2014 Radio Predictions

Crystal Ball

It’s a terrible idea to make predictions.

I often flick through the rest of my blog and see how wrong I’ve been about lots of radio things. It’s really amazing that any of you bother to read what I write.

However, predictions are fun. They also probably give you more of an insight into how it looked like it was going to go and what you were thinking.

And sometimes it’s good to put your money where your mouth is.

Do leave your own predictions in the comments below too.

Global

To meet the terms of the Competition Commission Global have announced they’ll make more  announcements about the stations sale in February.

  • The majority of these stations will be sold to one company
  • That it’ll be a new entrant
  • That they’ll keep as many stations that they can so they’ll own the majority of a UK-wide Heart network and and England-wide Capital network.
  • However, the vast majority of stations that will be acquired will choose to continue franchising Capital, Heart and Smooth from Global.
  • The franchise model will work quite well and they’ll sign similar deals with other radio stations by the end of the year

Bauer

I think 2014 might be the year of Bauer with lots of changes and developments in the group.

  • They’ll keep Absolute as a brand, but all the spin offs will disappear
  • Magic will go nationwide on Digital One, but will have a big refresh
  • One of the Kiss branded stations will go on D1  as well. Kisstory would do well, but Kiss Fresh would put extra pressure on Capital.
  • We’ll see networked mid-mornings across the Place network (probably one for England, one for Scotland)

UTV

  • The sport business – talkSPORT/Sport Mag/Web etc – will be separated from the rest of UTV.
  • They’ll launch a digital-only station

Radio 1

  • They’ll be big changes to the breakfast show. Not necessarily a replacement of Nick Grimshaw but an alteration of the dynamics of the programme.
  • It’ll have a tough year with RAJAR as they try and get Breakfast right.

Other thoughts:

  • Digital 2 will be a very competitive bidding process and they’ll be at least three bidders.
  • 6Music will have a bigger reach than Radio 3
  • Radio 2 will add a female presenter to the daytime line-up
  • We’ll have a scandal at Radio 4. In between the pips.
  • Digital radio will continue to get a bad press but share will edge up to 44%.
  • 80% of new cars will have DAB as standard
  • There will continue to be no successful/business-like internet/mobile radio stations
  • Celador will acquire at least 10 new stations
  • The BBC’s Playlister won’t have captured users’ imagination
  • We’ll see a pop-up station from the BBC.
  • They’ll be some more tests of the new DAB mini-muxes

What are your predictions?

Picture from Mo.

Phase 2 of Digital Radio in the UK

On Monday, Ed Vaizey, the communications the Minister will take part in the Go Digital event at Broadcasting House in London and make some announcements about digital radio. If the papers are to be believed, he won’t be binding the Government to a switchover from FM to digital – but then he wouldn’t be the first politician to alter their direction of travel with an election coming up.

What he will talk about  is the kick-off of another round of changes that alter the direction of radio. In truth, it will bring together many of radio’s factions and bind them around a plan to suit how listeners have changed how they now listen to radio and consume media.

It will also provide a unique get out clause for some in the industry to take. It will unshackle them from big radio’s ship and let them go their own way.

Phase 1

Digital Radio was born out of frustration and competition. Not by listeners, but by industry. Six competing radio groups of similar sizes wanted to be able to grow and get around the limitations of the regulated world they existed in. The largest, particularly the Capital Radio Group, were quite happy with the status quo – whilst those with something to gain – mainly GWR – was keen to push to a digital world. Like all technology you over-estimate what the short-term will deliver and under-estimate what will happen in the long term.

Digital Radio’s growth was slower than anticipated. But then again, the radio industry had never really launched a new product. Their other attempts at diversifying – restaurants, online music streams, shopping portals, local websites – fared even worse.

The commercial national multiplex and Planet Rock, the local multiplexes and expanding footprints of brands like XFM, pressured the BBC to follow suit. Strategically this digital explosion would affect their stations and the value they delivered listeners. Their answer was Networks X, Y and Z – Radio’s 1xtra, 6Music and BBC7. EMAP, a magazine company with brands and access to spectrum then pressed the button on music radio and TV services delivered on Freeview and local DAB – Kiss, Kerrang, Magic, Mojo, Q and Heat.

