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.]
When UK companies that had once anticipated they were poised to make a mint out of ‘DAB radio’ realise that things are not going the way they had wanted, they lash out. That seems to be what happened yesterday. ‘Shoot the messenger’ appeared to be the digital radio industry’s reflex response when backed against a wall of facts that tell an unpalatable story.
At the Westminster Media Forum conference on digital radio, a graph of DAB/digital radio receiver sales was displayed in a presentation by The Guardian’s Jack Schofield (see below):
The graph clearly showed that 2010 unit sales were down on 2009, and that 2009 unit sales were down on 2008. This data was collected by GfK.
Anthony Sethill, founder and chief executive of Frontier Silicon, took exception to this graph’s narrative of declining consumer interest in DAB radio receivers. He commented:
“My company supplies the chipsets that drive about 80% of digital radios on the market today. So, I think the panel today, with the exception of Andrew [Harrison, RadioCentre chief executive] is a wonderful example of how the minority seem to take the stage and voice the negativity and things. And, if we were to re-run Jack’s presentation again, put some facts in the correct order, and the correct facts, I think we would have a very different read. You know, it’s very difficult, when you have people like Jack that have a national platform in terms of a national newspaper, to voice these views.
So we’ll start with the GfK data. Now, GfK is actually a retail audit and, over the years, has been used by the consumer electronics and the retail trade in the UK to measure the sales of consumer electronic devices. In the last few years, GfK has been dying. The reason it has been dying is that it relies on the data – sales out data – from national retailers such as Dixons and John Lewis and Tesco and so on. Last year, Dixons pulled the plug on supplying data to GfK. That meant the largest retailer in the UK, which accounts for 25% of all sales, actually stopped giving them data. To carry on selling that data, [GfK] then had to formulate panels and most people in the industry know that, statistically, it’s not valid and that, basically, it’s falling apart. Now, you’ve quoted GfK [DAB/digital radio receiver] sales falling and I’ve given you the reasons why that data is not accurate. […]
This is a practical example of discrediting the data, which a number of people use to bash DAB. So this is one small example of how you’re misinterpreting and you’re misleading people. I don’t know if you understand what GfK is, or what it has done, or why it has fallen apart but, if you do, then that’s really poor. And if you don’t, before you quote it, you should learn the facts.”
The graph to which Sethill was referring was created by me and published in this blog last weekend (Jack Schofield had asked before the conference if he could use it in his presentation). I had first published these DAB/digital radio receiver sales data in a blog in January 2011, in which I wrote:
“1.94m digital radios were sold in 2010, compared to 1.99m in 2009 and 2.08m in 2008. Increase? No. Growth? No. Over 2m in 2010? No.”
In March 2011, these same sales figures were reprinted in The Telegraph newspaper, which wrote that “new figures showed that sales of digital radio equipment actually fell last year.”
It should be noted: • The sales data in my graph were distributed by Digital Radio UK, the radio industry organisation marketing DAB radio in the UK • Digital Radio UK purchases these data concerning DAB/digital radio receiver sales from GfK • Digital Radio UK has regularly quoted these GfK data in its press releases (most recently on 23 Dec 2010 and 21 Dec 2010) and in its newsletters • Digital Radio UK has never publicly challenged the validity of the GfK sales data that it is distributing and using in its marketing campaigns • Until now, these data on DAB/digital radio receiver sales have been widely reported in the public domain without challenge from the wider digital radio sector.
So what is eating Frontier Silicon? It seemed wholly inappropriate for Anthony Sethill to beat up panellist Jack Schofield in public for using the digital radio industry’s OWN DATA in his presentation. If Frontier Silicon has an issue with the digital radio industry’s sales data, it should take that up with Digital Radio UK, which purchased the data from GfK and distributed them.
