1.
The Communications Market 2004 –
Radio
Published: August 2004

2.
The Communications Market 2004 – Radio
The Communications Market 2004 –
Radio
Contents
Section Page
1 Key facts – radio 7
2 Introduction 8
3 Executive summary 9
4 Recent major developments in the radio industry 11
4.1 A brief history of UK radio 11
4.2 Major industry consolidation yet to happen 12
4.3 Listening via other platforms is growing 13
4.4 New stations launched 14
4.5 Community radio given the go-ahead 16
4.6 BBC Charter Review underway 16
5 The radio industry – new platforms grow in
importance
17
5.1 Number of analogue stations is growing 17
5.2 Most local commercial stations provide
mainstream output
18
5.3 Regional stations have added to choice 20
5.4 AM radio tends to target older audiences 22
5.5 Ethnic stations broadcast mainly on AM 23
5.6 Demand for RSLs has been steadily increasing 24
5.7 The community radio pilot scheme 25
5.8 Choice via digital platforms continues to grow 28
5.9 DAB digital radio take-up growing rapidly 31
5.10 DAB digital radio coverage improving 32
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3.
The Communications Market 2004 – Radio
Section Page
5.11 Digital radio drives growth of new “national”
stations
37
5.12 Data over DAB digital radio a new growth area 39
5.13 Radio industry revenues have increased rapidly 39
5.14 A small number of large groups dominates UK
radio
41
5.15 The rise of quasi-national brands 43
5.16 An overview of the major radio players 44
6 The citizen-consumer – listening continues to
increase
64
6.1 Total radio listening is on the increase 64
6.2 What people listen to 68
6.3 Audience share 76
6.4 Listeners’ attitudes to offensive material 78
6.5 Listening in the nations varies significantly 79
6.6 Listening to digital radio stations is growing 81
6.7 DAB digital radio sets sales have increased 82
6.8 A quarter of adults have listened to radio via TV 84
6.9 Radio listening via the internet has increased 85
6.10 Younger audiences listening via mobile ‘phones 86
Appendix Map of commercial radio in the UK: AM and FM 88
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4.
The Communications Market 2004 – Radio
The Communications Market 2004 –
Radio
Index of figures
Figure Page
1 Major events in radio in the UK 11
2 New analogue stations on air in 2004 15
3 Planned timetable for advertisement of new
analogue local commercial radio licences
15
4 Number of analogue radio stations on-air in the UK 17
5 Typical availability of analogue stations by area 18
6 Station styles 18
7 Analogue stations by style (based on number of
licences)
19
8 Analogue availability of different radio styles 20
9 Regional commercial radio stations 21
10 Coverage and location of analogue regional licences 22
11 AM radio licences 23
12 Analogue ethnic radio licences 23
13 Growth in the demand for short term RSLs 24
14 Long term RSLs by establishment 25
15 Pilot community radio stations 26
16 Status of pilot community radio stations 27
17 Analogue stations available on alternative platforms 29
18 DAB digital radio only stations by style 29
19 Satellite only stations by style 30
20 Radio stations available via DAB and via digital
television platforms
31
21 Number of DAB digital radio multiplexes on air 32
22 New multiplexes coming on air in 2004 32
23 DAB digital radio coverage 33
24 BBC DAB digital radio coverage 34
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5.