The demand for multi-platform expansion conjured up a new national multiplex and a new entrant – Channel 4. C4 realised that it needed to be a multi-media entity and with strong commercial success ‘doing some radio’ didn’t even seem that complicated or expensive. Their fall from grace was driven by two things. First was the economic crash, the second, rarely talked about, was the existing radio industry’s desire not to play ball. A strong new entrant was not something that radio (commercial or BBC) really wanted, and behind closed doors they decided to give the new boy a particularly hard time. This frustration and the economic change, made C4 pull the plug.

This wasn’t the only corporate activity that was changing radio’s direction. Over a few years Tim Schoonmaker’s departure from EMAP, Fru Hazlitt’s desire to ‘save’ GCap, Digital One‘s pricing model, consolidation across the sector and the arrival of Global and Bauer alongside a massive economic collapse certainly re-aligned everyone’s views. Trendy multi-platform was out – sticking to the knitting was in.

However, one thing the industry chose not to pay attention to, was the change in how people were listening to the radio. Slowly but surely consumers have expanded the number of stations and platforms they listen in on. The UK leads the world in digital listening – with half of consumers now listening on a non-analogue device. Each week over 11m people make time for new stations not on the AM or FM dial.

Post-economic slump, the one group that was watching the changing behaviour was Clive Dickens and the team at ARI. Clive left Capital in 2000 and spent much of his time outside of radio and the UK. A combination of external new media consultancy and a few UK radio projects (Juice, FM107.9, Jack) gave him a slightly less-jaded perspective than a lot of radio who had been somewhat stuck fighting it out in the trenches over the previous decade.

With Virgin Radio up for sale, ARI had been working to acquire it. With the financial terms tough to achieve, they ended up fronting the Times of India’s bid for the station. With some money to play with and an asset with audience, Clive and the team worked to deliver their own vision for what they saw of radio’s changing audience.

Absolute did lots of things – but the success of their decades stations – particularly Absolute 80s – is where they had the biggest industry impact.

Up until then, everyone had launched new brands. But with no marketing, they  found it hard to gain traction with listeners and enthusiasm inside their businesses. Robbed of resources or sales focus, many languished.

For Absolute, the decades stations was an attempt to solve a problem – declining hours and revenue – and an expensive main operation. With digital listening growing they thought these services would be a cost-effective way to bolster hours. They were right. They’ve nearly doubled the group’s hours. They also aggressively sold the hours as a network with their main station. The stations continue to generate cash for the business. Without them, the company would have lost more money.

Up until this point the new Global Radio was not enamoured with digital radio. With an eye for a monopoly, the failure of digital radio, would have left them in an even stronger position. But it wasn’t just Absolute’s success that changed their mind.

The BBC was faring somewhat worse. Whilst 1Xtra and BBC7 were doing okay, 6Music’s cost per listener hour was just too expensive to continue. Spending £6m a year on something generating 500k listeners wasn’t good public service business. As we know, its threatened closure gave it radio’s best ever marketing campaign, supercharging its audience on the way to 2m, suddenly meaning its cost per listener hour was good value.

6Music and Absolute 80s successes were being observed elsewhere. With Global having rolled out Heart and Capital across previous local FM licences, they also picked up spare spots on mutliplexes up and down the country. Suddenly these ‘out of area’ and digital hours made up a growing part of their business – from 15% when they acquired GCap to over 30% now. Suddenly it wasn’t a nice to have, it was essential and even opened up a way to consolidate their lead even further.

Global’s rising scale and their announcement last year of a Real and Smooth acquisition suddenly meant Bauer had to do something before they ended up a far away 2nd place in the market.

They needed new hours, fast. So they acquired Planet Rock, Absolute Radio (and all of those spin offs), pushed Kiss national on DAB for the first time and launched their own spin-offs with Kisstory and Kiss Fresh.

