Introduction

Grant Goddard is a radio broadcasting expert with a lengthy track record of creating successful, innovative radio stations and programmes. He has worked in the radio industry for several decades as a senior manager and consultant, both in the UK and overseas, for some of the world’s largest media owners. As an independent media analyst, he writes extensively about the radio business for consumer and trade magazines, books and sector reports for stakeholders. 

Firsts

• Managed launch of first UK commercial radio station to target a youth audience, first UK radio station licensed with a black music / dance music format (KISS FM London)
• Created & implemented first Contemporary Hit Radio music format at a UK local commercial radio station (Metro Radio Newcastle)
• Consultant to launch of first commercial radio network in India (Radio City)
• Launched first national commercial radio station in Hungary (Radio Juventus)
• Analysed & published first UK market-by-market radio station rankings from audience data (in rpm Weekly)
• Authored first book to document the two-decade campaign by pirate radio for a black music station to be licensed in London (‘KISS FM: From Radical Radio To Big Business’)
• Produced first weekly independent music chart show on UK radio (Metro Radio Newcastle)
• Produced first monthly UK music radio programme syndicated to Japanese radio (for Rough Trade Distribution)
• Produced first DJ mix show on licensed UK radio (for Richie Rich on KISS FM London)
First journalist to compile & publish weekly updated listing of London pirate radio stations from monitoring (in City Limits)
First presenter to play roots reggae & African music on London pirate radio

U.K. Commercial Radio

• Negotiated 10% ongoing reduction to cost of commercial radio sector’s RAJAR audience research (for RadioCentre)
• Member of team that negotiated 17% ongoing reduction to commercial radio sector’s transmission costs (with Enders Analysis for RadioCentre)
• Researched & wrote John Myers’ report for UK government Digital Britain consultation, leading to legislation that substantially reduced regulation of commercial radio stations
• Advised commercial radio sector on negotiations of music copyright agreements with PRS, PPL & MCPS (for RadioCentre)
• Advised Daily Mail & General Trust on its significant shareholding in largest UK commercial radio group GCap Media plc, which led to its sale to Global Radio Limited (for Enders Analysis)
• Initiated and co-ordinated successful campaign lobbying the government to release FM frequencies for new local commercial radio stations in London (with Heddi Greenwood for KISS FM London)
• Co-ordinated three successful funding applications to UK government Technology Strategy Board for online radio projects (partnerships with Festival Productions, Imagination Technologies, Mixcloud, Reciva, Sharpstream, UK Radioplayer & University of Westminster)

Radio Station Launch/Turnaround Strategies

KISS FM London: launch achieved 1,000,000+ listeners per week within six months (one of most successful UK radio station launches)
Radio 7 Moscow: turnaround from last to #3 commercial station with 1,000,000+ listeners per week in a market of 40+ stations
Radio Juventus Hungary: launched to become #1 ranked station in country with 34% adult weekly reach & 1,000,000+ listeners
Radio City India: launched to become #1 commercial network in country (47,000,000+ listeners per week)
Radio Skonto Latvia: turnaround to #1 Latvian-language station in country
Metro Radio Newcastle: turnaround to become commercial radio station with fastest growing audience in UK

Sector Forecasts

• Created UK’s most sophisticated model for forecasting commercial radio sector audiences & revenues
• Only media analyst to correctly forecast that DAB digital switchover would never happen in UK
• Only media analyst to correctly forecast long-term declines in UK commercial radio sector listening & revenues
• Only media analyst to correctly forecast Conservative government expenditure cutbacks would have huge negative impact on UK commercial radio revenues
• Only media analyst to correctly forecast that merger of Capital Radio plc & GWR Group plc into GCap Media plc would prove financially disastrous
• Only media analyst to correctly forecast that Channel 4 Television’s digital radio venture would fail
• Only media analyst to correctly forecast that Virgin Radio held little value & that its re-launch as Absolute Radio would not succeed

Author/Presenter/Speaker

Authored 1,000+ analyst reports, commentaries, articles in the trade & consumer press about radio sector issues
Authored two books about the UK radio sector: ‘KISS FM: From Radical Radio To Big Business‘, ‘DAB Digital Radio: Licensed To Fail
• Invited to make presentations at UK/international conferences: EBU Digital Radio Conference, AER Annual Conference, egta AGM & General Assembly, Music 4.5 ‘Smart Radio’ Conference, RadioCentre Members’ Conference, DCMS Digital Radio Stakeholders’ Group Consumer Panel
Interviewed by BBC Radio Four (including ‘Today’, ‘PM’, ‘The Media Show’), BBC Five Live, 40 local BBC stations, Channel 4 News, community radio, national newspapers & trade/consumer magazines
Creator/founder of UK’s longest running monthly black music magazine Free! (later renamed Touch)
Creator/publisher of weekly UK radio industry newsletter (Radio News)
Authored successful KISS FM London incremental local FM radio licence application

Regulation

Commissioned to research & author first report on BBC acquisitions of UK independent radio productions (for BBC Trust)
Invited to present written & oral evidence to House of Lords Communications Select Committee on digital radio switchover
Invited to present written & oral evidence to Competition Commission inquiry into local commercial radio ownership
Commissioned to collate & analyse radio sector datasets for first Ofcom Communications Market Report
Evaluated local commercial radio licence applications & recommended licence awards to Members’ Board of The Radio Authority