Perhaps the real issue is that the rewards from DAB radio have evidently still not materialised for the digital radio industry. By year-end 2009, Frontier Silicon Limited had an accumulated loss of £28m. In financial year 2009, it generated an operating loss of £536,000 on turnover of £22m. Its shareholders include Digital One (owned by Arqiva) and Imagination Technologies (which owns Pure Digital). Imagination owns 9.3% of Frontier Silicon, a stake that it wrote down by £3.4m in 2008, and then finally wrote down by a further £3.6m in 2010. As Imagination’s accounts explained:
“Due to the lower resulting valuation of the business and the impact of Frontier’s capital structure, the Group’s investment [in Frontier Silicon] has been revalued to £nil.”
I guess it must be tough for Frontier Silicon to see a shareholder value its business at “£nil.” That is no reason for its unprovoked attack on Jack Schofield’s presentation which had merely used the industry’s own data.
……………. I contacted GfK for its response to the comments from Frontier Silicon. Its response was (in full):
Date: 6th April 2011
GfK Retail and Technology UK response:
GfK Retail and Technology UK currently track over 100 individual technology product categories and partner with major UK multiple retailers within every single audited channel they report on, to complement this research and to ensure GfK cover the overall market they also have a representative sample of independent retailers working with them. This means GfK are receiving weekly data from over 24,000 individual stores within the UK. The majority of these retailers deliver weekly EPOS data on their complete sales and this allows GfK to report to a detailed level on the performance of all the leading technology categories. If faced with a retailer who is not willing to participate GfK employ a widely used global research methodology to ensure they are representing the overall market.
When challenged on the GfK reported performance of the DAB market Commercial Director Anthony Norman commented “the overall technology markets have all come under increasing pressure in the last 12 months, the austerity measures announced and now being implemented by the coalition government have had a major impact on consumer confidence which has in turn impacted on retail sales of technology areas”. Norman continued in specific reference to the DAB market “the reported data by GfK is based on over 70% live reported sales by retailers, rather than focussing on the downturn of this market it would be more beneficial to put the whole picture in perspective. The overall technology market has experienced only 4 months of growth in the last 33 months. The average decline in this area is 6%, for DAB the market in 2010 declined by only 2%. Given the overall sector performance this is something that should be recognised. As a business GfK are committed to delivering actionable insight to the industries they operate within”
The GfK Group
The GfK Group offers the fundamental knowledge that industry, retailers, services companies and the media need to make market decisions. It offers a comprehensive range of information and consultancy services in the three business sectors of Custom Research, Retail and Technology and Media. The no. 4 market research organization worldwide operates in more than 100 countries and employs over 10,000 staff. In 2009, the GfK Group’s sales amounted to EUR 1.16 billion. For further information visit www.gfkrt.com or www.gfkrt.com/uk
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.
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]
“Ofcom’s primary concern in radio is to look after the interests of the listeners.” Peter Davies, Ofcom, January 2007.
When something is broken, you have to fix it. Thinking about fixing it, planning to fix it, talking about fixing it, convening meetings about fixing it – none of these will actually fix it. You just have to fix it.
DAB radio reception has been broken since the broadcast platform was introduced in the 1990s. Transmitter powers are inadequate and there are insufficient transmitters, particularly in urban areas. These issues have still not been fixed.
For most of the last decade, the radio industry and the regulator were in denial that DAB reception was rubbish. Initially, it proved easy to blame the consumer. The advice to early DAB adopters was that they should install a DAB aerial on their roof and attach it to their new DAB radio because their home might be constructed of the wrong type of materials (bricks?). What? All this just to listen to Radio 7 in the bath?
Eventually, sufficient people had bought DAB radios that they started to compare experiences. People in the same street, the same family, the same house all found that they had similar problems with DAB reception.
In 2004, a technical paper entitled ‘Indoor Reception Of DAB’ by Simon Mason of NTL concluded that “a field strength of 71 dbμV/m is required in order to provide good indoor DAB reception to handheld devices.” Mason found that, in London, “the worse [sic] reception areas were, in every case, on the ground and first floors” of large buildings.
In 2006, at the TechCon conference, Ofcom’s Mark Thomas explained: “The Radio Authority had no data of how [DAB] receivers performed, so it had to make some very broad-brush assumptions. More recently, now that we have a lot of receivers in the market and we can see how they behave, an industry group has been working under Ofcom’s chairmanship for the last two years to look into the issue in more detail and come up with some modus operandi for new transmitter sites.”