All of the commercial groups had realised that digital had meant consumers were broadening their listening. They no longer needed to make them abandon Kiss for Capital or Heart for Magic, as  the playbook for the last two decades had instructed. Instead, if they had the right brands in the right places they could start to grow again by chipping away at competitors’ hours.

Nearly 20 years after Ralph and co. at GWR thought digital spectrum would let them expand, it turned out it was the changing consumer behaviour (driven by platform growth) that would allow commercial radio to expand (and the BBC to provide popular services for licence fee payers).

Monday’s announcements

The change in the big groups’ attitudes has been driven by consumer take up of digital radio – 56.7% of listeners tuning in digitally every week (reach) and give 35.6% of all of their listening (hours) to digital radio.

Whilst digital radio consumption continues to grow, it does so steadily, rather than explosively.

If take-up speeds up, then it means the BBC and Commercial Radio will pay less for transmission but it also means that radio consumption will stay high. Digital listeners listen longer because they have more choice and enjoy radio more. This is good for the industry and good for commercial radio’s business model.

So to accelerate it, there needs to be further carrots. We’ll see these in the form of the Government/BBC/Commercial Radio jointly funding the further roll out of local digital radio transmitters. It also seems that we’ll see the advertisement of a second national multiplex and therefore more national stations. I also imaging we’ll see a renewed focus on marketing, particularly with cars.

FM switchover

What we won’t see, is the ‘stick’ of any firm news about FM switchover.

I think this is a shame. Some further certainty about the end of big stations on FM would have focused the mind of manufacturers, stations and listeners and digital take-up would have accelerated. Just as it did with Digital TV.

It would have forced the industry to sort out a plan for migrating all commercial stations to digital and would have meant a plan for community radio to get hold of some more FM licences.

I’m not really worried about the bigger stations and the BBC. They have seen which way the wind is blowing and have adjusted their sails accordingly.

Who I feel sorry for is the smaller radio stations.

To start with, I’m sure Monday’s announcement will be a huge relief. If your business is really just an FM licence then suddenly it will seem like you’ve got a little more breathing room.

However, what I really think, is that it’s the beginning of the end for you.

However uncomfortable an FM switch-off may have been, at least it would have forced those stations to develop a plan for the future. Now what will happen is mainly nothing.

Already stations like Wessex FM, Wish and The Revolution have faced hours competition from stations on DAB, DTV and Online and struggled with an on-air product optimised for analogue days. These stations now have little radio hours growth opportunities and their lack of investment in a modern website, mobile strategy or any broadening of their businesses will leave them in a precarious position.

But maybe there’s still time for them to change? Perhaps. However based on past experience I’m not so sure.

Groups like UTV and UKRD seem to have parallel strategies in their business.

UTV have an amazing cross-platform brand around sport – talkSPORT, Sport magazine, a huge and mobile-friendly website as well as an exciting international business too. I’m less sure about their ILR division – where is their growth? Simulcasting some of their stations on DAB and online is good – but what else? What about the stations that don’t even have that?

It’s a similar situation for UKRD. I think what they’re doing in Surrey is totally the right thing – a simulcast of their successful Eagle Radio and building on that with a new service – Eagle 3. If they can do locally with audience and revenue what Absolute did nationally – then they’ll enjoy significant success.

But what about the other stations? What happens to those stations marooned on FM with shonky websites and middle of the road formats?

For many of those stations, there isn’t currently a digital broadcast route for them – which is a real shame. Unfortunately by there not being a switchover announcement they’ll likely lose the impetus to fix that.

I also imagine that from an investment perspective, the stations without a digital future are likely to suffer in these group’s investment rounds. Why invest in stations that don’t have a digital future when you can re-enforce the ones that do?

Phase 2

Phase 2 is great news for listeners – it does everything they’ve asked us to do. It re-enforces coverage of local and national DAB and it will give them more stations to listen to.