Market Research

• Devised & executed 100+ ad hoc market research studies for radio station launch/turnaround strategies in UK, Europe and Asia
• Evaluated & critiqued market research commissioned by local commercial radio licence applicants (for The Radio Authority)
• Consultant to BBC World Service Trust, radio station owners and stakeholders on market research and questionnaire design to understand radio audiences
• Managed auditorium tests/market research of 1000’s of songs in India, Russia, Hungary, Czech Republic & Latvia to compile radio station playlists

Copyright

• Researched & authored expert witness statements for the long, complex and groundbreaking PRS case before the Copyright Tribunal considering online music streaming music copyright royalty rates
• Consultant to PRS & RadioCentre concerning music copyright agreements between the UK commercial radio sector & rights owners
• Project managed production of government-funded prototype online one-stop site for radio businesses to obtain multiple music copyright licences

Music Industry

• Discovered singer Ofra Haza in Israel, promoted her recordings in UK, managed first UK promotion tour, achieved UK Top 20 single
• Worked for Rough Trade Records director Scott Piering, promoting independent record releases to radio, & achieved several UK Top 20 singles
• Created & managed distribution of 100’s of ‘World Music Information Packs’ to listeners of Charlie Gillett’s world music show on Capital Radio London
• Invited to serve as jury member for Juno music awards in Canada

Radio Production/Management Training

Trained team of 50+ programming staff from London pirate radio to launch new commercial radio station (for KISS FM London)
Trained teams without prior radio experience in India, Russia, Hungary and Latvia to launch & manage commercial music radio stations (for Star TV and Metromedia International Inc.)
Trained production teams in Cambodia to create, manage and market live phone-in and magazine radio shows (for BBC World Service Trust)

DAB Radio Switchover: Dead As The Dodo

In 2004, I wrote my first article predicting that the UK’s implementation of DAB digital radio was headed for failure. It was not guesswork. I had analysed radio industry data since 1980. I had worked  at The Radio Authority when it implemented DAB. I had worked  in Ofcom’s radio division. I had seen DAB from inside and outside the regulator and the commercial radio industry. Only five years after its launch, the available evidence demonstrated that DAB was headed for disaster in the UK.

I continued to write about DAB  –  in press articles, in analyst reports, in my blog, in my book ‘DAB Digital Radio: Licensed To Fail’  –  and to talk about DAB in radio and TV interviews. I did this not because I was ‘anti-DAB’ or a ‘campaigner’ (as some described me), but because my work as a media analyst requires me to carefully examine the facts and figures and to document their consequences. I had nothing to gain personally from stating evident truths.

Between 2004 and today, the UK radio industry could have scrutinised the growing collection of analyses that demonstrated DAB consumer take-up was failing. It could have taken firm, decisive action to transform DAB radio from failure to success. It chose not to. Instead, I found myself on the receiving end of abuse, slander and libel.

Two years ago, I stopped writing about UK radio in this blog because ‘Jimmy’s and ‘John’s were pasting my analyses into their press articles, blogs and corporate statements, uncredited and without permission. Those same people then e-mailed me to ask why I was no longer updating my blog!

I write today only to bookend this blog. In recent months, it has been interesting to witness some of my ‘critics’ make a 180-degree turn and suddenly herald the imminent non-event of DAB radio switchover, whilst citing my analyses (uncredited) in support of their newly adopted viewpoint.

I wrote about DAB because I consider that this single issue has contributed more to the decline of the UK radio industry than all other sector issues combined. Thousands of experienced radio professionals have lost their jobs. Hundreds of genuinely local radio stations have disappeared. Much radio in the UK has become a shadow of its former self. The medium is suffering rapidly declining appeal to those aged under 30. The industry that I have worked in since 1972 is on the rocks. Most of the blame for this sorry state of affairs can be laid directly at the UK radio industry’s single-minded pursuit of DAB since the 1990s, at the expense of all other objectives and at a cost of more than £1bn.

 

In 2011, I had been invited by the government’s Department of Culture, Media & Sport [DCMS] to participate in a consumer panel as part of its consultations about DAB switchover. Addressing an audience of industry stakeholders, I predicted that the government would kick the DAB radio switchover decision into the long grass in 2013. I made the same prediction in my presentation to the board of one of the UK’s largest commercial radio companies [see above].

After the close of the DCMS stakeholder session, its chairperson, a civil servant in the DAB radio switchover section, leaned over to me and said something along the lines of: “You really shouldn’t be writing the things you do. People don’t like it, you know, and it is making them angry.”

She is one of a select group of people in DCMS, Ofcom, Digital Radio UK, the BBC and RadioCentre who have earned their livings by pumping out factually incorrect reports supporting their fiction that DAB radio is a massive UK success story and that DAB switchover is inevitable. Public money and BBC Licence Fees have paid many of these people for years to mislead the public and the media about DAB radio.

Anyone with knowledge of the UK radio industry and training in statistics could have concluded from available data during the last decade that the implementation of DAB radio in the UK was headed for disaster. My analyses were not ‘rocket science’. What riled the army of DAB propagandists was that my published analyses directly contradicted their bullshit. The final e-mail sent to me by the chief executive of the Digital Radio Development Bureau (forerunner of Digital Radio UK) said:

“If you are going to deliberately mis-use the information we provide to you to construct as negative a view as possible with cheap shots like those below then we just won’t co-operate with you in the future.”