The Communications Market 2004 – Radio
Figure Page
25 Commercial DAB digital radio coverage 34
26 New DAB digital radio transmitters switched on
January - June 2004
35
27 UK DAB digital radio multiplex operators 36
28 Regional and local DAB digital radio multiplex
ownership
36
29 Typical availability of DAB digital radio stations by
area
37
30 Availability of DAB digital radio stations across the
UK
38
31 UK Commercial radio revenue (net) and BBC radio
spending
39
32 Radio share of display advertising 40
33 Split of revenues for analogue only stations in Q1
2004
41
34 Groups split by number of licences owned 41
35 Audience shares of commercial hours 42
36 Shares of commercial stations revenue 43
37 Positioning of all national radio stations 44
38 Remit and spending of the BBC radio stations 45
39 Audience profile of BBC radio stations 46
40 The BBC’s local radio and nations’ radio services 47
41 Map of Capital Radio Group analogue radio stations 48
42 Positioning of Capital Radio Group’s radio brands 49
43 Map of Chrysalis Radio analogue radio stations 50
44 Positioning of Chrysalis Radio’s radio brands 51
45 Map of Emap’s analogue radio stations 52
46 Positioning of Emap’s radio brands 53
47 Map of GMG’s analogue radio stations 54
48 Map of GWR’s analogue radio stations 55
49 Positioning of GWR’s radio brands 56
50 Map of Saga’s analogue radio stations 57
51 Map of SRH’s analogue radio stations 58
52 Map of SMG’s analogue radio stations 59
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6.
The Communications Market 2004 – Radio
Figure Page
53 Map of TWG’s analogue radio stations 60
54 Map of UBC’s analogue radio stations 61
55 Map of the Local Radio Company’s analogue radio
stations
62
56 Other UK radio groups 63
57 Total listening hours 64
58 Where people listen to radio 64
59 When people listen - weekly average audience 65
60 Average weekly listening by demographic 66
61 Average weekly listening over time 66
62 Split of listening hours by gender 67
63 Split of listening hours by age 67
64 Split of listening hours by demographic 68
65 Frequency with which people say that they listened
to the radio
68
66 What people listen to (hours) 69
67 Audience reach by demographic group 69
68 Audience reach – BBC and commercial radio 70
69 Audience reach of commercial radio stations by
style
71
70 Audience reach of BBC stations 71
71 Total commercial listening hours within the Adult
Mainstream and Chat and Adult Mainstream styles
by demographic group
72
72 Total commercial listening hours within the
Specialist Music Youth and Chart Led Mainstream
styles by demographic group
73
73 Total commercial listening hours within Specialist
Music Other and Specialist News and Speech styles
by demographic group
74
74 Total commercial listening hours within Ethnic and
35+/Gold styles by demographic group
75
75 Audience share – commercial and BBC 76
76 Commercial radio audience share by station style 77
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7.
The Communications Market 2004 – Radio
Figure Page
77 BBC radio audience share 77
78 Immediate action taken when offended by a radio
programme
78
79 Organisations to complain to about a radio
programme
79
80 Share of listening hours by nation 80
81 Frequency of listening by nation 81
82 Household penetration of equipment capable of
receiving digital radio services
82
83 Number of DAB digital radio sets sold 83
84 Change in average price of DAB digital radio
receivers
83
85 Number of DAB digital radio models available in the
UK market
84
86 Proportion of adults who have ever listened to radio
via television
85
87 Proportion of adults who have ever listened to radio
via the internet
86
88 Proportion of adults who have ever listened to radio
via mobiles
86
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8.
The Communications Market 2004 – Radio
1. Key facts – radio
• The radio industry has annual revenues of £1.1bn, with around 48%
accounted for by the commercial sector and 52% by the BBC
• The number of hours of radio listening in the UK has increased by 7% over
the last 5 years, with over two-thirds (69%) of all listening done at home
• At least 3.4% of all radio listening in Quarter 2 2004 was to stations only
available on digital (not all digital listening was measured)
• 607,000 DAB digital radio sets had been sold up to May 2004 with 176,000
being sold over the 2003 Christmas period
• Commercial DAB digital radio is available to over 85% of the population and
the BBC expects to reach that level during 2004
• There are 274 analogue commercial radio licensees broadcasting, 5 BBC
national networks, 40 local BBC stations and 6 BBC services in the nations.