At the same conference, EMAP’s Grae Allen advocated: “In the future, as I envisage it, we will see a need to put more and more [DAB transmitter] sites inside the cities in areas where we actually need significant power where people are living and working.”
Did any of these ‘fixes’ happen? Only in London, and only for one of the four DAB multiplexes that serve the capital. Did Ofcom fix this? No. Did the radio industry pay for it? No. It was BT that paid for new DAB transmitters in London to improve the reception of its new mobile television service, Movio, which soon failed commercially. The DAB improvements were left in place.
As Mark Thomas had explained, it was the regulator (the Radio Authority, now Ofcom) that had set the technical criteria for DAB transmitters in the UK. So you might imagine that it would naturally be the regulator that would take responsibility to fix inadequate DAB reception. You would be wrong.
In 2010, Ofcom launched a consultation about the terms of its contract renewals for DAB multiplex licences. You might think that this would be the ideal opportunity for Ofcom to insist that licensees must improve the coverage of DAB transmitters so that consumers would receive satisfactory reception. You would be wrong.
Ofcom indirectly acknowledged that the current quality of DAB reception was the result of inadequate criteria having been implemented. It stated:
“Digital One’s [national DAB] network and all other existing DAB networks have been planned to a signal strength of 58 dBμV/m. This is what we currently call ‘outdoor’, or mobile, coverage.”
“A signal strength of 65 dBμV/m is what we currently call ‘indoor’, or portable, coverage. The network of 30 additional transmitters that Digital One implemented in order to facilitate the now-defunct BT Movio mobile television service were planned in order to deliver coverage in certain areas at a much higher signal strength of 82 dBμV/m.”
Evidently, BT had understood that you cannot hope to persuade consumers to spend their money on new equipment if they find that reception is not good enough to use it. Unfortunately, nobody in the radio sector took the hint. So what did Ofcom decide to do about this sorry state of affairs that has ruined so many listeners’ usage of DAB since 1999? Nothing at all. It said:
“In general, the coverage which applicants for radio multiplex licences propose to deliver has been seen as a commercial decision for the licensees, with neither Ofcom nor its predecessor regulator the Radio Authority seeking to impose a minimum coverage obligation that an applicant’s proposals must meet …” [emphasis added]
This decision was made, despite Ofcom having already convened meetings of an “ad-hoc working group” that had included the BBC, the government and the DAB multiplex licensees. The outcome was:
“This group came to a provisional agreement that the field strengths currently used for determining coverage are no longer appropriate given operators’ experience after several years of operation. The group provisionally agreed that a revised set of appropriate field strengths should be used from now on …”
This group’s new recommended signal strengths for adequate DAB reception were:
* 58 dBμV/m for outdoor reception;
* 69 dBμV/m for indoor reception;
* 77 dBμV/m for indoor reception in dense urban areas.
So it would make perfect sense for Ofcom to insist upon these agreed new field strengths in the new contracts for DAB multiplexes that will run for a further 12 years. But to Ofcom, it did not. Ofcom simply said to multiplex owners: just carry on as if nothing is at all wrong with DAB reception. In Ofcom’s words:
“We are not proposing to set any additional coverage obligations that Digital One must meet as part of the [national DAB multiplex] licence renewal process” and “we will not set any additional coverage obligations for local [DAB] radio multiplex licensees as part of the process of licence renewal …”
Perhaps Ofcom should explain precisely how its policy on DAB reception quality is working “to look after the interests of listeners.” The story to date seems to look like this:
* When DAB was introduced, the regulator got its technical sums wrong.
* Poor quality reception dogged DAB from the beginning.
* The regulator ignored the problem.
* The radio industry knew this was a problem.
* The regulator still ignored the problem.
* Belatedly, the industry came up with better DAB technical parameters.
* Implementing those new parameters would cost it lots of money.
* Belatedly, the regulator acknowledged the problem.
* The regulator refused to accept responsibility for having created the problem.
* The regulator refused to take responsibility for fixing the problem.