He saw only “cheap shots”, rather than evidential analysis, in my 2008 Q2 commercial radio sector report published by Enders Analysis, which had said:

“Although it remains the most popular platform for digital radio, ‘DAB’ usage seems to be steadfastly stuck at 9.0% of total commercial radio listening, dwarfed by the continued dominance of analogue radio (69.2%). Whilst 87% of households now have access to digital TV, and 67% have access to the internet, DAB penetration remained static at 27.3% in Q2 2008. Sales of DAB receivers have failed to continue the momentum demonstrated in Q1 2008, unit sales having slowed to 108,000 in June 2008, their lowest monthly level since June 2007. With sales of DAB receivers still concentrated mainly in the Christmas period, the imminent danger is that the hardware’s relatively high average ticket price, combined with the effects of the consumer ‘squeeze’, could impact the much needed winter 2008 sales peak (552,000 units sold in December 2007).

Despite the sterling efforts of the Digital Radio Working Group (convened by the Department for Culture, Media & Sport) over the past eight months, the radio industry, as yet, seems no closer to finding an immediate solution to the problem of slow DAB take-up than it was a year ago. Although all parties agree that it is ’content’ that will drive consumers to purchase DAB radios, the major radio groups have still not unveiled any plans to stimulate the consumer market with new digital radio brands.”

Five years on, the numbers may have changed but the unresolved problems with DAB radio remain exactly the same. My analyses and predictions during the last decade have proven correct … while a small army of DAB propagandists have been paid handsomely during that time to produce a massive volume of ‘South Sea bubble’ hot air about DAB radio, partly paid for from public funds. Doubtless they will be rewarded for their failure.

Footnote: find out more in these selected writings on DAB radio:
Channel 4: Radio Ambitions Aim Too HighEnders Analysis, July 2007
The Future Of Digital Radio: Is It DAB?Enders Analysis, January 2008 
Tuned Into The Future Of Radio, Broadcast, June 2008
Channel 4 Radio: Six Feet UnderEnders Analysis, October 2008 
In The Ditch With DAB Radio, The Register, December 2008
Digital Radio In The UK: Progress And ChallengesEBU 3rd Digital Radio Conference, June 2009
Germans And Swiss Snub DAB, The Register, London, July 2009
‘Digital Britain’ And The Radio Sectoregta Radio Newsletter no.16, November 2009
DAB Is Dead, Index On Censorship, June 2010
DAB Digital Radio: Licensed To Fail, Radio Books, October 2010

Growing DAB radio usage in the UK. Confused? You should be!

“Digital listening at an all-time high,” shouted the headline of one online news story. Yes, it was the quarterly RAJAR radio ratings, offering opportunities for some journalists to pitch their stories just about any which way they wanted. The opening sentence of this particular report said:

“The digital revolution shows no signs of slowing down, and not even the radio airwaves are set to maintain their analogue tradition, as a new [RAJAR] study suggests.”

Hardly. This news story was interesting because it achieved two simultaneous feats of confusion:
• ‘DAB radio’ and ‘digital radio’ are two different things. ‘DAB’ is the platform on which the UK radio industry bet the farm in the 1990s. ‘Digital radio’ is radio received on any platform that is not analogue (AM/FM) and includes the internet, smartphones, digital TV … and DAB
• The fact that DAB listening is growing does not necessarily mean that it is replacing analogue listening at a rapid rate of attrition. Why? Because DAB listening, even after 12 years, is still at a remarkably low level.

These confusions are not accidental. At every opportunity, statements made by Digital Radio UK have sought to confuse the public by referring to ‘digital radio’ as if it means precisely the same as ‘DAB radio.’

A look at the graphs below of the latest RAJAR data illustrate clearly that the “analogue tradition” in radio remains so dominant that the real question to be asked is: how come DAB usage is still so low after so many years and after so much money has been invested in content, transmission systems and marketing?

The adage ‘a picture speaks a thousand words’ has never been more true than with DAB/digital radio usage. The four graphs above – all taken from the industry’s latest RAJAR data – say it all by showing:
• how little impact DAB radio has had on analogue radio usage in the UK
• how slow the rate of growth is of DAB receiver take-up and of digital radio station listening.

Far from radio losing its “analogue tradition,” as the news article asserted, the old FM/AM platforms look, from these data, to be as strong as ever in the market.

One hint that some digital radio stations on the DAB platform could be on their way out is the BBC’s latest decision to aggregate listening for Radio 4 and Radio 4 Extra in RAJAR. It had been doing this from the outset for Five Live and Five Live Sports Extra, on the premise that ‘Sports Extra’ was only a part-time broadcast station.

I would not be at all surprised to see the BBC:
• similarly aggregate Radio 2 listening with 6 Music
• similarly aggregate Radio 1 listening with 1Xtra
• downgrade its digital radio stations from full-time DAB broadcast stations to online, on-demand ‘extra content’ available via RadioPlayer, iPlayer and applications.

The problem with national broadcast BBC radio stations, whether analogue or DAB, is that the BBC Charter insists they must be made available universally to all Licence Fee payers. Given the huge cost of extending the BBC’s national DAB transmission multiplex to near-universal coverage equivalent to FM radio, particularly at a time when the BBC is having to cut budgets massively, it would be more sensible to downgrade ‘1Xtra’, ‘2Xtra’ and ‘4Xtra’ to ‘red button’ status whereby they offer additional content on a part-time basis. The consumer would access these Extra ‘stations’ via a complementary platform (IP) rather than the BBC having to shoulder the financial burden of programming them as 24-hour broadcast entities.

