] are yet to be determined.”
Experts in Germany agree that the future of radio is digital. “Whether the digitalisation of radio will take place on DAB is questionable,” said Sven Hansen, editor of the computer magazine ‘c’t’.
Who was UK commercial radio’s biggest advertiser in 2010? British Gas? No, it was second. Autoglass? No, it came third. Volkswagen? No, it was fourth. Unilever? No, it came fifth.
Radio’s biggest advertiser in 2010 was the government (in the guise of the Orwellian-sounding Central Office of Information [COI]). Not only was the government the biggest advertiser on radio, but it was far and away the biggest advertiser by miles. The government’s £30m expenditure on radio in 2010 exceeded the sum total of British Gas, Autoglass, Volkswagen and Unilever.
After the coalition government was formed in May 2010, it immediately executed Conservative Party strategy to cut public expenditure on commercial advertising by 50%. Before the election, I had predicted that this Conservative policy would have a disastrous impact on commercial radio revenues [see my May 2010 blog]. It did.
Although the coalition had been in power for little more than seven months by year-end, COI expenditure on radio was quickly slashed from £50m in 2009 to £30m in 2010. Additional (non-COI) public expenditure cuts reduced radio’s revenues by a further £4m in 2010. This £24m total was a significant loss to commercial radio, and represented 9% of national revenues, or 5% of total revenues.
Did radio suffer greater cuts from the COI than other media? Seemingly not. Radio’s share of COI ad spend was 27% in 2010, slightly higher than the previous year. The reason the impact was so great for radio was the sector’s much greater dependency upon public money than competing media (television, the press, billboards).
In June 2010, the Radio Advertising Bureau had said bravely: “We are optimistic that radio’s strengths will be recognised as COI budgets come under ever greater scrutiny.” Evidently, radio strength’s were not.
By September 2010, the Radio Advertising Bureau said that it was “working with a wide range of advertisers to bridge the gap” left by public expenditure cuts. What was the outcome? There were some impressive gains for radio from other clients in 2010:
* British Gas increased its expenditure on radio from £5m to £9m year-on-year (particularly impressive since it had only spent £2m on radio in 2007);
* Autoglass increased its expenditure on radio from £5m to £9m year-on-year (50% of its ad budget);
* Gocompare.com increased its expenditure on radio from £1m to £5m year-on-year;
* More Than increased its expenditure on radio from £2m to £4m year-on-year;
* Mars increased its expenditure on radio from £1m to £4m year-on-year;
* Asda multiplied its expenditure on radio eight-fold to £3m year-on-year.
The problem was that even these gains combined did not match the loss from government spending cuts. The huge challenge the commercial radio industry still faces is its history of increasing dependency upon one very large advertiser.
Additionally, there were other clients that either spent less in 2010, or might in 2011:
* Blockbuster Entertainment was radio’s sixth biggest advertiser in 2010 (spending 50% of its ad budget on radio), but filed for bankruptcy in the US in September 2010;
* Sky TV reduced its expenditure on radio to £4m in 2010 from £7m the previous year;
* BT reduced its expenditure on radio to £4m in 2010 from £7m the previous year;
* Proctor & Gamble reduced its expenditure on radio to £4m in 2010 from £6m the previous year;
* Specsavers had been the second biggest spender on radio in 2009, spending £8m, but dropped out of the top 20 in 2010.
However, these single-digit losses were dwarfed by the £24m reduction in public expenditure on radio advertising in 2010.
In terms of product sectors, motor vehicles rebounded from the recession and led the field in 2010 with £90m expenditure on radio. The finance sector similarly rebounded to £52m in 2010. On the other hand, the property sector did not rebound and its spending on radio of £8m in 2010 was down 42% compared to two years earlier. Likewise, online retailers spent only £2m on radio in 2010, down 55% from two years earlier.
Public expenditure on radio fell from the number one product sector in 2007, 2008 and 2009 to fourth place in 2010. Inevitably, given that the coalition was only elected mid-2010, the cuts to public expenditure are likely to have as much impact on radio in 2011 as they had in 2010. Neither is there any prospect of these cuts being restored under the present government.
Total radio sector revenues for 2010 are likely to be up slightly year-on-year [see my Oct 2010 blog]. This is not something to shout about, given that Q2 and Q3 in 2009 had produced commercial radio’s lowest recorded revenues this millennium. However, it is an achievement in an environment where expenditure by commercial radio’s biggest advertising client fell off a cliff (as the graphs above demonstrate visually).
