Radio Changes and MXR

Radio in the UK has only recently been affected by significant change.

The original regulatory environment  created fixed formats, ownership limits limited expansion as did analogue frequency availability. At the same time the might of the BBC (and their ability to sit on lots of analogue spectrum) gave commercial radio little room for maneuver.

These commercial constraints kick-started DAB. In the 90s and early 00s there were a number of very competitive radio groups – GWR, Capital, Chrysalis, EMAP, Wireless Group – who were keen to expand. They were limited with what they could do on analogue radio as there were limits to how many points you could have. This basically stopped the rise of groups with any real scale. However, in the late 90s most of the groups were listed on the Stock Market and needed growth.

GWR, in particular, saw DAB as a way to leap up the charts and own more ears. When the opportunity to go for the national commercial multiplex came up they jumped at it. Initially due to be a three-way party with Virgin and Talk Radio – the take-overs by Chris Evans and Kelvin Mackenzie however soon put an end to that and GWR got together with NTL (now Arqiva) to put the bid in.

The rest of commercial radio was fairly lukewarm as well. This started to change, particularly as groups realised they may need to defend as well as attack. Local multiplexes in home territories (like Bristol for GWR or Kent for Capital) started to become key things to win. Capital, Chrysalis and GMG were suddenly a bit more concerned about GWR’s ownership of Digital One and wanted to get both platforms won and services launched, so regional multiplexes were suddenly on the agenda.

The regional multiplexes were mainly scooped up by MXR – a combination of Chrysalis (with the Arrow, Heart and Galaxy), GMG (with Real and Smooth), Choice (with Urban Choice) and Capital (with Capital Disney) alongside UBC (data), Jazz, Ford and Psion. A nice balance of bigger and smaller names and something that would be good for competition from GWR and EMAP’s local networks and GWR’s Digital One.

For listeners this was good – lots of services and competition. This plethora of stations and the under £100 Evoke helped give DAB a kick-start. It also raised the beast of the BBC who suddenly decided they really should have some new stations too and Networks X, Y and Z became 6Music, BBC7 and 1Xtra.

Fast forward and at first glance it looks like we’re going backwards. Those five MXR regional multiplexes are closing with some stations moving to local multiplexes and others coming off DAB as they can’t find any room on the local layer at the right price. All bad news for DAB? Well, not really.

The big reason this is happening is consolidation. If we take a look at what was on MXR …

  • Capital (was Galaxy owned by Chrysalis, now Capital owned by Global)
  • Heart (was owned by Chrysalis, now Global)
  • Smooth (was GMG and duplicated on Digital one, now Global)
  • LBC (was owned by Chrysalis, now Global)
  • Choice (was owned by Soul Media, then Capital, now Global)
  • Real Radio (was GMG, now Global)
  • Real Radio XS (was GMG, now Global)

…and then bits of XFM (now Global), Gold (now Global) UCB, Panjab and a couple of other stations.

MXR worked well when there were competing operators at the height of their financial success trying to build their businesses. Now, the world has changed significantly with just Global and Bauer as the big boys – they’ve got lots of brands but they focus on fewer. Suddenly some brands have graduated to Digital One and there’s room on the local multiplexes for the other key ones. This means the big boys save money and focus their efforts where the audience is.

In an ideal world new entrants would have popped up on these regional multiplexes and usually when a gap has appeared that’s what’s happened. Unfortunately so much capacity being available at one time would make it difficult to find enough solvent operators to pay for the transmission bills.

I think it’s a shame that the opportunity that the regional multiplexes provided has disappeared. However, I’m also happy about what their demise means.

Firstly their frequencies are being used for a re-plan of local coverage – this means that reception of existing local multiplexes will be stronger and some get to grow into areas there wasn’t already coverage.

Secondly – more service providers on the locals means they’re better businesses and can afford to roll-out further coverage

Thirdly – this sets us all up for another go at a second commercial national multiplex.

Really that’s the big change UK radio has seen. The rise of the national brands and their strong RAJAR performance. The ability to broadcast nationwide (just like those BBC stations) often with well-regarded brands has grown listening and listener-choice. It’s also simpler for listeners and much more cost-effective for large radio groups with well-funded national sales houses to be truly national rather than sitting on a patchwork of local coverage. At the same time, the stations that feel there’s a great opportunity to generate revenue locally have local multiplexes to often expand from their smaller radio roots to inhabit.

Digital One is now fit to burst. When I speak to people at Bauer or Absolute about their services they would all like a little more room for their stations.

So, with (in the main) local stations and regional networks getting improved coverage on the local multiplexes and a full national multiplex, it’s clearly the right time to release national spectrum for more new national stations.

Back to MXR – their West Midlands multiplex has just come to and end, so I wanted to look at what that means in the market. Is the new status quo going to disenfranchise people? So I’ve made a little chart.

West Mids

I’ve tried to look at the regional RAJAR (when they’re on it) for local/regional stations and the new national DAB stations and compare their DAB audiences.

What’s striking is that it’s the stations on the Nationals and Locals that do well. Listeners are comfortable with their local stations that have been around for years and they clearly like the new national choice.  I think what is interesting is that the MXR stations that do well have found a new home and it has tended to be the poorer performing stations that have left DAB. Choice and LBC’s disappearance will be mourned by very few. It will be interesting to see whether Radio XL stays off local DAB – I would imagine they’ll find a home. Real XS is clearly in an odd place at the moment and was not even RAJAR’d in the West Mids. It’s disappointing for UCB’s two spin-offs (though they do have national capacity for their main UCB UK).

I think it’s a shame that anyone loses their favourite stations, however, the benefits of the disappearance of this and the other MXRs do probably outweigh the losses.

Media works best when it’s flexible. The regionals were the product of a different time, It’s right that we evolve and change for today’s listeners and providers.