It’s also great news for the BBC, Global and Bauer – it’s a plan they all agree on that will drive digital hours and give them more opportunities to grow.

For many, Phase 2′s protection of FM will be a ‘good thing’ – both for listeners who find that platform performs better for them and for stations  who have it as their only broadcast platform.

Consumers

Radio is, and always will be, consumer-led. The reason the industry gets so flustered about digital, is that they’re trying to re-calibrate for how consumer behaviour is changing.

Nearly everyone in the industry would love it if listeners just stayed listening to FM. But listeners don’t want just FM. They want more. 6Music in the car, Capital in Liverpool on DAB, to listening to their old favourite from home on their smartphone or just tuning in to their local breakfast show on FM.

If you work for a station that doesn’t really have a decent website, isn’t the market leader in radio and who’s future is seemingly only FM, ask the boss what the plan is for dealing with all this changing consumer behaviour.

Me? I’m excited about changing consumer behaviour. It means we move on, evolve, do something new. It means we can re-think things we’ve always done, it opens up new opportunities, makes us stop and think,  and above all it means what we do stays being fun.

Update: An update from Adam Bowie on today’s announcement.

The Mirror’s Ampp3d and UsvsTh3m

Today’s the second recent new media launch for The Mirror. Ampp3d is following hot on the heels of UsvsTh3m.

Ampp3d, according to their Facebook page is “a topical, data-driven site from the Daily Mirror, making journalism more accessible through data visualisations”. Whilst UsvsTh3m makes “toys, games and quizzes”.

UsvsTh3m has been a real success. I’m not going to explain how and why it works, as Martin (who created it) has written a great post all about it here. Short version – starting from scratch, using a very light team and little corporate interference, they’ve created a new site that’s generating 7m users a month. This is particularly driven by very topical, funny games. Also, unlike newspapers where all the traffic comes from SEO, their traffic comes from social sharing. Only downside, their focus has been on audience rather than revenue, which mean’s there’s no monetisation in it currently. In my mind totally the right thing to do – I’d rather have a site up and launched with 7m users than one stuck in corporate hell, with no visitors, but a revenue plan.

What I  find interesting is how Ampp3d’s an evolved version of their first launch. Whilst, I’m sure this is partly demographic, it’s notable that:

  • The site runs off WordPress rather than Tumblr (less native virality but much more control)
  • It carries Mirror branding (on site and in the URL)
  • It carries banner ads from the start

Whilst I’m sure that banners aren’t really its main plan for monetisation – I’m sure that’ll be good old native content – getting them in early at least means you can decide whether to keep them later. Banner positions are also handy if you want to skin in sponsors of sections and such later on. Introducing commercial units later on can disappoint users – it’s good to set some expectations early.

The Mirror branding is probably confidence more than anything else. The first project was launched in 6 weeks, with a “if it doesn’t work in three months we’ll close it” attitude. At that point it was probably wise to distant itself from The Mirror. Now there’s more confidence and potentially a slightly less edgy proposition, it makes sense to add the branding for Ampp3d.

Hindsight’s clearly a wonderful thing, but I wonder that if they knew how much of a success UsvsTh3m was going to be, whether they would have changed any of the branding/monetisation decisions?

The best part of this story though, is look what can be achieved when a corporate finds good people and lets them get on with it. Plus the support you give them is the stuff your company’s good at – in this case The Mirror’s picture desk and duty lawyer!

People are Quite Happy with the Radio Services They Already Have

I was disappointed to read this article in The Guardian today. I was disappointed not because of their argument and position – which is one they’re perfectly within their right to argue.

What was a shame is that they’re choosing to skew the debate by making assumptions on behalf of “their” listeners. In the piece Scott Taunton says as part of the justification to not have a radio switchover says: “The bulk of people are quite happy with the radio services they already have.”

I, personally, as someone who’s created a new radio station, find that particularly disappointing. Having talked to other digital-only operators on multiplexes up and down the country, I know that I’m not the only one. I also think it underestimates listeners. If there’s one thing that’s surely arguable over the last twenty years it’s that consumers are after more choice!