Unfortunately, in the longer term, unless commercial radio succeeds in improving its performance with listeners, both in absolute terms and in comparison with BBC radio, it cannot expect its revenues to return to levels recorded a decade ago. By 2009, UK commercial radio revenues had fallen by 32% since 2000 in real terms. Radio’s revenues from national advertisers had fallen by 47% during that period. That will be an almost impossible expanse of ground to regain.
In his perceptive commentary on last quarter’s RAJAR radio audience figures, IPSOS’ research manager Andy Haylett noted:
“18.5 million adults are DAB owners, yet only an estimated 12.6 million are confirmed listeners. What are the other 6 million doing with their DAB sets? Further investigation shows that there are only 7.4 million listeners to digital-only stations, of which under half (3.3m) comes from DAB listening. This suggests that around three quarters of all DAB listeners are tuning to stations readily available on a traditional analogue transistor.”
This reiterates a point I have made previously in this blog [Feb 2009, Aug 2009, Feb 2010]. After more than a decade, it is a sad fact of life that digital radio stations on broadcast platforms have not succeeded in setting listeners’ hearts on fire:
* Only 4.6% of all radio listening is to digital radio stations
* 18.2% of all radio listening via digital platforms is to digital radio stations
* 7.4m adults per week listen to digital radio stations (14.3% of adults)
* 3.3m adults per week listen to digital radio stations via DAB (6.4% of adults).
Of course, the corollary is that digital platforms are being used predominantly for listening to radio stations that are already available to consumers on the analogue platform:
* 95.4% of all radio listening is to analogue radio stations
* 81.8% of all radio listening via digital platforms is to analogue radio stations
* 44.2m adults per week do NOT listen to digital radio stations (85.7% of adults).
These figures might have been understandable during the early years of DAB radio. But now? After more than a decade? Planet Rock launched in 1999; the BBC digital stations in 2002. Compared to the influence that digital terrestrial television stations have had in the UK over a shorter period, digital radio stations have had very little impact on radio listening patterns to date.
The overwhelming use of digital platforms to listen to analogue radio stations begs the question: so what is the point of DAB? There was never anything wrong with FM radio anyway, and there is no proposed alternate use for FM spectrum, so why is the government insisting that consumers and the radio industry both spend huge sums of money to enable the public to listen (on DAB) to exactly what is available already (on FM/AM)?
In the graph above, the listening to digital radio stations is shown in red (analogue stations in grey). It remains tiny. Despite BBC Radio 6 Music’s uplift after last year’s consumer campaign, it still languishes as the UK’s 18th most listened to national radio station. Fortunately for the BBC, the funding for its digital radio stations continues to come (for now) from the public purse.
For commercial radio, the funding for digital radio stations has to come from deep pockets. Not one digital radio station has yet made an operating profit. History is littered with commercial digital radio stations that used to be on the national DAB platform: ITN News, Talkmoney, The Storm, PrimeTime Radio, 3C, Capital Disney, Core, Virgin Radio Groove, Oneword, Capital Life, TheJazz, Fun Radio, Virgin Radio Xtreme and Panjab Radio.
Some of these digital radio stations had offered fantastic content unavailable elsewhere (PrimeTime, OneWord). Other digital stations had had very little thought put into their creation. Former GWR staffer Steve Orchard boasted that his company’s strategy for Planet Rock had been conceived in The Lamb Inn, Marlborough: “Going into a pub with Ralph Bernard, my boss, listening to the classic rock jukebox and coming out, several pints later, with Planet Rock sketched out on the back of an envelope.”
GCap Media sold Planet Rock in 2008 to an ‘outsider’ and it has been the commercial radio industry’s most listened to digital radio station since 2009. It speaks volumes that the entire UK commercial radio sector’s efforts at digital radio stations over more than a decade have been trumped by a music enthusiast with no previous radio sector experience.
However excellent it is, Planet Rock alone cannot save the DAB platform from continuing consumer disinterest. It would require a dozen stations of this calibre to create a portfolio of sufficient interest to stir consumers. Worse, for those consumers who have tried DAB and given up due to the platform’s other issues (poor reception, lack of mobility, lo-fi audio, expensive hardware), even a dozen stations might not tempt them back.