• 130 commercial radio stations are broadcasting on DAB digital radio in the
UK, while Sky Digital carries 67 commercial radio stations, Freeview over 20
and the cable networks over 30
• 8 UK radio groups account for 84% of all commercial radio listening and
83% of commercial revenues
• 74% of children’s radio listening is to commercial stations with the same
percentage of 65+ listening being to BBC stations
• 54% of people across the UK listen to radio every day, although the figure
is higher in Wales (56%) and England (55%) and lower in Northern Ireland
(42%) and Scotland (47%)
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9.
The Communications Market 2004 – Radio
2. Introduction
This is the first in a series of annual Communications Market reports by Ofcom. The
main annual Communications Market publication, which from 2005 will be published
in May, will be supplemented by quarterly updates, in October, January and August
each year, providing the latest available data on each sector, including:
• size, structure and financing;
• availability, penetration and use of products;
• consumer attitudes and behaviour.
The report highlights developments during 2003 and the start of 2004 in the radio
sector. It also provides the market context for Ofcom’ review of the Radio market,
which is considering the future of digital radio and the regulation of analogue radio. It
sits alongside similar reviews of television and telecoms.
The Communications Market supports Ofcom’s objective to provide best in class
research to which stakeholders have regular access.
The information set out in this report does not represent any proposal or conclusion
by Ofcom in respect of the current or future definition of markets and/or the
assessment of significant market power for the purposes of the Communications Act
2003, the Competition Act 1998 or other relevant legislation.
In future The Communications Market will be published in hard copy and on the
Ofcom website in May each year, covering data for the previous calendar year. This
year’s report is published three months later than will be the case in future, due to
Ofcom not coming into being until the end of 2003 and the time taken to collect and
collate the data. As a result, we are publishing this year’s report on the Ofcom
website only.
Ofcom welcomes comments on the content and style of The Communications Market
to help inform future publication. Comments and queries should be sent via e-mail to
market.intelligence@ofcom.org.uk.
.
.
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10.
The Communications Market 2004 – Radio
3. Executive summary
UK radio is a growing industry that has gone through significant change in the last 18
months, driven by legislation, the launch of new stations and changing listening
habits.
Recent major developments
Growth in radio listening over non-traditional platforms is increasing. Radio in many
ways is at the forefront of platform convergence with the listener able to access
stations over a wide range of digital platforms, particularly digital television. The
internet has made it possible to listen to radio around the world, while the BBC Radio
Player enables radio on demand, allowing the listener greater flexibility as to when
they listen to their favourite radio programmes.
Three analogue commercial radio stations launched in the first half of 2004 and
Ofcom has announced the timetable and procedure for the licensing of a further 17
FM radio licences from June 2004 onwards.
Although over 1 in 10 of all commercial analogue licences changed hands in the first
half of 2004, significant industry consolidation, as allowed for by the Communications
Act, has yet to occur. Nevertheless both the industry and industry analysts have high
expectations that consolidation will eventually happen.
Community radio legislation was passed in July defining and setting out rules for
community radio, as well as the framework for the advertisement and award of
licences. Ofcom aims to invite applications from September 2004.
The radio industry
Annual radio revenues in the UK are in excess of £1.1bn, with over half of that figure
accounted for by the BBC. The commercial sector has grown significantly over
recent years and has been taking an increasing share of advertising spend in the UK.
The analogue radio industry has 274 commercial radio licensees broadcasting, 5
BBC national networks, 40 local BBC stations and 6 national BBC services.
The UK is the world leader in DAB digital radio, with rapid growth in the number of
digital radio stations and the number of digital radio multiplexes on air. There are
now two national multiplexes (one BBC and one commercial), each offering a range
of stations, and 46 commercial local and regional multiplexes. The Digital One
national commercial multiplex covers over 85% of the population in Great Britain
while the BBC is available to 80% - both are expected to increase coverage over the
coming year. 130 commercial radio stations are broadcasting on DAB digital radio in
the UK, while Sky Digital carries 67 commercial radio stations, Freeview carries 21
stations (and additional specific stations for the regions), NTL carries 42 radio
stations and Telewest 32..