It would prove a convenient solution for the BBC. As it found with 6 Music last year, public controversy surrounds any decision to close a radio station, however small its audience in absolute terms. Alternatively, by pursuing the ‘Extra’ route, the digital stations can be re-branded, re-purposed and re-platformed away from expensive, fixed-cost DAB and towards IP, where the cost of delivery varies proportionately with the number of people using it. What better way to deliver value for money to Licence Fee payers? And what better way not to face public wrath for ‘closing’ a digital radio station.

As BBC Radio 2 DJ Steve Wright said on today’s Broadcasting House show:
“Maybe full digitisation [of radio from FM/AM to DAB] may well take thirty years …”

As the graphs above demonstrate, there IS slow growth in DAB usage, but the rate is insufficient to replace analogue radio as the dominant consumer platform any time soon. It’s time for BBC strategy to catch up with that reality.

UK DAB radio receiver sales fell in 2009 and 2010, but “digital radio sales have held up – they are flat” insists Mr Switchover

For an organisation that has been charged with marketing DAB radio to the British public, Digital Radio UK has managed to remain remarkably invisible during 2011. This alone made the appearance of Digital Radio UK’s chief executive on BBC Radio 4’s ‘You & Yours’ show notable. The fact that nothing new was said was hardly surprising – there is nothing new to say about DAB.

Out in the real world, as opposed to the imaginary world inhabited by Digital Radio UK, the notion that ‘DAB radio’ will replace AM/FM radio is already a dead duck. The only believers still worshipping ‘DAB’ seem to be Digital Radio UK, RadioCentre, Ofcom and government civil servants.

The evidence is transparent. The number of DAB radio receivers sold in the UK fell year-on-year in both 2009 and 2010 (by 6% and 2% respectively). These data are collected by GfK and supplied to Digital Radio UK. These numbers, together with a nice colour graph, were distributed at last month’s RadioCentre members’ get-together. These are industry data of which Digital Radio UK is perfectly aware.

Yet, Digital Radio UK’s chief executive insisted in this interview on national radio that “digital radio sales have actually held up – they are flat year-on-year.” This is untrue. ‘Down’ is not ‘flat.’ ‘Down’ is ‘down.’ DAB radio receiver sales peaked in 2008 and have been falling since. DAB receiver sales in 2010 were 8% below that 2008 peak. That is clearly not ‘flat.’

I wonder how it is that:
• The chief executive of a high-profile marketing organisation can appear on Radio 4 (audience: 11m adults per week) and flatly state something that he must know not to be true?
• The board of Digital Radio UK does not haul him in and remind him that his job description is to ‘persuade’ consumers of the value of DAB, not deceive them?
• A substantial proportion of this organisation’s funding is derived from the BBC Licence Fee, so the public is effectively paying for an executive to tell them untruths about consumer take-up of DAB radio?

You & Yours
BBC Radio 4
29 July 2011 @ 1200

Ford Ennals, chief executive, Digital Radio UK [FE]
Wiiliam Rogers, chief executive, UKRD [WR]

Q: Are you not disappointed with the lack of a rise in [DAB] radio sales?

FE: No, I think what the Ofcom report confirms is the solid progress that is being made. We see growth in overall digital listening, we see growth in terms of the number of homes that have a digital radio receiver in there. So, 40% of all homes now have a DAB receiver in them, we know that 47% of all listeners are listening to digital radio every week, and we have seen growth in digital listening. So I think progress is being made. I think we are in a difficult sales period for overall retailers and we have seen a decline in overall consumer electronics sales. Digital radio sales have actually held up – they are flat year-on-year. We have now sold 13 million DAB digital radios, but the key thing, just lastly, to remember is that you can receive digital radio via digital television, via a computer or, indeed, via a smartphone and many, many households and consumers have those.

Q: William Rogers, are you surprised by the lack of increase in interest in digital radio?

WR: No, not in the least. And I think we have to remember that Ford, with respect to him, is being a little disingenuous because, of course, the switchover is about people being forced to move way from analogue and onto DAB. So that’s the issue we need to focus on. And what this report highlights, and I’m personally delighted to see it, is it really does shine a light on the shambles that is this proposed DAB migration.

Q: But things aren’t that bad. There are increases in radio usage, as Ford has just indicated.

WR: Well, hang on a minute. The whole premise behind the switchover is that it will be, quote, consumer led. And the one thing we know from these statistics is that, whatever else it is, it’s not being consumer led. As your reporter quite rightly said earlier, of the eight-and-half million radio devices sold in the twelve-month period we are talking about, four out of five of them did not have a DAB receiver capacity. And, more interestingly, of those people who were asked whether they were likely to buy a DAB set at any time in the next twelve months, four out of five of them said they were not likely to. So the consumer is making it very clear what they want and, after eleven years, it’s time this thing was put to bed.

Q: Ford Ennals, one of the things that we constantly hear from listeners is the whole issue of reception. That’s really what, I think, the message is that we get from people. That is what they are worried about. Whether they approve or not [of DAB], what they say is an awful lot of people can’t get them [DAB radio signals] and, if they can get them, they can’t get them consistently.

FE: Well, I think, where the industry and the broadcasters are absolutely unified and agreed is that digital is the future of radio in the UK. And I think it’s just a matter of the timetable and the transition path for that. One of the big issues is, as you have said, is about coverage and about the ability of everyone to get a strong [DAB] signal. Now, what Ofcom have done is developed a plan to extend coverage, both of the local services and the national services, so that people can receive those services and get more confidence. But there is a direct parallel here with TV and digital television – I ran the TV switchover programme – and, back in 2006, the majority of TV sales were analogue and only 75% of the population could get digital television. Now, what happened over the next few years is we saw a very swift transition and we saw transmitters built out that so everyone could get digital TV. We’ll see the same on radio.

