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Agenda
UK commercial radio revenues
UK commercial radio issues
UK commercial radio listening
UK local commercial radio
Digital radio
UK radio listening by platform
Industry forecasts
Issues
radio specialist
Endnote
UK Commercial Radio Market Context © Grant Goddard: April 2007
2
3. Grant Goddard
UK commercial radio revenues
radio specialist
COMMERCIAL RADIO REVENUES (£m current prices)
800
Branded Content
700
National Advertisers
Local Advertisers
600
500
400
300
200
100
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
0
[Source: Radio Advertising Bureau]
2005 revenues
2006 revenues
Q4 2006 revenues
down 4% year-on-year
down 5% year-on-year
down 10% year-on-year
“Radio advertising has stalled, both in absolute terms and as a share of total advertising. We believe this is
being partly driven by a process of structural adjustment in favour of new media, a trend we believe will
continue, putting huge pressure on the commercial radio sector and, in particular, local stations.”
[Peter Davies, Director of Radio & Multimedia, Ofcom, Jan 2007]
UK Commercial Radio Market Context © Grant Goddard: April 2007
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4. Grant Goddard
UK commercial radio advertising forecasts
radio specialist
Radio advertising forecasts
Advertising
ZenithOptimedia
Association [Dec forecasts [Dec
Group M forecasts Opera forecasts RadioCentre
2006]
2006]
[Nov 2006]
[Nov 2006]
[Jan 2007]
2007
2008
2009
-0.8%
7.3%
7.5%
0.9%
1.8%
1.8%
1.1%
-2.0%
2.5%
3.0%
6.4%
6.4%
6.4%
2006 revenues were £582m
OPera forecasts £627m by 2009
RadioCentre forecasts £700m+ by 2009
Ofcom: “Some people may argue that these problems are due to cyclical factors and that the industry will
recover in the next advertising upturn. But we believe the changes happening in the radio industry may be
more structural and may need to be addressed in the interests of listeners.” [Nov 2006]
GCap Media: “Commercial radio revenues have been impacted in recent years both by fluctuating trends
in overall spend, as well as the growth of internet advertising. These changes are structural and are likely
to continue for the foreseeable future.” [Dec 2006]
UK Commercial Radio Market Context © Grant Goddard: April 2007
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5. Grant Goddard
UK commercial radio issues
radio specialist
Advertising agencies have issues with radio
“You can’t assume that, because a certain age group has grown up with commercial radio, it will stick with
it. You have to keep your audience by giving them good programming. Younger planner buyers now have a
negative perception of radio – how it’s losing listeners and the audience measurement system is
inadequate.” [Erica Taylor, Group Buying Director, Starcom]
“It’s a great companion medium. It’s true though that, in that particular context, programming and advertising
quality is more important than ever. Without engagement, radio becomes even easier to ignore.” [Al Young,
Executive Creative Director, St Luke’s]
“In the last year or so, digital audiences have grown but, as a general rule, sales companies are not pushing
the opportunities.” [Howard Bareham, Managing Partner, Mindshare]
Similar views from within the radio industry
“Radio has forgotten how to sell itself. Radio has said: ‘Oh my goodness, we have got to be more like the
internet and sell ourselves as a commodity.’ How dull is that?” [Fru Hazlitt, former CEO, Virgin Radio]
“Radio needs a new lease of life in the hearts and minds of advertisers.” [Ralph Bernard, CEO, GCap
Media]
“I think the way of selling and buying radio advertising needs to change, in the same way that the internet