Data services over DAB digital radio could become a new growth area. Multimedia
services such as news, sports, traffic, stock market information and entertainment –
possibly including video clips - to handheld devices are expected to launch over
Digital One’s multiplex during 2005.
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11.
The Communications Market 2004 – Radio
Urban areas tend to have a wider selection of both analogue and digital radio
stations than rural locations. The majority of analogue stations provide mainstream
output (e.g. Adult Mainstream or Chart Led Mainstream), however with the growth of
digital and satellite only stations, ethnic and specialist music or speech services are
increasingly available.
UK radio is dominated by the major groups, many of which have developed strong
quasi-national brands. The growth in the number of stations and the opportunities
provided by digital radio has meant that branding and positioning have become
increasingly important to radio groups and their advertisers.
The citizen-consumer
Total radio listening is on the increase; both the number of people listening and the
length of time they listen on average have grown in the past year. Most people listen
to radio every day, with the highest audiences occurring at breakfast time and the
number of listeners reducing over the course of the day.
Perhaps most striking is the growth in listening to stations only available on digital
platforms, particularly digital television (Sky, cable and Freeview), but also via DAB
digital radio and the internet. In the second quarter of 2004, RAJAR figures show
that 3.4% of all radio listening (36.1 million hours in that quarter) was to stations not
available to listeners in that area on analogue. (Note: This excludes listening via
digital platforms to stations also available on analogue and not all digital-only station
listening is recorded by RAJAR, so total digital radio listening is going to be greater
than this).
Half of all listening is done by people over the age of 45, who take 63% of all BBC
hours. Adult1
men account for 48% of all listening with adult women accounting for
45%. Total adult listening is split 49% to 51% between ABC1 and C2DE
respectively.
The BBC accounts for over half of all listening hours with the BBC network stations
taking the majority of that. The older a person is the higher the proportion of their
listening hours to the BBC - 74% of children’s listening is to commercial stations and
74% of the over 65’s listening is to the BBC.
Across the nations listening varies significantly, with the BBC’s networks being more
popular in England and Wales than in Scotland and Northern Ireland. Commercial
radio listening is highest in Scotland, with listening to UK-wide stations lowest in
Northern Ireland.
The number of DAB digital radio sets in the market has increased rapidly with
607,0002
sets having been sold by the end of May 2004 and forecasts of in excess of
a million sets being sold by the end of 2004. The variety of sets available has also
grown, with 74 different models available at the end of June 2004 and 154 expected
to be on sale by the end of the year3
. Prices for DAB digital radio sets have fallen
with the industry expecting sub-£50 sets to be available by Christmas 2004.
1
Adults are defined by RAJAR as 15 years and older
2
Source: Digital Radio Development Bureau (DRDB)/GfK
3
Source: DRDB
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12.
The Communications Market 2004 – Radio
4. Recent major developments in the
radio industry
The radio industry in the UK is perhaps on the brink of major changes both in the way
people listen to radio and in the structure of the industry itself. Over the past year a
number of developments have signalled what may be to come.
4.1 A brief history of UK radio
The UK radio market today is a product of over 80 years of radio broadcasting in the
UK and 30 years of commercial radio broadcasting (figure 1). Since the first
commercial radio stations came on air in 1973 successive regulatory regimes have
aimed to reduce the burden for radio stations, the number of radio stations has vastly
increased and digital radio has launched.
