The dynamics of a dynamic media market

Michael Hedges August 17, 2007

More people than ever tuned into UK radio during this years’ second quarter, says the RAJAR audience survey. During the same period iconic commercial radio station Capital Radio fell to fourth place in London. The stations’ 4.1% market share is its historical low point.

While commercial broadcasters are enjoying their narrowest gap against the BBC in four years the winners are national stations, mainly coming from the increased number of national digital radio brands. That difference has averaged 10% over the last five years, now 10.8% following the 11.8% difference in Q2 2006. National commercial channels reached 11.2% market share, another record, up from 10.7% one year on. The main national analogue channels made next to no contribution to the increase: Classic FM, down to 4.2% from 4.5% one year on, TalkSport, up to 1.8% from 1.7% and Virgin Radio, flat at 1.5%.

BBC2 remains the UK’s most listened to radio channel, 15.6% market share, down from 15.7% year on year. Radio Four is number 2, 11.2%, up from 10.7% in Q2 2006. Radio One is flat, 10.3%, comparing the same quarter year on year. Don’t cry for them: it’s their highest market share in four years. Remember their dismal 7.6% market share in Q2 2003?

BBC digital channels attracted 3 million listeners, little changed from Q2 2006. RAJAR reported a six-fold increase since 2003 in digital radio listening, which includes DAB, TV set-top boxes and the internet, now counting 6.09 million daily listeners. It’s the commercial digital brands now setting the pace for the changing UK radio dynamic: channels like The Hits, Heat, Chill, The Arrow, Smash Hits and the recently introduced theJazz. None of this is bad news, taking the long view.

Unlike most of Europe, the UK radio market is dynamic. The smart and well-funded BBC faces off with a scrappy and tenacious commercial broadcast sector. The result is evident: more people are tuning in, now 91% of the UK population. Listening levels have been falling in markets dominated by either the public or private sector broadcasters.

Digital radio has taken off in the UK. It couldn’t have happened without the joint and robust effort of the BBC and its commercial sector brethren. Most other countries are still planning for digital broadcasting, still having meetings, reveling in the technology. UK broadcasters also benefit from a well-designed and technically excellent measurement system, absolutely essential for the commercial sector and equally valuable for the BBC. Again, the RAJAR measurement standard is a shared responsibility. Nobody in the UK is resting in the shade. 

But it’s London market that takes the air out of the room, as most capital cities do for the commercial broadcasters. It’s obvious; most media buyers live there. And there’s one message from the Q2 RAJARs on London radio: Would the last person leaving Capital Radio please turn out the lights.

London radio listeners continue to desert Capital Radio, now number 4 among commercial stations with a 4.1% market share, bested by “light rock, less talk” and the increasingly hip KISS. To be noted: the breakfast show of Capital Radio’s Johnny Vaughn, off in this survey period, still commands a sizable audience. “Shedding the 45 plus” is not a workable strategy for a 25 year old analogue radio station in a market that has – at least figuratively – gone digital. Capital Radio is not “in transition.” It’s over.

Capital Radio’s fall is remarkably similar to the recent crash of Berlin station rs2: both in maddingly competitive capital markets, both iconic radio brands in their respective markets, both trashed by ‘new’ radio. rs2 lost one-third of its audience, reported in the recent ag.ma radio survey, after a major marketing campaign targeting younger listeners.

The interchangeable Magic 105.4 and Heart 106.2 share the top two positions, tied with 6.2% market share. With only minor fluctuations over the last four years, the Magic/Heart combo reaches between 11.5% and 12.5% of the London audience. If one would disappear, the one remaining would probably have a 10% share or more or less.

The statistical eye spots that KISS – now in third place with a 4.9% share - has enjoyed a ratings bump in the second quarter of each of the last four years. Sometimes you don’t explain these things, just report them.

Less reported are the BBC audience figures in London. BBC Radio 4 showed a whopping gain to 14.6% market share from 13.1% one year on. BBC2 is down slightly to 10.6% and Radio One is down to 5.5% from 5.9% year on year. Five Live is up to a 5% from 4.5% in Q2 2006. Ranking all radio rated in the London market Capital Radio is now 9th, bested by Classic FM.

Emap owns both Magic and KISS. The sale price for the Emap radio stations has just gone up. GCap – owner of Capital Radio and Classic FM, which also took a dump in the ratings – might consider buying market share instead of trying to earn it. GCap Media’s share price was punished immediately after the audience survey was released.

The RAJAR Q2 2007 radio audience survey was conducted between April and June.

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