had to change the way it sold and bought its medium. Frankly, I do think it’s archaic. All this nonsense that
goes on just to book a radio campaign. It’s a joke. It’s got to be so much easier.” [Fru Hazlitt, former CEO,
Virgin Radio]
UK Commercial Radio Market Context © Grant Goddard: April 2007
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6. Grant Goddard
Total radio listening
radio specialist
Total hours listened are forecast to continue a slow decline, despite population growth
TOTAL RADIO LISTENING (bn hours/year)
57
56
55
54
53
RAJAR
52
Ofcom forecast
51
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
[Source: RAJAR, Ofcom]
Ofcom forecasts that “radio listening is expected to decline over time, with increasing substitution from noninternet radio to internet radio”
UK Commercial Radio Market Context © Grant Goddard: April 2007
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7. Grant Goddard
UK commercial radio share of listening
radio specialist
SHARE OF RADIO LISTENING (%)
60
55
50
45
40
ALL BBC RADIO
35
ALL COMMERCIAL
RADIO
2006Q2
2005Q3
2004Q4
2004Q1
2003Q2
2002Q3
2001Q4
2001Q1
2000Q2
1999Q3
1998Q4
1998Q1
1997Q2
1996Q3
1995Q4
1995Q1
1994Q2
1993Q3
1992Q4
30
[Source: RAJAR/Ipsos Media]
Long-term commercial radio audience attrition from the BBC
Growth of commercial radio listening (and revenues) during 1990s was due to a fortuitous combination of
circumstances, rather than to the implementation of competitive strategies:
The self-destruction of market leader BBC Radio One (share fell from 23% in 1992 to 9% in 1998)
Launch of UK’s first national commercial stations in 1992, 1993 and 1995
Unprecedented growth in new local commercial stations licensed during 1990s
Launch of the Radio Advertising Bureau in 1992
Early consolidation in commercial radio industry
UK Commercial Radio Market Context © Grant Goddard: April 2007
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8. Grant Goddard
UK commercial radio listening by demographic
radio specialist
Commercial radio’s ‘heartland audience’ under pressure
COMMERCIAL RADIO - SHARE OF LISTENING BY DEMOGRAPHIC (%)
share of listening
15-44
15-24 male
25-34 male
35-44 male
15-24 female
25-34 female
35-44 female
1999Q4 2000Q4 2001Q4 2002Q4 2003Q4 2004Q4 2005Q4 2006Q4
59%
60%
59%
59%
59%
57%
54%
54%
55%
60%
58%
58%
61%
60%
56%
57%
54%
55%
54%
53%
54%
51%
46%
48%
56%
53%
51%
53%
51%
49%
49%
45%
67%
68%
71%
68%
70%
71%
67%
64%
65%
67%
63%
66%
65%
63%
57%
58%
63%
60%
60%
59%
60%
58%
56%
56%
[Source: RAJAR/Ipsos Media]
The industry defines 15 to 44 year olds as the “heartland audience for the commercial sector”, but this
demographic’s share of listening is being squeezed by:
BBC Radio One’s audience becoming older
• share amongst 25 to 34 males steady at 24%, whilst share down amongst 15 to 24 males (from 32% to
25% between Q4 1999 and Q4 2006)
BBC Radio Two’s audience becoming younger
• increasing popularity amongst 25 to 34s (male and female shares both up from 5% to 10% between Q4
1999 and Q4 2006)
• increasing popularity amongst 35 to 44s (male share up from 8% to 18%, female share up from 8% to
13% between Q4 1999 and Q4 2006)
Additionally:
Hours listened to all radio (BBC and commercial) by 25 to 34s has fallen by 18% (Q4 1999 to Q4 2006),
mostly as a result of population changes
UK Commercial Radio Market Context © Grant Goddard: April 2007
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9. Grant Goddard
UK commercial radio reach and hours by demographic
radio specialist
Younger demographics drift away from commercial radio
WEEKLY REACH 15-24 year olds (% )
100%
1999Q4
95%
2000Q4
90%
2002Q4