Figure 1: Major events in radio in the UK
Date Event
1922 BBC radio began broadcasting
1967 BBC Networks re-launched (Radios 1 to 4) and BBC Local Radio began
1972 Sound Broadcasting Act allowed for the start of Independent Local Radio
(ILR), commercially funded, regulated by the new Independent
Broadcasting Authority (IBA)
1973 Capital and LBC, the first UK commercial radio stations launched – all
stations broadcast the same programmes (“simulcast”) on AM and FM
1988 Commercial radio stations encouraged to offer different services on AM
and FM services
1990 1990 Broadcasting Act allowed significant liberalisation of the market;
The Radio Authority (RAu) replaced the IBA; a points system was
introduced to restrict multiple ownership; The RAu no longer provided
transmission; RAu no longer pre-vetted programme schedule and;
allowed stations to choose the amount of advertising per hour; applicants
for licences given greater freedom to propose their own format
1992 Classic FM the first national commercial radio station went on air and
RAJAR (the pan-industry audience measurement body) and RAB (the
Radio Advertising Bureau) launched
1995 BBC launched DAB digital radio services
1996 The Broadcasting Act removed the ceiling of 35 licences which could be
owned by any one company, introducing an overall limit 15% of total
“points”; allowed newspapers to own local stations in their local areas
subject to a “public interest test”; created the foundations for digital radio
development
1999 Digital One, the first national commercial DAB digital radio multiplex
launched
2002 Community Radio (Access Radio) pilot scheme began
2003 Communications Act brought Ofcom into being; ownership restrictions
further liberalised to allow a minimum of “2 + the BBC” owners in any
individual market; new obligation on the regulator to protect “localness”
Source: Ofcom
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13.
The Communications Market 2004 – Radio
4.2 Major industry consolidation yet to happen
At the beginning of 2004, the rules governing commercial radio ownership in the UK
were significantly relaxed. The new rules set out in the Communications Act 2003
increase the scope for media mergers – both within the radio industry and across
media. In effect they allow for radio companies to merge with each other provided
there are at least two radio operators (plus the BBC) in any particular developed
market4
. The controls over who is allowed to own UK commercial radio stations were
also relaxed, allowing for ownership by companies or persons based outside of the
European Union and by religious bodies. The points test for ownership of national
radio stations was also removed.
Following these changes many observers have been expecting consolidation in the
UK radio market. So far this has failed to materialise, but industry analysts consider
that it is probably only a matter of time before major consolidation takes place.
Nevertheless, since the start of 2004 thirty five commercial radio licences have
changed hands. Whilst these were generally small stations, it still means that over
10% of all analogue commercial radio licences in the UK went into new ownership
within six months.
In February 2004 Capital Radio Plc acquired the 81% of Tainside Limited that it did
not already own. Tainside owned two London stations Choice FM in Brixton and
Choice 107.1 in North London. Capital now controls five analogue licences in
London, (the two Choice stations, Capital FM, Capital Gold London and Xfm).
Sunrise Radio Limited, which already held two London analogue licences (Sunrise
and Easy Radio) as well as operating the Sunrise and Yarr digital services, bought
Time 106.8 (based in Thamesmead) and Fusion 107.3 (in Lewisham) from Milestone
Group plc. Sunrise also bought the Soul City FM licence for Havering in East
London, re-branding both this and Fusion 107.3 as Time. In June 2004 - Tristar
Broadcasting which owned the FM licence for Slough and Windsor (broadcasting
under the Star Brand) was acquired from UKRD.
In January 2004 The Wireless Group acquired Forever Broadcasting. Prior to the
acquisition, TWG controlled 13 analogue licences including the national talkSPORT
station. Forever controlled three analogue radio licences: Tower FM (Bolton & Bury),
The Wolf (Wolverhampton) and Peak FM (Chesterfield).
In April 2004 North Wales Newspapers sold its shareholding in Radio Ceredigion to
Tindle Newspapers. Tindle Radio now owns 8 local radio stations.
Also in April 2004 Southampton Leisure Holdings, owners of Southampton Football
Club, took control of South City FM (Southampton). The station is now broadcasting
as The Saint which previously only broadcast on local DAB digital radio and satellite.
In May 2004, Radio Investments Limited was sold by its 3 shareholders (GWR, GMG
and Caledonian Investments) in a buy out backed by City institutions. Radio
Investments Limited comprised 22 local radio stations in the UK and changed its
name to The Local Radio Company before floating on AIM.
4
For the specific rules referring to this see the Media Ownership (local radio and appointed
news provider) order SI 2003 / 3299
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14.
