The Digital Radio Working Group’s Interim Report

This year DAB Digital Radio’s had more ups and downs than the Great Wall of China. Well, the industry has, meanwhile listeners are still buying the radios (7m of them) and listening more and more (DAB listening accounts for around 11% of all radio listening).

It’s nice, however, to see some good news this afternoon as the Digital Radio Working Group have just published their interim report. The DRWG-who? Well, they’re a body put together by the government at the end of last year to find out the following:

  • What conditions would need to be achieved before digital platforms could become the predominant means of delivering radio?
  • What are the current barriers to the growth of digital radio?
  • What are the possible remedies to those barriers?

What’s positive about the DRWG is that it made up of existing broadcasters – commercial, BBC and community – people involved in the manufacturing of radios, car companies and the relevant government departments. Who, to be fair, haven’t always seen eye to eye on how (or in some cases if), DAB should develop. Indeed, even within commercial radio there’s been some disagreements (and the occasional curve-ball like Fru Hazlitt’s toys-pram incident earlier in the year).

The purpose of this interim report is to show:

  • an agreed vision for the future of radio in the UK;
  • a number of interim recommendations for Government, Ofcom and industry to consider;
  • an outline of future work; and
  • to provide an opportunity for wider debate on the initial findings of the DRWG.

The fact that the group themselves have all agreed this is bigger news than anyone will pick up on. It shows a united ‘radio’ (in its broadest terms) approach to the future.

So, what have they all agreed then? Well, this…

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Radio is two inter-locking zero-sum games

The first is audience. 90% of the UK’s population listen to the radio each week for 1billion hours in total. This is an amazing figure, something we should be more proud of, but also recognise that it’s something that’s unlikely to go up. It is difficult to actually cram any more radio into people’s ears.

The second is revenue. All UK radio revenue has been around £600m for the last 8 years and that’s unlikely to massively change anytime soon.

There has always been the hope that if you grow your audience at the expense of the BBC then you will be growing the commercial radio industry’s share of the advertising market. This theory, however, is somewhat unproven. However, if you win audience at the expense of other commercial radio stations you can at least get some of ‘their’ money to add to your own. At the same time you can try and get better at selling. What has been proven is that you don’t necessarily need to increase your audience to increase your revenue you’ve just got be better at striking a deal.

It is no great surprise then to see where we are.

Now the problem with the theory outlined above is not that it’s necessarily right, it’s just that it’s difficult to disprove.

And it means that there’s no great surprise in seeing what GCap did last week. If you missed it… GCap announced some changes to their One Network of 40-odd radio stations. They have decided to network the 10am to 1pm show and to replace/relaunch the network shows from 7pm to 1am. Across the weekends they’ll now just be one daily four hour local show, the rest will take the network.

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All Change!

What a week in radio! Virgin Radio’s been sold to TMIL/Absolute and is up for a name change, XFM South Wales has been sold to Town and Country and instantly reborn as Nation Radio and now Planet Rock has been flogged to an individual – entrepreneur Malcolm Bluemel. Wow.

In my mind, it’s all good news. The changes mean the birth of two new operators and the strengthening of an existing smaller local radio group. They’re also all stations that have previously been owned by big groups who, some could argue, had lost interest in these stations. The new owners are going to be much more engaged in driving these businesses forward and I think the knock on will be positive for listeners. In addition all the stations broadcast on DAB Digital Radio and it’s great to see some more diverse ownership of digital radio services and commitment to the medium.

It also shows the continuing move of radio stations to operators who are privately rather than publicly held. Global Radio, Bauer Radio, GMG, Lincs, KM, TMIL/Absolute, Tindle and Town and Country are all private enterprises, leaving pretty much UTV and TLRC the only publicly held radio companies left. Primarily this means that the only people that need to be troubled by quarterly performance are the companies themselves and not the stock market. The hamster wheel of financial reporting has probably done more to damage radio than anything else in recent time. This is now gone.

It’s also good to see the final disappearance of the ‘old guard’ – people like Ralph Bernard, Fru Hazlitt, Tim Schoonmaker and Phil Riley. In their time they all saw through massive changes to the industry, but now we face a new challenge that of true multi-platform competition and the digital future, it’s good to have some new people on the top table.