80%
2003Q4
75%
2004Q4
70%
2005Q4
65%
2000Q4
22
2001Q4
20
2002Q4
2003Q4
18
2004Q4
2005Q4
16
2006Q4
14
55%
50%
100%
1999Q4
2006Q4
60%
12
ALL RADIO
25 to 34 year olds:
Reach steady for all radio,
but in decline for
commercial radio
Hours listened in decline
AVERAGE HRS. 15-24 yr olds (hr/wk)
2001Q4
85%
15 to 24 year olds:
Reach steady for all radio,
but in decline for
commercial radio
Hours listened in decline
24
COMMERCIAL RADIO
ALL RADIO
WEEKLY REACH 25-34 yr olds (% )
1999Q4
95%
2000Q4
90%
24
COMMERCIAL RADIO
AVERAGE HRS. 25-34 yr olds (hr/wk)
1999Q4
2000Q4
22
2001Q4
85%
2002Q4
80%
2003Q4
75%
2004Q4
70%
2005Q4
65%
2001Q4
20
2002Q4
2003Q4
18
2004Q4
2005Q4
16
2006Q4
60%
2006Q4
14
55%
50%
12
ALL RADIO
COMMERCIAL RADIO
ALL RADIO
COMMERCIAL RADIO
[Source: RAJAR/Ipsos Media]
UK Commercial Radio Market Context © Grant Goddard: April 2007
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10. Grant Goddard
UK local commercial radio
radio specialist
Local radio proving uneconomic
Ofcom: “While local commercial radio may remain popular, the decline in its attractiveness to advertisers may
mean that the current business model for commercial radio – particularly for local stations – may not be
sustainable.” [Nov 2006]
Local radio faces particular challenges:
Local commercial radio’s hours listened fell by 10% between Q4 1999 and Q4 2006
Local advertising revenues fell by 15% between 1999 and 2006 (at current prices)
Half of all local commercial stations lose money or make an annual profit of less than £100,000
Fixed costs represent 70% of total operational costs for local radio
Balance sheets increasingly require impairment adjustments to valuations of radio licences:
The Local Radio Company wrote down the value of its licences by £16.3m to £19.1m during year ended 30th
September 2006
GCap Media wrote down the value of its two remaining Century stations by £7.1m before sale for £60m in
October 2006
UTV wrote down the value of its UK radio licences by £20.2m during year ended 31st December 2006
SMG wrote down the value of Virgin Radio by £58.8m to £105.0m during year ended 31st December 2006
Local radio licences offered by the regulator relatively recently will increasingly be returned, due to unviability:
Star FM, Stroud (owned by UKRD) opened 1998, closed September 2006
River FM, West Lothian (owned by Kingdom Radio Group) opened 2003, closed January 2007
UK Commercial Radio Market Context © Grant Goddard: April 2007
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11. Grant Goddard
Digital-only radio stations
radio specialist
New digital-only radio stations – driving growth on new platforms
TOP DIGITAL-ONLY RADIO STATIONS
local
DAB
national
DAB
Sky
Freeview
Group
BBC W orld Service
The Hits
BBC7
BBC 6 Music
Smash Hits Radio
Planet Rock
BBC Asian Network UK
1Xtra from the BBC
Five Live Sports Extra
Mojo Radio
Virgin Radio Classic Rock
Heat
The Arrow
Chill
Q
BBC
EMAP
BBC
BBC
EMAP
GCap
BBC
BBC
BBC
EMAP
SMG
EMAP
Chrysalis
GCap
EMAP
Hours per
week ('000)
6,275
3,810
3,496
2,514
2,453
2,363
2,333
1,804
1,272
939
937
747
744
720
554
[Source: RAJAR/Ipsos Media, Q4 2006, Asian Network excludes listening
within local TSA; BBC World Service includes AM/SW listening]
Differing strategies for new digital-only stations:
BBC: only six brands, all national on DAB, complementary niche content, all on Freeview, Sky and cable
Commercial radio: 34 brands, mix of national/regional/local, mix of platforms
Too early to determine which player will benefit most from digital radio uptake:
“The BBC has had an unfair share of the analogue spectrum but digital enables the commercial players the