The Communications Market 2004 – Radio
In June 2004 Chrysalis sold its stake in Telford FM to the Midlands News Association
owner of a number of newspaper titles in the West Midlands.
In addition to these full changes of control on the ownership of the stations, Emap
acquired 27.8% of Scottish Radio Holdings in January 2004. Emap commenting on
the transaction said "We believe that there will be opportunities for consolidation
within the UK radio sector now the Communication Bill has been enacted. Against
this background, we regard the stake in SRH as an attractive strategic asset."5
4.3 Listening via other platforms is growing
One of the most significant changes in radio over the past couple of years has been
the growth of listening to radio via digital platforms; particularly digital television (Sky,
cable and Freeview), but also via DAB digital radio and the internet.
In the second quarter of 2004, RAJAR figures show that 3.4% of all radio listening
(36.1 million hours in that quarter from a total of 1,072 million) was to stations not
available to listeners in that area on analogue. In addition, there was almost certainly
a significant amount of listening via digital platforms to stations that were also
available on analogue to those listeners (e.g. the BBC networks and Classic FM)
although at present listening figures for this are not separable from analogue
listening. Further information is given in section 6 below.
Since the start of 2002 the total amount of listening to national (UK-wide) commercial
stations has risen by 27.6%, driven completely by the arrival of new national digital-
only stations, such as Smash Hits. Measured listening to these new national stations
rose more than 17-fold over this period. The share of commercial national stations
listening taken by the three analogue commercial networks fell from 98% to 72% over
this period.
While much of the increase in digital listening has been due to listening via digital
television, for DAB digital radio things are also looking up. After several years of high
expectations by the radio industry but disappointing results, DAB digital radio
coverage and take-up by the public increased significantly during 2003 and 2004.
Four new local commercial multiplexes (also carrying BBC Local Radio) have
launched so far during 2004. Meanwhile Digital One, operator of the UK-wide
commercial multiplex, opened 6 new transmitters, increasing coverage to over 85%,
and the BBC increased the DAB digital radio coverage of its networks to 80%.
Further increases in coverage are planned by the BBC during 2004 to bring coverage
of its DAB digital radio networks up to that of Digital One. (See section 5 below).
By the end of May 2004 a total of 607,0006
DAB digital radio receivers had been
sold, a rise of 227% over the last 12 months, with 176,000 being sold over the
Christmas period (December and January).
In May 2004 GWR and BT Wholesale announced a partnership to provide
multimedia datacasts, such as news, sports, traffic, stock market information or
entertainment – possibly including video clips - to handheld devices such as mobile
phones and PDAs. The new venture will utilise Digital One’s digital broadcasting
capacity, running alongside the eight national digital radio stations. Further
information is given in section 4.
5
Regulatory News Service 16/01/04
6
Source: GfK / DRDB
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15.
The Communications Market 2004 – Radio
Around the world digital radio is gathering momentum
In the US the FCC adopted In-band On-channel (IBOC) as its digital radio standard
(i.e. different standard from the European DAB digital radio Eureka 147 standard) in
October 2002. In April 2004 it invited comments on “what rule changes and
amendments are necessary due to the advent of digital audio broadcasting”.
Italy is introducing legislation which will regulate the entire communications sector.
The Italian Communications agency will have to present regulation for the issue of a
regular licensing regime for DAB digital radio broadcasting within 3 months of the
issue of the law.
The French Parliament is scrutinising the Paquet Telecoms Bill which will include
consideration of DAB digital radio and is expected to create a regulatory framework
for digital broadcasting to evolve.
In Sweden in 2003 the parliament allocated a national DAB digital radio multiplex to
the public broadcaster (Swedish Radio) and most of the capacity on 19 regional
multiplexes to commercial broadcasters. The effect on the radio industry will be
evaluated in 2008.