So rather than emotion or assumption, I thought it would be useful to look at some data.

In the article, it states the coalition of the unwilling have the 6m listeners of UKRD, TLRC, CN Radio, Anglian Radio, Quidem, Celador, UTV stations (I think there’s Media Sound and Q alongside them too).

All radio stations are guilty of thinking because people listen to them that they are ‘their listeners’. Actually these 6.4m people tend to listen to quite a few radio stations. I therefore thought it was useful to look at these people’s broader listening habits.

Firstly, these 6.4m people listen to 152m hour of radio – 50.2m of which they spend with one or more of the ‘Unwilling’ stations – which is quite a lot – a third share is impressive.

However, they also give a little more – 51.9m of their total hours – to digital radio listening too.

Indeed, 3.9m of them (60.9%) listen to some form of digital radio each week – higher than the national average which is 56.7%.

1.3m of them also listen to one of the main digital-only stations – the Absolute 80s/Kisstory-esque ones (this even excludes listening to big stations like Capital, Kiss, Heart etc out of their analogue area).

That’s 1.3m who I would wager aren’t 100% happy with the analogue stations that they get.

Digital radio switchover is definitely going to be difficult, just as digital television was. Here are some choice cuts from the Daily Mail on that process: “Digital TV No Way Says One in Five” and “More than half of TV’s Can’t Get A Digital Signal“.

I do believe that there should be a digital route for the vast majority of analogue radio stations, not however at any cost. However, an in-depth analysis of the pros and cons of switchover is for a much longer blog post.

What I would say is that these 1.3m people I talk about above (and the 8.7m in that category across the UK) have already decided that analogue-only stations are not the only choice for them.

Radio 1 vs Twitter

Some interesting data popped in my Twitter feed today from IPSOS MediaCT – the people that do the fieldwork for RAJAR – all about social network use in the UK.

Here’s their infographic.

I thought it would be interesting to look at Twitter’s demographics and compare them to BBC Radio 1. Warning – methodology clearly different. However, it turns out that they’re very similar.

Looking at reach – Twitter’s got 17% of the UK, Radio 1 has 20%.

Then when you look at which ages make up each of their audiences, here’s how they stack up:

Twitter Radio 1
15-24 38% 32%
25-34 26% 27%
35-44 19% 19%
45-54 10% 13%
55-64 8% 5%

I don’t particularly have a lot to say about it, but thought it was interesting how similar they looked!

How Well Do You Know Radio? Manchester Edition

In lots of the presentations that I do at radio stations and conferences I often use data to challenge pre-conceptions. We are all sometimes guilty of projecting our own thoughts and experiences and assuming that everyone must think and do the same things. The good thing about data is it can strip out our own prejudices.

I had an interesting Twitter conversation with James Cridland and Phil Riley about digital listening. I was looking at some London RAJAR and it turned out that ‘digital listening’ (that’s DAB, DTV and Internet) was bigger than all of the listening of Radio 1, 2, 3, 4 and 5 combined. Which surprised me a bit. Phil and James thought that using London as an example wasn’t representative of the rest of the country and James felt Manchester would be very different.

As I had run a load of Manchester data, I thought I would share it here. This chart is quite different to many that I run as it combines many different things. It looks at total hours to the main stations in Manchester (Key 103 TSA) but it also adds in total platform hours and listening location hours too (all Q3/2013 data).

Things I found interesting:

  • DAB listening is larger than any radio station in the area
  • Indeed it’s larger than Radio 1 and 2 combined
  • …and bigger than all in-car listening in the area
  • At home listening (on its own) is bigger than all analogue listening
  • Internet listening is bigger than Radio 1
  • 6 Music has more hours than Real Radio
  • Absolute 80s is bigger than Absolute Radio
  • Five Live is bigger than every local station except Capital
  • talkSPORT is bigger than Classic FM

Manchester Hours

 

Choice FM Becomes Capital Xtra

Looking at my referrer logs for the blog I often get searches for people asking “Why did x station become x” or “Why did x station close”. So I thought it might be (mildly) interesting to look at Choice FM’s change to Capital Xtra in that context.

