A whole new vision for UK radio

Michael Hedges May 5, 2008

There needs to be a white paper, followed by a green paper. The first quarter audience survey arrived granting the BBC its highest market share in recent memory. Oh, digital radio is not dead and buried. The listeners have spoken.

Radio listening keeps growing in the UK, according to the RAJAR – Radio Joint Audience Research – survey, released last week. Total radio listening increased by a full percentage point, to 90% of the UK population, despite a somewhat mysterious drop-off in Scotland. It might have been the weather. The survey covers persons 15 years and older in the UK during the January – March period. Radio listening was up, digital radio listening was up and listening to BBC radio channels was up. Up, up, and away! 

For BBC radio, and soon to move on Director of Audio and Music Jenny Abramsky in particular, the winter quarter RAJAR survey results reinforce a winning strategy: do what you do best, forget the rest. Vast portions of UK radio listeners are like herring, they swim in schools, get caught in big nets. Of all stations and channels surveyed, 80% of radio listening in the UK is to incumbent, analogue radio.

In the national survey BBC radio’s market share reached 57%. Radio 2 reached a 16.5% market share, up from 15.8% year on year and its highest market share in five years. Radio 4 placed second in market share, a 12.2% share, even with its result in the first quarter 2007, also its highest market share in five years. Radio 1 placed third with a 10.6% market share, up from 10.1% year on year. The channel has not been below double digits in five quarters.

BBC sports and talk channel Five Live is now solidly in fourth place in the national channel rankings with 4.6% markets share, up from 4.2% one year on. The only BBC radio channel to post a significant loss was Radio 3, down to 0.9% from 1.2% year on year. BBC World Service was down a sliver but none of the other BBC radio channels; largely the DAB channels, lost audience and most gained a sliver.

Results for the national commercial channels were, well, revealing. Predictably solid Classic FM dropped to a 3.7% market share, the first time below a 4% share in five years. Virgin Radio was unchanged, year on year, at a 1.4% market share and talkSport lost a sliver, down to a 1.9% share from 2.0% one year on.

The winner for commercial radio in the national poll was GMC’s Smooth network, up to 2.1% share from a 1% share, pre-format change. The Hits and Planet Rock, both DAB-only channels and far down the list of national rankings, showed audience increases.

And it’s the digital radio platforms – from DAB and internet streaming to TV set-top boxes to mobile phones – that are reaching the tipping point. One in six hours of radio listening were via a digital platform. DAB listening accounted for more than half of the weekly reach of all digital platforms; 17.9% for DAB, 31.4% for all digital platforms. Digital reach has increased 1.5% per quarter since the autumn survey, the first to note audience reach via platform. And DAB receiver ownership is up by 500,000 units in the first quarter 2008.

The figures show ‘modest’ increases for digital stations and channels. Less mentioned are the 100 or so local and specialty DAB-only and internet-only channels on the air in the UK, a veritable smorgasbord of programming. Something is driving continued sales of DAB radio receivers.

Of course, herein lies the opportunity for the commercial broadcasting sector. Certainly, more calls from the marginally informed will be heard for privatizing Radio 1 and Radio 2.   It’s a leap of logic, not to forget intellect, to believe that either channel falling into private sector hands – or merely taking them out of the BBC’s hands – will have the same reach. Adding 9 or 12 minutes of really bad ads per hour would make a difference, noticed by listeners. Dispel that notion. And, too, forget moving any of the major BBC radio channels to DAB-only… yet. Ask me again in five years.

More than ever, commercial radio thrives – so the figures tell – as either background or hyper-local, niche programming. The Smooth network nearly doubling its market share in a year and the seemingly permanent ascendancy of Heart and Magic to the top of the London ratings shows how listeners differentiate between big commercial stations (low content) and the BBC (high content). The more enduring competitive advantage for commercial radio is being hyper-local or hyper-special, the places where the BBC (mostly) cannot go. The big owners hate this idea because it sounds expensive. But, serving the listening public trumps the interests of a half dozen rich guys.

UK broadcast regulator OFCOM has within its mandate, if it so desires, the ability to change forever the competitive landscape. If it does not, there’s a risk that the whole of UK radio will become just like Swedish radio. UK commercial broadcasters have called for rule changes, but only with an eye on the accounts. OFCOM Director Ed Richards needs to demand (or allow) that commercial radio be different.

Commercial, local radio came to Sweden in the early 1990’s, later than the UK and through a wholly different process. Licenses were offered purely at auction, only rough geography was stipulated. Swedish public radio Sveriges Radio (SR) was horrified, and justifiably so. There existed in Sweden, in a universe parallel to public broadcasting, a rather interesting semi-commercial, semi-pirate radio offering. In addition there were a significant number of entrepreneurial Swedes who thought up new and different ideas for radio broadcasting, all looking to fill demands unfulfilled by SR. Some received licenses, some did not.

The new stations went on the air. Audience shares for Swedish public radio fell precipitously. But nascent commercial radio made no money in those early days, advertising being tied up (literally and figuratively) by huge Scandinavian newspaper publishers, several of which started buying radio companies falling to bankruptcy. In less than a decade virtually all private, local radio in Sweden was owned by two companies, which proceeded to homogenize their channels into ad-hoc networks of ‘more music, less talk’ stations. And then, as if by Magic (sic), audience shares of the public broadcaster rose. Content matters.

DAB licenses in the UK are less restrictive than analogue licenses. While OFCOM has continued, correctly, to mandate local programming and origination it’s time to take the handcuffs off commercial broadcasters. The BBC will continue to be the BBC, nationally oriented with a public service bent. The regulator does not serve the public when it grants or renews a license based on a music playlist. Imagine bureaucrats arguing about Phil Collins songs! It’s time to let commercial broadcasters decide what their stations will sound like. Succeed or fail, the listening public will know it and the RAJARS will show it.