Q: What about that, William? We don’t jump ‘til we have to. We don’t buy ‘til we have to.

WR: Look, look. Let’s be clear about this. Ford Ennals is paid to market the DAB switchover, so I understand why he has to say what he has to say, because the message from this report is clearly embarrassing for him to make a case which clearly doesn’t exist. There are a number of points we have to remember. First of all, the comparison with TV switchover is plainly an absurd point to make. They are not remotely, in any way shape or form, similar. And people are choosing not to endorse DAB as an alternative [to FM/AM]. The critical thing we have to understand here is three elements. First of all, ….

Q: You’ll have to confine yourself to one because we are really tight for time.

WR: Okay, the fundamental problem with this whole process is that you cannot migrate an entire sector if the [DAB] platform you have chosen does not have the capacity to allow you to do so. And there are scores of radio stations in this country who will be denied the opportunity to move to a DAB platform, because the choice was wrong in the first place.

Q: A ten-second response.

FE: Just finally. People love digital radio. We’ve seen it with [BBC] 6 Music and we saw the campaign to save 6 Music. We’ve seen it with the response to Radio 4 Extra. And they’ll continue to enjoy it in the future.

Q: I’m sure our postbag and our e-mails will be as big as usual. William Rogers and Ford Ennals, thank you both very much indeed.

……………………………..
Point of information:
Ford Ennals was chief executive of Digital UK, the TV switchover marketing organisation, from April 2005. He announced his departure in November 2007, the same month that the first UK region entirely switched off analogue television broadcasts.

UK listening growth demonstrates radio’s strengths in a multi-tasking world

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.

UK commercial radio sector revenues Q1 2011: local advertising hits 10-year low

Data published last week for 2011’s first quarter demonstrate that revenues of the UK commercial radio sector are still struggling to rebound from the previous two years’ ‘credit crunch.’

A large part of the problem is the coalition government’s swingeing cuts to its marketing budget since May 2010, which have afflicted commercial radio advertising much more significantly than other media [see my blog]. Additionally, and very worryingly, in Q1 2011, revenues from local advertisers fell to their lowest level for a decade, even at a time when local radio might be thought to be making client gains from the decimation of the local newspaper industry.

As has been suggested here previously [see my blog], the strategy of the largest commercial radio owner, Global Radio, to transform its local stations into ‘national’ brands would seem to be a recipe for disaster at a time when:
• the national advertising market for radio is shrinking so rapidly (down 34% in real terms between 2004 and 2010)
• the BBC continues to dominate the national radio marketplace with exceptionally well-funded, ubiquitous brands [see my blog]
• Ofcom’s market research points to overwhelming demand from consumers for more local radio rather than more national radio [see chapter 4(d)]
• many local commercial radio offices have been closed just as local newspapers have closed in many local markets.

TOTAL UK COMMERCIAL RADIO REVENUES:
• Q1 2011: £126.9m (£137.9m in Q1 2010)
• Down 8.0% year-on-year
• First year-on-year decrease since Q3 2009

UK COMMERCIAL RADIO NATIONAL REVENUES:
• Q1 2011: £69.2m (£78.6m in Q1 2010)
• Down 12.0% year-on-year
• First year-on-year decrease since Q3 2009

UK COMMERCIAL RADIO LOCAL REVENUES:
• Q1 2011: £33.7m (£35.9m in Q1 2010)
• Down 6.1% year-on-year
• Lowest quarter since Q1 2001

Although the quarter-on-quarter trend during the last three years appears to be relatively flat, once the data is viewed in the longer term, it is apparent that the commercial radio sector has been unable to grow its revenues back to the peak achieved in 2004. Adjusted for inflation, the ‘real’ peak occurred in 2000 and, by 2010, commercial radio total revenues had fallen by 33%.

Following the impact of the ‘credit crunch,’ the subsequent blow to the sector caused by the government’s slashed expenditure on commercial radio advertising from its Central Office of Information [COI] has been catastrophic. COI spend on radio in the twelve months to March 2011 was down 80% year-on-year. In the year to March 2010, the COI had been the radio sector’s biggest advertiser by a factor of eight but, only one year later, it had been diminished to almost par with the second biggest radio spender, Autoglass.

In June 2011, the government confirmed that the COI will be axed altogether, offering no respite to the commercial radio sector. According to The Guardian:
“Instead the government intends to run advertising and marketing activity out of the Cabinet Office, hiring about 20 extra staff to complement existing communications teams.”

With local advertising revenues having hit a decade-low in Q1 2011, and national revenues having fallen 34% in real terms between 2004 and 2010, surely it should be time for commercial radio to ask itself:
• is the current local-station-turned-national-network policy the appropriate strategy for the current advertising market?
• is the current local-station-turned-national-network policy the appropriate strategy to satisfy radio listeners?
• how much longer can the ‘slash and burn’ strategy (as pursued by GWR, then by GCap, now by Global Radio) be applied to the commercial local radio industry before there is simply nothing left to cut?
• how much more shareholder value can be destroyed in commercial radio before revenues fall faster than costs can be cut?

A question I was asked by one senior radio executive last week was: how will all this commercial radio ‘slash and burn’ end? I wish I knew. Of one thing I am certain: it must eventually end in tears once the net book values of dozens of commercial radio licences have to be written down by millions of pounds in the accounts of their owners.