Choice was well liked and had a good, different history as one of the only black-owned stations. Even after being subsumed into the Capital Radio Group it retained a (relatively) good connection with its first community.

Historically Choice was stymied by its two frequencies – two lower powered licences rather than a London-wide frequency that the other stations have. I remember when I was there I did some analysis that showed how in the postcodes you could actually get it, it would often do better than Kiss. I also know that before GCap, the Capital Group looked at what the benefits would be of swapping frequencies with some of its other London brands. In other words, was it a potential sleeping giant – particularly as a more urban market had opened up as Kiss had (albeit very successfully) moved into a more mainstream format.

There was a national idea of Choice with it broadcasting Urban Choice (a voicetracked spin off version) on the MXR multiplexes (that it was a shareholder in) which later merged into a Choice simulcast that came off the air in the last few years.

It’s national audience though never really hit the numbers the format deserved. This was partly because of Galaxy’s (then) existence, the rise of 1xtra and the fact there had been no real out of London marketing.

I imagine the Choice brand and heritage also didn’t always make it a mainstream buy for advertising agencies. It probably didn’t get on as many schedules as it should, and probably at a lower value too. No matter how hard you try, some brands just don’t get the national agency resonance. This, ultimately, is why Galaxy re-branded as Capital too.

From an advertising angle, a re-brand to Capital Xtra means agencies will understand it better – as they already understand the Capital position. It’ll also end up on more schedules as I imagine agencies will buy a ‘Capital All’ which will be spots on both services.

The other reason Global have done this is Bauer.

There’s no love lost between the two organisations and they’re very competitive. Bauer’s new national strategy has spooked Global at the same time as their own M&A is mired in the Competition Commission. Global wanted to be the ‘national brand’ company – but suddenly Bauer’s distribution of Kiss, Planet Rock, Absolute (and Absolute spin-offs) nationally on D1, was vast compared to Global’s Classic and (now) Smooth. Heart and Capital have good coverage – but it’s not very national – that’s what the GMG acquisition was supposed to fix. The extra Absolute spin-offs also potentially provide more capacity to be re-purposed for other Bauer brands, Magic perhaps, if it’s what Bauer wants to do. Bauer are clearly on a journey to have their key brands nationwide.

Additionally, Kiss and Magic continue to do very well in London, stopping the Global brands from having consistent market-leading dominance. Clearly, the new Smooth will aim to give Magic a bit of a kick, but it’s also Kiss that needs some knocks to make Capital more dominant.

The close nature of the London market means that you don’t need to lose that much audience to give market-leadership to someone else. Half a share point off Magic and Kiss will give Heart and Capital a real boost. It doesn’t matter of course where that half a point has gone to, just that it’s no longer with Magic and Kiss.

A Choice re-boot, re-brand and marketing push has the potential to do that to Kiss. With Capital and Capital Xtra nationwide, grouped and sold together it will also look a strong nationwide sell when compared to Kiss nationally on its own.

With Smooth becoming the Magic that Richard Park created ten years ago, Global have the chance of a pincer movement to disrupt Bauer’s success in London.

The other competitor is 1Xtra. It’s had a great year, now regularly over 1m listeners. A more populist version will have a good opportunity.

Finally, in any company, having less brands means its much easier to run. Subsuming Choice into the Capital family makes it easier to do more and re-enforce each other. There aren’t that many people at Global – this is commercial radio after all – so having the resources concentrated on less people is a sensible thing to do.

The radio industry is, more than ever, in a state of flux. This is primarily driven through consumer change – listeners are tuning into more stations across more platforms. This brings new opportunities for some and significant issues for others. Global themselves have grown their business through assimilating assets and redeveloping them to generate both significant financial returns and to better position the stations for the future. This growth is particularly driven by deploying change on a large scale.