space to compete on a much more equal footing.” [Steve Orchard, operations director, GCap Media]
“I’m sure digital will be a contributory factor as regards audience share, but it is dependent on programming
too.” [Jeremy Found, head of media, COI]
UK Commercial Radio Market Context © Grant Goddard: April 2007
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12. Grant Goddard
UK radio listening by platform
radio specialist
DAB is not the only digital platform
RADIO HOURS LISTENED BY PLATFORM (% )
14%
12%
10%
8%
6%
LISTENING VIA INTERNET
4%
LISTENING VIA TV
2%
LISTENING VIA DAB
2006Q4
2006Q3
2006Q2
2006Q1
2005Q4
2005Q3
2005Q2
2005Q1
2004Q4
0%
[Source: RAJAR/Ipsos Media Platform Survey, methodology changed
from Q3 2006 forwards]
DAB receiver purchase has been the biggest driver of the migration from analogue to digital listening
Digital radio stations available on Freeview (11 BBC, 15 commercial) generate listening equally across all
demographics
Internet listening driven by higher broadband penetration at home and work
Mobile phone listening (via FM and DAB) will increase in importance (8% of population have ever listened
to radio via mobile phone)
55% of adult population have ever accessed digital radio at home (including 16% via DAB, 22% via
internet, 39% via digital TV)
Radio via digital TV has 22% weekly reach
Radio via internet has 12% weekly reach
UK Commercial Radio Market Context © Grant Goddard: April 2007
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13. Grant Goddard
DAB radio receiver sales
radio specialist
DAB radio receiver sales are slowing down
YEAR-ON-YEAR CHANGE IN DAB RADIO SALES (%)
200
12-month moving average
150
100
50
Feb-07
Dec-06
Oct-06
Aug-06
Jun-06
Apr-06
Feb-06
Dec-05
Oct-05
Aug-05
Jun-05
Apr-05
Feb-05
Dec-04
0
[Source: DRDB/GfK]
DAB receiver sales in 2006 increased 21% year-on-year, compared to 66% a year earlier
DAB receivers comprise only 18% of radio units sold
DAB receivers comprise less than 1% of car radios sold, only 13% of clock radios sold, and only 3% of
mp3 player/radio combos sold
“We believe that 2007 is going to be quite a tough year [for DAB sales]” [Colin Crawford, director of
marketing, Pure Digital]
UK Commercial Radio Market Context © Grant Goddard: April 2007
13
14. Grant Goddard
Digital radio listening
radio specialist
Ofcom forecasts digital platforms will comprise 50% of radio listening by 2010
DIGITAL RADIO LISTENING (% of total listening)
100
80
60
40
RAJAR Platform Survey
20
Ofcom forecast
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
0
[Source: RAJAR, Ofcom]
According to Ofcom market research:
84% of the population have never used a DAB radio receiver
65% of the population have never listened to radio via digital TV
83% of the population have never listened to radio via the internet
91% of the population have never listened to radio via their mobile phone
75% of the population said they were ‘unlikely’ to purchase a DAB radio receiver within the next six
months
whereas 92% of the population used analogue radio at least once a month
UK Commercial Radio Market Context © Grant Goddard: April 2007
14
15. Grant Goddard
National digital stations vs. national analogue stations
radio specialist
Listening to new digital radio stations remains tiny relative to traditional analogue radio stations
NATIONAL RADIO STATIONS RANKED BY SHARE (%)
national stations
station
owner
Radio 2
Radio 4
Radio 1
Radio 5 Live
Classic FM
TalkSport
Virgin Radio
Radio 3
BBC
BBC
BBC
BBC
GCap
UTV
SMG
BBC
TOTAL
share
BBC
commercial
national DAB stations
% share
all radio
listening
85%
15%
station
15.8
11.1
9.7
4.4
4.2
1.8
1.5
1.4
BBC7
BBC 6 Music
Planet Rock
Asian Network
1Xtra
Five Live Sports Extra