This process has already started tentatively:
• Global Radio valued its licences at £333m on 31 March 2010, after having swallowed a £54m ‘impairment’ write-down in 2008/9
• in 2009/10, the Guardian Media Group suffered an ‘impairment’ of its radio licences by £64m and now values them at £68m
• Times of India looks likely to have to take as little as £20m for Absolute Radio, a national station it had acquired for £53m only three years ago.
We have to anticipate more write-downs like these.

At some point, even millionaires must not enjoy watching as their radio assets are reduced to dust by shrinking audiences/revenues. But what can be done when those same owners have already starved the goose that had once laid the golden local commercial radio egg?

[Endnote: Historical data from some previous quarters have been revised marginally at source]

When is a consultation not a consultation? When Ofcom consults about radio

Each of us has dozens of ‘consultations’ every day. You know the sort of thing. ‘I’m going to the corner shop – anything you want?’ ‘A Kit-Kat?’ ‘OK.’ However, if I came back with a cat rather than a chocolate bar, you would understandably be unhappy. That had not really been a consultation at all.

Ofcom’s consultations on radio are increasingly like that. Ofcom pretends it is going to listen. It doesn’t listen. And then it does whatever it wanted to do in the first place. Mmmm. Surely that is not really a consultation at all.

In June 2011, an Ofcom consultation asked six questions about a proposal by Now Digital (owned by radio transmission provider Arqiva) to extend the coverage of its Exeter and Torbay DAB multiplex to North Devon. One of those questions was:

“Q6. Do you consider that there any other grounds on which Ofcom should approve, or not approve, the request from Now Digital? Please explain the reasons for your view.”

However, Ofcom had apparently already decided that its ‘consultation’ was not a genuine consultation at all, when it explained:

“Before deciding whether to agree to Now Digital’s request, Ofcom is legally required to seek representations on the request from any interested parties. … Provided that the request meets the terms of the statute, the decision whether or not to agree to the request is at Ofcom’s discretion.”

So, Ofcom’s 21-page consultation document was really a complete waste of time and money. The decision was already made. And it would be even more of a waste of time and money for anyone to respond. But respond they did.

In July 2011, Ofcom admitted that, out of 234 responses submitted to its consultation, “the vast majority … were opposed to Now Digital’s request.”

Most objected on the grounds that:
• “agreement to the extension of the multiplex would enable the holder of an existing FM local commercial radio licence for Barnstaple to secure the renewal of that licence, precluding the advertisement of a new such licence (which otherwise would have been due to take place forthwith); and;
• the level of coverage of North Devon proposed by Now Digital was unsatisfactory as it would leave 30% of households in the area with no access to radio services in the event of a digital radio switchover.”

Did Ofcom care about this volume of public opposition? Not at all. Did it investigate why the share of listening to the merged Heart FM Devon had fallen dramatically to an all-time low last quarter (behind BBC Radio 2, BBC Radio 4, BBC Radio 1 and BBC Radio Devon) [RAJAR, 2011 Q1]? Apparently not. Ofcom explained:

“The [Ofcom Radio Licensing] Committee [RLC] noted the strong opposition to the fact that approval of Now Digital’s request would allow Lantern Radio Limited, the holder of the local [Heart] FM commercial radio licence for Barnstaple, to apply for a renewal of the licence and thereby preclude advertisement of a new licence. However, the RLC did not consider that this fact should preclude the granting of Now Digital’s request.”

And why not? Because Ofcom’s wholly unrealistic policy objective, for DAB to replace AM/FM radio, is still being doggedly pursued to the exclusion of any wider regulatory issues – consumer choice, market competition or the removal of barriers to sector entry. As well as to the exclusion of the majority of the 234 respondents to this consultation.

To put the same thing in Ofcom’s own weasel words: “What Now Digital Limited sought in its request is provided for in section 54A of the 1996 Act. Agreeing to the request would be consistent with the broad policy aims of that section. Namely, the extension and promotion of local DAB broadcasting with the consumer benefits of greater choice of services.” [emphasis added]

Now Digital promised to launch the first of three new DAB transmitters in North Devon within six months of Ofcom’s approval. And what about the remaining two? Now Digital promised these will be installed “six months after a positive decision in 2013 by Government regarding digital switchover”. Oh, so you mean ‘never.’

The ulterior objective of this proposal was that the promise to build a single new DAB transmitter in North Devon would enable Global Radio to automatically renew its existing FM licence in Barnstaple for a further eight years without a public contest, thus denying any potential new entrants. Ofcom simply rolled over and complied. And what did Ofcom suggest to the complainants who might not have felt that London-based Global Radio was offering them a genuinely local radio station in Heart FM? It stated:

“The RLC recognised the strength of feeling among many respondents to the consultation for there to be an opportunity for an alternative provider of a local radio service in North Devon to apply for a licence … Ofcom is always keen to facilitate new local radio services for listeners where such services are viable and therefore able to offer consumer benefits over the long term. To this end, the RLC noted that, in its response to the consultation, Arqiva stated that there is presently capacity for at least one further new station to be accommodated on the Exeter & Torbay local [DAB] radio multiplex.”

This is patronising rubbish. “Viable”? “Consumer benefits”? Can Ofcom please name any DAB-only radio station that is making an operating profit as a standalone business? No? Because there isn’t one. DAB radio has proven to be one massive financial black hole that has wasted approaching £1bn. Suggesting to consultation respondents that they start their own new local radio station on DAB is akin to Ofcom recommending these correspondents burn down their own houses.