It is understandable, therefore, that Planet Rock’s owner, Malcolm Bluemel, should be frustrated with the rest of the radio industry for not following in his wake. This month, he said:
“I’ve only been in the radio industry about two and a half years now and I’ve never actually come across an industry that has such a collection of self-interest in discussing this matter [digital switchover]. I’m quite amazed at this need for certainty around the future of business. I came from an era where, to get a decent radio [station], I had to stick my AM transistor under the bedclothes and listen to Kid Jensen from Luxembourg at night. Well, now we’ve got people saying ‘Well, I want to know this, I want to know that, I want to know that my radio stations will be this, and I can have that, and I want it all, and I want it all now.’
It’s fairly obvious to me that, as an industry, we should be all sticking together. Digital is here. It’s not a question of a switchover date. Digital is out there. It’s being listened to. There’s 1.1 million people listening to 6 Music, there’s 827,000 people listening to Planet Rock on digital radio NOW. So why don’t we just accept the fact that digital is here and all get together and say ‘Right, how are we going to make this work for the industry?’ For all those people with their self-interest and their stupid press statements over ‘20 years [until digital switchover]’ or whatever it is (how ridiculous is that?), and just get together and have a consensus of opinion about how we are best going to do this, but collectively for the radio industry, and stop fighting amongst ourselves because of our own petty little grievances.”
Planet Rock’s 827,000 weekly reach last quarter is a remarkable achievement. Compare this to the dismal performances of some analogue commercial radio stations. Absolute Radio, with the benefit of a national AM licence and a London FM licence, reached only 1,375,000 adults per week. Xfm reached 938,000 adults nationally with the benefit of a London FM licence. Choice FM reached 734,000 adults nationally with the benefit of a London FM licence.
By comparison, Planet Rock has performed miracles, given that the only broadcast platform it has access to is DAB. As Bluemel identified, paradoxically, the thing that is stopping him from turning Planet Rock into the profitable radio station that it should be is the very industry in which he is working. Whilst (post-GCap Media) Planet Rock is doing all the right things for all the right reasons, the rest of the industry, where DAB is concerned, continues to do all the wrong things for all the wrong reasons.
Unfortunately, the barriers to Planet Rock’s commercial success are the outcomes of the sad history of the DAB platform:
* The commercial radio sector initially invested in DAB to control the platform, not to create successful digital radio stations
* The BBC decided to launch minority interest digital radio stations that would not cannibalise its existing national analogue networks
* The commercial DAB multiplex owners (aka the largest commercial radio groups) did not want upstart independents creating successful digital radio stations on their DAB platform
* The industry’s ‘build it and they will come’ strategy for DAB failed because consumers are driven by content, not by platforms
* If you wanted to persuade consumers to buy relatively expensive DAB radios, you should have inspired them with new content rather than have threatened them with FM switch-off
* Radio listeners are loyal and do not like losing access to content they once enjoyed (the closure of digital radio stations)
* DAB radio reception, for many, is still not as robust as FM or AM.
The best solution for Planet Rock would be a national analogue licence. Or, at least, a London FM licence. However, the radio regulatory system we have in the UK militates against that possibility. Why? Because politicians, civil servants and regulators have ensured that those who already own (what were once) commercial radio ‘licences to print money’ get to keep them, seemingly in perpetuity.
It is the existing radio industry itself which is limiting Planet Rock’s opportunities for greater success. We do not enjoy an openly competitive radio market that allows new entrants such as Bluemel to shake up our stagnant radio industry with new, exciting ideas. Instead, ‘outsiders’ have to stand around on the sidelines while the owners of stations such as Absolute Radio, Xfm and Choice FM continue to run them into the ground. So why don’t they just sell them?
Sell their stations? Of course not! When you are part of a commercial radio oligopoly, why would you want to encourage an insurgent, who might actually understand how to create a successful radio station, to camp right on your analogue doorstep? Not only might he show you up, but he might even steal listeners from your other stations. Instead, the current philosophy is to let ‘outsiders’ bleed to death financially on the DAB platform, while the incumbents continue to divide up (what is left of) the spoils of FM/AM radio between them.
So we listeners get the (analogue) mediocrity they think we deserve.
[blog headline adapted from Andy Haylett’s of IPSOS]