OneWord
Capital Life
Core
TheJazz
49.9 TOTAL
42.4
7.5
owner
% share
all radio
listening
BBC
BBC
GCap
BBC
BBC
BBC
C4/UBC
GCap
GCap
GCap
share
0.33
0.24
0.22
0.22
0.17
0.12
0.04
0.03
0.03
n/a
1.41
77%
23%
1.08
0.33
BBC
commercial
[Source: RAJAR, 2006Q4]
National digital stations attract only 1% of all radio listening
BBC dominates listening to national analogue stations (85% to 12%)
BBC dominates listening to national digital stations (77% to 23%)
UK Commercial Radio Market Context © Grant Goddard: April 2007
15
16. Grant Goddard
National and quasi-national digital stations
radio specialist
Commercial radio offers more content on digital than BBC
DAB
national
Freeview
LISTENING TO NATIONAL + QUASI-NATIONAL DIGITAL RADIO
STATIONS
owner
The Hits
BBC7
6 Music
Smash Hits
Planet Rock
Asian Network
1Xtra
5 Live Sports Extra
Mojo
Virgin Classic Rock
Heat
The Arrow
Chill
Q
oneword
Capital Life
3C
Core
Capital Disney
Virgin Xtreme
Virgin Groove
Fun
TheJazz
BBC total
commercial total
DAB
local
station
EMAP
BBC
BBC
EMAP
GCap
BBC
BBC
BBC
EMAP
SMG
EMAP
Chrysalis
GCap
EMAP
C4/UBC
GCap
EMAP
GCap
GCap
SMG
SMG
GCap
GCap
year-on-year change
in hours listened hrs/wk ('000)
2005
15%
45%
61%
-2%
61%
-32%
34%
22%
-10%
20%
230%
2006
20%
30%
21%
19%
62%
22%
4%
67%
42%
-7%
21%
-3%
13%
54%
-4%
-4%
-16%
-17%
52%
30%
21%
-42%
21%
36%
26%
15%
Q4 2006
3,810
3,496
2,514
2,453
2,363
2,333
1,804
1,272
939
937
747
744
720
554
458
359
320
271
261
227
170
149
[new]
11,419
15,482
[Source: RAJAR]
Commercial radio offers 355 services, 118 brands and 32 digital-only stations on DAB
BBC offers 59 services, 43 brands and 4 digital-only stations on DAB
All BBC digital services showed year-on-year growth in hours listened in 2006, whereas several
commercial services suffered falls in hours listened
UK Commercial Radio Market Context © Grant Goddard: April 2007
16
17. Grant Goddard
Radio listening by platform
radio specialist
Commercial radio usage on digital platforms exceeds BBC
% HOURS LISTENED BY PLATFORM
digital
analogue
quarter
total
DAB
DTV
internet
ALL RADIO:
2004Q4
94%
6%
2%
2%
1%
2005Q4
89%
11%
6%
3%
2%
2006Q2
86%
14%
7%
4%
2%
2006Q4
88%
12%
7%
4%
2%
COMMERCIAL RADIO:
2004Q4
95%
5%
2%
3%
1%
2005Q4
89%
11%
5%
4%
2%
2006Q2
84%
16%
8%
5%
3%
2006Q4
86%
14%
6%
6%
2%
BBC RADIO [estimated]:
2004Q4
93%
7%
3%
2%
1%
2005Q4
89%
11%
7%
2%
2%
2006Q2
88%
12%
7%
3%
2%
2006Q4
88%
12%
7%
2%
1%
*2006Q4 data not directly comparable as methodology changed
[Source: RAJAR, DRDB]
Analogue radio listening dominates over digital (88% to 12%)
Commercial radio’s greater proportion of digital listening than the BBC is unsurprising, since:
43% of listening to commercial radio is by under-35s
45% of listening to BBC is by over-55s
UK Commercial Radio Market Context © Grant Goddard: April 2007
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18. Grant Goddard
Mobile phone listening
radio specialist
Radio listening via mobile phones not substantial, despite high penetration and FM presence in
handsets for 5-10 years
Radio via IP (ie: Vodafone Radio DJ and Virgin Radio mobile application)
Data charges are expensive for user with pay-per-usage (~1MB per minute)
Radio usage with unlimited data bundles would generate significant network load, and therefore
usage of streaming services is often prohibited
DAB/DMB radio (ie: Virgin Lobster handset)
Competition from mobile TV for user’s attention
Greater handset cost and size/weight
Substitution by FM radio which offers more robust reception
FM radio
Widespread incorporation into handsets (ie: 52 of Nokia’s current 86 handsets)
Low adoption (8% of adult population, RAJAR)
Offers music purchase option via Sony Ericsson Track ID
