Broadcasters Hope Folks Will Forget Digital Dividend

Michael Hedges May 19, 2014 Follow on Twitter

Consolidation is an appealing business strategy. All those economies of scale bring joy to investor’s hearts, wherever that might be. After the digital dividend brought a decade of experimentation and fragmentation, media organizations are pulling back to leading brands. Market shares might be rising but consumers are still going digital, looking and listening for something new. It’s a quandary.

The aggregate market share for BBC radio channels was markedly lower in the first quarter RAJAR audience estimates released last week. Year on year the BBC total market share dropped to 54.9% from 55.7% with national channels posting 46.6%, slightly lower from 46.7%, and local channels as a whole falling to 8.3% market share from 9.0% in the national survey. Historically, BBC aggregate first quarter market share – January through March – draws roughly equal to fourth quarter – October through December – if not higher.

What happened, it appears, was a sharp drop-off in reported listening to BBC channels by folks in the 15 to 44 age group, 40.8% from 43.1% one year on. Listening to BBC channels by folks 45 years and older increased, on aggregate, to 64.5% from 63.9%. One cause – of several possibilities – could be the drop in analogue radio listening, AM and FM, to all radio, 57.8% from 60.5%. The growth platforms are online and mobile, up 27% in listening hours year on year.

In the national survey, BBC Radio 2 expanded its lead as the top rated channel to 17.9% market share, highest ever, from 17.7% one year on. News and talk channel Radio 4 held 2nd place with 12.2% market share, down from 12.8%. Radio 1, a year into repositioning as more youthful with more youthful show hosts, kept 3rd place, unchanged at 6.7% market share. Other BBC channels were either unchanged year on year or up a slice.

At the annual Radio Academy gala a few days before the Rajar release Radio 2 was awarded station of the year and Radio 4 took five gold medals. The Capital FM London morning show took top time slot honors. Local East Midlands station Gem 106 show hosts Sam Pinkham and Amy Voce won personality of the year.

For commercial radio in the national survey total listening was up ever so slightly to 42.0% from 41.9% year on year. Aggregate market share for national commercial channels, rising through consolidation over the last year, actually dropped to 12.3% from 13.0% with local commercial stations aggregate market share rising to 29.7% from 27.0%. The gap between all BBC channels and all commercial channels dropped to 12.9% from 13.8% one year on, still within the predictable range for first quarter results.

For commercial radio in the national survey, growth came from consolidation. The Heart franchise, owned by Global Radio, placed 4th among all channels with 6.2% market share, up from 4.8%. As part of an anti-trust settlement, leading Irish broadcaster acquired several stations from Global Radio, keeping the Heart or Smooth franchises, setting up separate sales houses and pealing off some local distribution of the Gold franchise. The Smooth franchise bumped up to 3.2% market share from 2.3%.

The Absolute Radio franchise, one of three national channels and producer of several digital brand extensions, more than doubled its aggregate national market share to 2.5% from 1.2% year on year. Bauer Media acquired Absolute Radio last year and also owns the Kiss franchise, which nationally rose to 2.5% market share from 2.0%, and the Magic franchise, which nationally dropped a tad to 2.1% market share from 2.2%.

The Real Radio franchise, acquired by Global Radio and Communicorp and rebranded as Heart, disappeared. Bauer Media’s Q and Kerrang Radio franchises effectively disappeared, Kerrang Radio relegated to DAB and Q becoming the Kiss brand extension Kisstory. Sunrise Radio, facing legal issues and losing AM distribution, also disappeared from the Rajar survey.

Rajar’s audience estimates for the London market were particularly tough on the BBC. Radio 4 kept the top spot but dropped to 15.4% market share from 17.2% year on year. Radio 2, still number 2 in London, dropped to 11.8% market share from 12.6%. Radio 1, Five Live and BBC London were unchanged at 4.5%, 4.0% and 1.3%, respectively. Radio 3 was up a slice to 2.1%.

The Magic franchise ranked 3rd in the London market, tied at 5.3% with the Heart franchise. Magic was down from 5.6% one year on and Heart, benefiting from enhanced distribution and commensurate promotion, was up from 4.2%. The Kiss and Smooth franchises also showed market share bounces.

Digital shift was acutely felt in London. Analogue listening dropped through the 50% threshold to 48.6%, nearly ten points lower than the national average.

See also in ftmKnowledge

Europe’s Radio – Northern Europe

Northern Europe’s radio has a very digital sound. And change is in the air. Economic challenges abound for both public and commercial broadcasters. The ftm Knowledge file reports on Denmark, Estonia, Finland, Iceland, Ireland, Latvia, Lithuania, Norway, Sweden and the UK. 144 pages PDF includes Resources (November 2012)

Order here

Media Business Models Emerging

After a rough transition media business models are emerging. Challenges remain. There are Web models, mobile models, free models, pay models and a few newer models. It makes for exciting times. This ftm Knowledge file examines emerging business models and the speed-of-light changes. 137 pages PDF (January 2013)

Order here