*The regulator said it was a “commercial decision for the licensees” to fix the problem.
*The regulator renewed existing DAB multiplex licences to prolong the problem for a further 12 years.
Maybe Peter Davies’ earlier quote should be amended to:
“Ofcom’s primary concern in DAB radio is to stick two fingers up to all those radio listeners who, since 1999, have spent money buying a DAB radio, taken it home, and found that reception is too poor to use it.”
I’m a numbers man. I can tolerate a little numerical exaggeration, a few rounding ups, or even the odd ‘nearly x million’. But when people invent numbers and stick them in their press releases, I reach for my calculator. Not for the first time, today Digital Radio UK advanced the concept of ‘mind over mathematics’ to a new level.
In its press release of 21 December 2010, Digital Radio UK estimated “that due to strong Christmas sales, over two million digital radios will be sold in 2010.” I questioned how this could be true in my blog. Turns out that it wasn’t.
In today’s update, Digital Radio UK admitted that the “increase in digital radio sales” it had heralded in December was, in fact, a decrease because “2010 was slightly down in digital radio sales volumes (-2.3%) compared to 2009.”
In plain English, 1.94 million digital radios were sold in 2010, compared to 1.99 million in 2009 and 2.08 million in 2008. Increase? No. Growth? No. Over 2 million in 2010? No. Were these sales figures in the Digital Radio UK update? No.
In another numerical nonsense, today’s Digital Radio UK update said:
“If this annual growth rate [in digital radio listening] is sustained, then the Government criterion of 50% of digital listening will be achieved in 2014.”
This is mumbo jumbo rubbish from people who like to use numbers to baffle the public and to obscure the truth. The 50% threshold is no more likely to be reached in 2014 than it is in 2013, which had been the original government target. A trendline* through six years of quarterly data (see graph above) shows that the 50% criterion will not be reached until year-end 2018.
So what happened to the original 2013 target for 50% that had been set by the government’s 2009 Digital Britain report? It now seems to have been completely forgotten. No explanation, no apology – just ignored (in June 2009, I had predicted that the 2013 target would prove “impossible”).
So how confident is Digital Radio UK that its new 2014 target is attainable? Enter stage left its CEO, standing next to a PowerPoint chart last week:
“This next chart is the most risky one I have in the pack. I hesitate showing you, particularly given the most recent conversations. But, I think, rather than just looking at a moment in time, there is a value in extrapolating. And all sorts of health warnings around this, you know, you’ve got government economists, you’ve got analysts in the stock market, you know, you can’t ever predict these things correctly. But, just taking the trends of the last three years and of the last year and running them forward – and life won’t be that simple but – just to understand from a mathematical calculation, where would that take you? Well, if we took the three-year compound growth rate, of the last three years, it would run us through to achieving 50% by the end of 2015, if we take the three-year curve. If we took the one-year curve that we’ve seen in 2010, it would take us to the end of 2014. To get to the end of 2013, which was an aspiration of Digital Britain, would require the compound growth rate to rise to 26%. So it needs to take a step change. You could put an argument forward that there are step changes coming, in content, in coverage, in cars, in communications and in consumer electronics. But I think it would be a brave man, or a brave woman, to say that, you know, you are definitely going to hit that grey line, and I wouldn’t say that. What I would say is that, on current trends over the last three or four years, we are likely to hit 50%, you know, in the next five years, I would say.”
So, February 2011 plus five years equals 2016. Well, this does not match the forecast in the ‘real world’ graph above of 50% being attained by year-end 2018. But neither does it match the 2014 date in today’s Digital Radio UK update.
Exactly where that leaves us is unclear. Is it 2014? 2016? Another year? Any old year?
DAB and realism and numbers seem to mix as well as oil and water and … er, more oil.
“Quite where the maths comes from to deliver 2014 is beyond me!” one senior radio executive said to me today. “Why do they put this out when it will surely mean another stick to beat them when it doesn’t happen?”
[ENDNOTE: * = there is no statistical evidence from historical data to demonstrate that the automated Microsoft Excel trendline is anything other than straight line.]