All Ofcom has done is raise two fingers to the people of North Devon in this consultation. If I were Ofcom’s director of radio, Peter Davies, I would not consider booking a holiday in North Devon any time soon.

Unless Global were to return the favour by picking up the tab for his bodyguards?

SPAIN: DAB digital radio switched off in most of country

A new law in Spain has reduced the coverage requirement of the country’s DAB radio transmissions from 50% to 20% of the population.

From 10 June 2011, a new Royal Decree required that DAB broadcasts “must ensure a minimum coverage of 20% of the population,” replacing the 50% requirement that had been stipulated in legislation since 1999.

Within the next three years, the government will be able to change this coverage requirement once again if digital radio does not grow its audience share to more than 10% of total radio listening. In the unlikely event that digital radio’s audience share ever exceeds 10%, DAB radio coverage will be required to increase from 20% back to 50% of the population.

As reported here in 2010 [see blog], commercial radio in Spain has found no incentive to broadcast on DAB because “the audience is zero.” This new legislation relieves broadcasters from having to underwrite an expensive DAB radio transmission system that, to date, had generated no incremental listeners or revenues.

The Decree noted that:

“The development of terrestrial sound broadcasting has been hampered in recent years by, amongst other things, a lack of digital radio receivers which has significantly reduced the audience share initially anticipated and, thus, has jeopardised the possibility for station owners to achieve a return on their investment.”

The web site marketing DAB radio in Spain has not been updated since April 2008. The web page for state radio’s DAB transmissions no longer exists. It has been reported that DAB radio broadcasts will now be limited to only two metropolitan areas.

[thanks to Eivind Engberg and Wohnort]

PORTUGAL: DAB digital radio switched off

On 1 June 2011, Rádio e Televisão de Portugal [RTP], the state broadcaster in Portugal, instructed Anacom, the national transmission provider, to switch off all DAB radio transmitters.

RTP explained in a press statement that its decision was the outcome of budgetary constraints and the fact that no commercial broadcasters had agreed to broadcast on DAB. Additionally, it said that “high priced radio receivers had prevented many people acquiring them.”

According to one Portuguese newspaper:

“The DAB terrestrial digital radio system was launched in August 1998 by RTP and by Anacom, which manages the national transmission system. Despite having national coverage, which was decreed by law in July 1998 that permitted broadcasts by all radio stations interested in the platform, DAB never took off in Portugal. Until now, the platform has been limited to relays of existing FM broadcasts by state radio because no commercial radio station signed up. The implementation of DAB also struggled with the fact that there was insufficient supply in the Portuguese market of DAB radio receivers, according to sources consulted by this publication. Apparently, the DAB system was costing €250,000 per annum over more than a decade. The need for RTP to invest in replacing this transmitter network may have weighed heavily on the decision to suspend the service.”

GMCS, the Portuguese media regulator, explained in April 2011:

“RTP claims that, despite the significant investment totalling €6.3m to date, the reality is that few Portuguese used the [DAB] system, which leads us to conclude that the allocation of resources to this project does not meet the efficiency requirement and good practice required for public funds.”

[thanks to Eivind Engberg and Wohnort]

DAB in cars: the straw that will break digital radio switchover’s back

Speaking today at the Intellect conference in London, broadcasting Minister Ed Vaizey tried to assure us that digital radio switchover was still “on course” to happen in the year twenty something or other:

“On cars, the move to include digital radio as standard in new vehicles has continued over the last year. Around 14% of new vehicles have DAB as standard, up from 4% a year ago.”

Within hours, this news was misinterpreted by one online news source as Vaizey having said:

Forty per cent of cars have DAB [Digital Audio Broadcasting] radios as standard now, up from just four per cent a year ago.”

From ‘14% of new cars’ to ‘40% of all cars’ in a stroke of a keyboard! No wonder the article went on to assert that “the key driver to the take-up of the [DAB] technology looks like it will come from the car industry as manufacturers start to fit digital radios as standard.”

How wrong can this statement be? Fewer than 1% of vehicles on the road currently have a DAB radio. That proportion is not going to increase quickly, even by 2013 or 2015, as the government wants it to. Rather than being “the key driver” for DAB radio take-up, cars will become THE major sticking point for digital radio switchover.

The UK car industry appears to be nearing the end of its tether over the confused information that has been fed to consumers in recent years about the so-called DAB ‘switchover’ and FM ‘switch-off’ date(s). This frustration boiled over at the last government Digital Radio Stakeholders Group meeting on 17 May 2011, when Bob Davis, who heads the Digital Radio Committee of the Society of Motor Manufacturers & Traders [SMMT], stood up to offer what he referred to as a “naughty” comment:

“Jane [Humphreys, Department for Culture, Media & Sport] said earlier ‘around 2015’ for a digital radio switchover. The automotive industry has made it very, very clear, since the process began, that it needs certainty. We’ve got 2013 [as the date for a government decision on switchover] and we think we’re working towards a 2015 switchover date. With respect, Jane, I can already see tomorrow’s headlines that DCMS says ‘digital switchover delayed from 2015’ because you used the phrase ‘around 2015’. That implies a delay. It may be what potentially happens in the market – it may be 2016, it might be a bit later than that – but, for the moment, from an automotive industry perspective, every time there’s a suggestion that 2015 has stopped being the aspirational date – or might stop being an aspirational date – all that happens is [that] the automotive industry, or parts of it, is given another opportunity to say ‘it ain’t going to happen, forget all about it’ and we will end up with the bigger problem of converting vehicles already in the parc to digital, because people will just say ‘if DCMS can’t give us certainty’ – and I accept that, at the moment, you can’t – but if DCMS are saying ‘around 2015’ instead of ‘in 2015’, it reduces the opportunity for SMMT to keep telling its members there’s a deadline, and it’s ‘this’. So please could we have a little bit of caution, from an automotive industry perspective, in (particularly) government references to switchover dates.”