Low promotion as no revenues generated for operators
Radio listening via mobile requires listening via headphones
Competition for on-the-move radio usage from portable mp3 players
Convergence of phone/mp3 functionality positions radio and mp3 listening options side-by-side
UK Commercial Radio Market Context © Grant Goddard: April 2007
18
19. Grant Goddard
Industry forecasts 1
radio specialist
Industry forecasts of DAB receiver sales may prove over-optimistic
DAB RADIO PENETRATION (% )
60
DAB CUMULATIVE SET SALES (millions)
25
50
20
40
15
30
10
20
10
RAJAR actual (% adults)
DRDB forecast (% households)
5
GfK actual
[Source: RAJAR, DRDB]
2010Q3
2010Q1
2009Q3
2009Q1
2008Q3
2008Q1
2007Q3
2007Q1
2006Q3
2006Q1
2005Q3
2005Q1
2004Q3
2004Q1
0
DRDB forecast
0
2002
2003
2004
2005
2006
2007
2008
2009
2010
[Source: DRDB]
The RadioCentre has discussed with the BBC the possibility of analogue switch-off in 2010 or 2015
Multiplex owner Digital One has proposed 2015 as a “logical, achievable and sensible commencement date
for switching off the first FM frequencies”
Ofcom predicts only that “at some point over the next 10 to 15 years, there may come a point where the
vast majority of radio listening is via digital platforms”
UK Commercial Radio Market Context © Grant Goddard: April 2007
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20. Grant Goddard
Industry forecasts 2
radio specialist
Commercial radio industry forecasts may prove over-optimistic
In January 2007, the commercial radio industry adopted a year-three plan with forecasts for:
Radio’s share of display advertising
7% by 2009, 8% by 2011 (from 6.0% in 2006)
Commercial radio’s share of listening versus BBC
46% by 2009, 48% by 2011 (from 43.2% in Q4 2006)
Digital radio’s share of all commercial radio listening
30% by 2009, 50% by 2011 (from 14% in Q4 2006)
UK Commercial Radio Market Context © Grant Goddard: April 2007
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21. Grant Goddard
Issues facing commercial radio stations
radio specialist
COMPELLING CONTENT
INNOVATION
CREATIVITY
PROGRAMMES, NOT PLAYLISTS
DIALOGUE, NOT MONOLOGUE
ACCESSIBILITY
OUTREACH
TRUSTWORTHY
RELIABILITY
QUALITY OF COMMERCIALS
DIFFERENT FROM COMPETITORS, NOT THE SAME
RELATIONSHIPS
LOCAL ADVERTISING
UNPREDICTABILITY
MISSIONARY ZEAL
UK Commercial Radio Market Context © Grant Goddard: April 2007
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22. Grant Goddard
What consumers want
radio specialist
Young people want:
Uninterrupted iPod music sometimes for:
• Personal choice of music
• No ads
• No inane chat
• Less repetition
• Spontaneity of randomised playlists
Radio sometimes for:
• Human voices provide entertainment, comfort and a sense of security
• An accompaniment to other activities
• Mood management (getting you up, chilling you out)
• Information (news, traffic, travel, what’s on)
[Ofcom, The iPod Generation, 2004]
The most important characteristics of radio for people of all ages are (in order):
Stations and services that are easy to receive on the move
Witty and entertaining presenters
Local news bulletins and reports to keep people well informed
Local and national weather reports
National news bulletins and reports to keep people well informed
Asked if they want more national radio or more local radio:
Twice as many people opted for local radio over national radio
Ofcom concluded that “radio was felt to have an important role to play in giving local communities a sense of
identity”
[Ofcom, Radio: Preparing For The Future, 2005]
UK Commercial Radio Market Context © Grant Goddard: April 2007
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23. Grant Goddard