A Choice re-brand has been in the works for months, I think I first heard about it in July. The interesting thing is not the re-brand (they’re easy), the clever thing is changing the nature of the station by making it a new national opportunity. This is something they could only do when they integrated Smooth, as it released capacity on Digital One by closing Smooth 70s to deliver on that vision.

It’s also the first real signal about Global’s position on a digital radio future.

The easy thing to have done would have sell-off some excess digital radio capacity – there’s plenty of demand after all. Instead they’ve chosen to invest in one of their brands, expand the footprint and try and build a true digital radio station. I think it can also be read as an acknowledgement that digital has become an important battleground- one that you can use to beat your enemies as well as new ground to colonise and develop.

 

 

 

Internet Radio vs Broadcast Radio

Some people have the view that radio over the internet is the future for the industry. I’m a big fan of listening to radio online, but as a (digital) broadcaster, I know that the economics mean that if I ran my radio station (Fun Kids) as an online service it wouldn’t have the number of listeners necessarily to pay for it to be any good. Indeed, I don’t think I could even cover the music licensing costs.

That’s why having broadcast and the internet is the best of both worlds – I get a large audience through the air and that’s enhanced by my streaming and online activities.

My friend James has explained this all much better in a presentation he did recently at the IBC. It’s only 15mins and well worth a lunchtime watch.

Your Radio Listeners at Home

Ofcom, this week, released their annual Digital Radio report.

When I looked through it I was quite pleased with it. Press coverage has been less than friendly emphasising a decline in DAB set sales. I read the data slightly differently. I read that set sales were pretty flat, we sold around the same this year as last year (another 1.9m!) but that radios that were analogue-only took  a big hit – selling a million less than the previous year – but still a lot.

But, to be honest, I think there are so many things that have a knock on to what people buy that you can probably argue strongly either way that this is good news for DAB or terrible news.

As most radio listening is in home – 63% of all listening happens there, whilst only 21.2% is in car and the remainder at work or somewhere else – I thought I’d look particularly at in-home listening. It’s not something I had done before.

The big shock for me was reach.

So, radio has a 90.8% reach in the UK.

In home, radio has a 76.3% reach. That means 76.3% of the UK population listen to the radio, in some form, at home in an average week.

I thought I’d then look at ‘Total Analogue’ and ‘Total Digital’ reach.

The result is that analogue radio (AM and FM) only has a 51.7% reach in homes.

So only half the country, in radio’s most-popular location, during an average week, listen to ANYTHING on AM or FM.

I was quite surprised by this, I always assumed that analogue radio reach was going to remain relatively high through to digital switchoverm even if the volume of consumption kept dropping as people started to listen to more digital radio. After all, surely most people will hear 5 minutes of radio from an analogue set at some point in a week? At the moment when we look at total analogue reach in every location it hits 81.5%.

When we look at the percentage of the UK who listen to some form of digital radio, at home, in a week it’s 46.1%. Just 5.5 percentage points lower than analogue.

What does this mean? Well, if you’re a predominantly analogue-only station (ie not on DAB or DTV) then you’ve only got a potential audience of half your TSA. Half. And it’s getting worse.

Now, clearly this isn’t the same in-car. Digital radio only has an in-car digital reach of 11.7%, whilst analogue is much stronger, having a 58% reach of the UK population.

Though I’m sort of surprised total in-car listening is that low – 37.7% of the UK population never listen to the radio in a car at all. Sacrilege!

As we approach some switch-over announcements, people with vested interests (of which I count myself) are going to be saying lots of things. To me, the most important thing is looking at what listeners are doing and how their use of the radio is changing.

As a station owner I will go where the ears are, on platforms I can get access to or can afford. DAB, Internet, DTV, whatever reaches the most people in the most cost-effective way, my stations will be there. There’s nothing particularly wrong with FM – if you’ve got an FM licence, of course. It’s still a big platform – though as the data shows – it’s one that’s getting significantly smaller each quarter.

Platform Reach

 

 

 

 

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.

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