Jane Humphreys: “Thank you, Bob, though I think I’m right in saying that the Minister has never said ‘it will be in 2015’. He too has said that it will be in terms of … that is the target to which we are working, but what is the principal objective is that we have to meet the criteria that have been set out and we have a piece of legislation – unless I’m much mistaken – that says there will be a minimum of two years’ notice. So….”

John Mottram, DCMS: “That’s right. I’m aware of three Daily Mail articles that suggest it’s seven years, two years, five years’ delay depending upon the date, so I think in terms of coverage and it being delayed, I think that delay is already out there. But to Jane’s point, I think the Action Plan and Ed [Vaizey]’s words make it clear that it’s a consumer-led approach. The industry target date is 2015 – we’ve never shifted from that – but that decision is based on the criteria….”

At that point, the meeting was abruptly closed. What had been scheduled to be merely another ‘tick the government box’ faux consultation meeting had suddenly started to spin out of control. The natives had started to get restless. It was time to turn them out onto the street again.

When UK radio listening figures are this good, why does RAJAR need to fib?

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.”

DAB Radio Downgrade: how is ‘90% of FM coverage’ a sensible target for DAB to replace FM?

“Makin’ a good t’ing bad!”

Moving the goalposts. Governments are adept at doing just that to help them achieve their targets or to make figures look better than they really are. Digital radio switchover is no exception. Given the technical and financial impossibility of the task plotted twenty years ago to completely replace analogue radio broadcasting with DAB radio, it has became necessary in recent months for the civil servants and digital radio lobbyists to move the goalposts.

In a blog in April 2011, I had outlined Ofcom’s latest ruse to deliberately plan to make DAB reception worse than existing FM reception for many radio listeners. Nevertheless, Ofcom will still declare this a victory for the technical superiority of the DAB platform.

The latest proposal under consideration is to make coverage of local DAB transmitters equivalent to 90% of existing FM coverage. On the one hand, this represents a belated admission that DAB radio cannot realistically achieve the same robust coverage as FM. On the other, it is a massive kick in the teeth to radio listeners – an attempt to purposefully replace something good (FM) with something worse (DAB). Madness!

A recent presentation by DAB lobbyist organisation Digital Radio UK invoked a new, vague “local digital coverage equivalent to 90%” criterion [see below]:

“90%” of what? The government’s Digital Britain report in June 2009 had fixed the digital radio switchover criteria as:
• “When 50% of listening is to digital; and
• When national DAB coverage is comparable to FM coverage, and local DAB reaches 90% of the population and all major roads.” [emphasis added]

There was never anything in Digital Britain about achieving “90% of existing FM coverage.” It was always “90% of the population.” The goalposts are being moved to make it easier for the government and DAB lobbyists to declare that DAB has achieved the criteria. Despite this outcome making the consumer experience of radio evidently worse.

We were told that one result of the Digital Radio Summit meeting on 31 March 2011 between government, regulator and the radio industry was:

“It is understood that it will cost around £20-30m to extend the local DAB signal to 90% of the FM signal in the UK…”

At a Westminster Media Forum conference on 5 April 2011, the topic of this newly created “90% of FM” criterion was raised by several speakers:

Jimmy Buckland, director of strategy, UTV Media: “There’s a DCMS [Department for Culture, Media & Sport] plan that’s been referred to today that’s currently on the table that would take local multiplexes to just 90% of what FM already delivers, with no commitment on major roads. If that plan’s agreed, it just about gets us to base camp.”

[…]

Neil Midgley, assistant media editor, The Daily Telegraph: “Now the briefing that we were getting last week was somewhere below £30 million for a build out to about 90% of current FM coverage. “

[…]

Daniel Nathan, director, Brighton & Hove Radio: “Just leading on from that, in Jimmy’s slide we saw the figure being an aspiration of ‘90% of the population’ and I was quite disturbed to hear that now that they are kind of moving away from ‘90% of the population’ to ‘90% FM coverage.’ When was that decided and by whom?”

[…]

Jimmy Buckland: “There were two different figures, there was originally a figure which was the criterion, at which point you would make a decision about switchover which was that the Government said that once we had ‘90% population coverage’ and ‘coverage of all major roads,’ you could make a decision and there were a couple of other criteria that go with that. The second figure which was ‘90% coverage of current FM’ for local DAB concerns what would be delivered by a proposal which is currently on the table. So to tie in with the previous point, what that £30 million delivers is a little bit more coverage at the local level, aggregated to 90% on a UK wide basis, so in some local markets it could be comfortably less than 90%, in other markets it could be higher and it doesn’t get you to the universality that you need for switchover.”

So, two questions remain unanswered:
• Who came up with the idea of ‘90% of FM coverage’ to be sneaked in as an easier criterion?
• Why are large parts of the radio industry (including RadioCentre and the BBC) not publicly campaigning against this ridiculous proposal intended to make reception of their radio stations on DAB WORSE for listeners than existing reception on FM?

It is hard not to conclude that the parties involved in this latest wheeze seem happy to treat the UK’s 46,727,000 radio listeners with utter contempt.