What the advertising community wants
radio specialist
“The biggest problem with radio commercials is commercial radio. People rightly bemoan the state of creativity
in radio advertising, but I can’t remember anyone ever bemoaning the lack of creativity in commercial radio
itself. When the medium is so format-driven that it’s devoid of any original content or innovation, and
stations are so homogeneous as to be anonymous, is it any wonder people don’t get excited about it?”
[Jim Thornton, executive creative director, Leo Burnett London]
“Commercial radio needs to do a lot of work in order to make it an appealing medium. Nothing is more likely to
destroy an audience than a spate of radio commercials across stations with an identical offering.”
[Brian Jenkins, head of radio, COI]
“There is a crisis in radio creativity within the world of full-service agencies, where there tends to be an inherent
snobbery towards the medium. At the most junior level, everyone thinks that they can do radio commercials
and, to a large extent, it has become the primary school medium that is given to trainees or juniors. Little
wonder then that 90% of radio ads are rubbish.”
[Stephen Donovan, managing director, Radioville]
UK Commercial Radio Market Context © Grant Goddard: April 2007
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24. Grant Goddard
Radio regulation 1
radio specialist
Format regulation has created hundreds of homogenous analogue commercial radio stations:
86% of stations play mainstream popular music, comprising:
• 53% play oldies
• 20% play current hits
• 8% are “full service” stations
• 4% play adult contemporary music
5% serve ethnic minorities
3% play rock music
2% play dance music
1% play jazz/soul
1% play easy listening
1% offer news/talk programming
0% play classical music (one station)
Since this survey (June 2006), the situation has worsened, as Jazz FM, Smooth FM and Saga FM stations
have adopted oldies formats
UK Commercial Radio Market Context © Grant Goddard: April 2007
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25. Grant Goddard
Radio regulation 2
radio specialist
The commercial radio industry will have to reduce its substantial fixed costs by:
renegotiation of its format/content requirements with Ofcom
renegotiation of its music royalty payments to PRS and PPL
renegotiation of its transmission agreements with Arqiva/NGW
UK Commercial Radio Market Context © Grant Goddard: April 2007
25
26. Grant Goddard
Endnote
radio specialist
“The big boys are simply brands that are having to compete with an ever-increasing number of other brands,
which are coming to radio from online, TV and magazines, to name but three. Success will depend less and
less on old formats and big names, and more on musical choice, interactivity and availability. The less the
established radio stations change, the greater the fragmentation will be”
[Mike Hales, music editor, AOL]
“The much lauded digital radio revolution has become something of a dead duck, and the blame for this lies
squarely with radio companies. After rushing in to grab bandwidth on the digital multiplex, there has been a
singular lack of imagination and investment in digital stations’ content and their marketing”
[Colin Grimshaw, deputy editor, Media Week]
“I’m broadly optimistic about its future [radio], but I think it’s more vulnerable than people realise, particularly
among the young generation. If it doesn’t reinvent itself, it will become a diminishing part of the landscape”
[Andy Duncan, chief executive, C4]
UK Commercial Radio Market Context © Grant Goddard: April 2007
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