In May 2003, Korea's Ministry of Commerce, Industry and Energy announced support
for a project to develop Digital Media Broadcasting (DMB) receiver technology. Over
the next five years, the Korean government intends to invest W46 billion in DMB, a
technology that provides high-quality audio and high definition TV services on the
move via DAB digital radio. Terrestrial DMB will allow multimedia services, especially
mobile TV services to be available in Korea using Eureka 147 technology.
Government support of DMB in South Korea has led to a unilateral backing of the
system from broadcasters, manufacturers and research institutes.
In Singapore, the first commercial DAB digital radio-only services in Asia were
launched by MediaCorp Radio Singapore in April 2003. Seven audio stations are
available, including a wide selection of stations such as Chinese Evergreens,
Japanese and Korean pop, Planet Bollywood together with club music, and news and
financial updates from Bloomberg. The multiplex also simulcasts the FM classical
station Symphony.
In April 2004 China said that it “is in the procedure to select DRM for its use on
medium-wave/AM and short-wave”7
, emphasising a commitment to digital radio.
In July 2003, the Federal Government in Australia established a Digital Radio Study
Group to assess the suitability of a range of digital radio platforms for the Australian
market. The Australian Broadcasting Authority (ABA) confirmed its digital radio trials
policy in December 2003 to encourage trials of new broadcast technology. While
confirming the ‘open’ nature of trials (i.e. they are not restricted to incumbents) it also
increases the emphasis on the temporary and non-pre-emptive nature of trials.
4.4 New stations launched
The Radio Authority awarded a number of analogue licences during its final year. Six
stations had not launched before Ofcom replaced the Radio Authority - five of these
are now on air, with the final station, Saga in Glasgow, expected to launch in
September (figure 2).
7
Source: Asia-Pacific Broadcasting Union
- 14 -

16.
The Communications Market 2004 – Radio
Figure 2: New analogue stations on air in 2004
Station Area On air Date
High Peak Radio Buxton, Glossop, Chapel-en-le-Frith, New Mills,
Furness Vale, Hope Valley and Whaley Bridge
April 2004
Kerrang! West Midlands June 2004
97.1 Radio
Carmarthenshire
Carmarthenshire June 2004
97.5 Scarlet FM Llanelli & the Carmarthenshire coast June 2004
Cuillin FM Skye & Lochalsh July 2004
Saga 105.2 Glasgow Expected
September
2004
Source: Ofcom
Note: Radio Carmarthenshire and Scarlet FM and provided under a single licence
In many parts of the country the FM spectrum is now fully used. However a number
of frequencies and areas for new stations have been identified and Ofcom plans to
licence these where possible. A total of at least 30 new FM licences will be issued
over the next three years. Figure 3 shows the timetable announced for advertising
new FM licences over the next 12 months. These licences range in size from small
local areas, such as Ballymena, to regions, such as the Solent.
Figure 3: Planned timetable for advertisement of new analogue local
commercial radio licences
Month 'Larger' licence 'Smaller' licence
June 2004 Edinburgh Blackburn
July 2004 Ashford, Kent
August 2004 Kidderminster
September 2004 Belfast Cornwall
October 2004 Durham
November 2004 Manchester Banbury
December 2004 Norwich
January 2005 Ballymena
February 2005 Solent Region Torbay
March 2005 Swindon
April 2005 Barrow-in-Furness
May 2005 Swansea Northallerton
Source: Ofcom
- 15 -

17.
The Communications Market 2004 – Radio
4.5 Community Radio given the go-ahead
The Communications Act made provision for the launch of permanent community
radio stations and the Community Radio Order became law on 20 July 2004. It set
out a definition and some rules for community radio as well as the framework for the
advertisement and award of licences.
A pilot scheme for “access radio”, now known as community radio, was launched by
the Radio Authority in 2002. 14 of the 16 original stations are currently operating and
the licences are due to expire at the end of 2004. (see section 5 for further details
and research into their effectiveness)
Community radio stations will generally cover very limited geographical areas
(typically with a radius of 5km). They will be run for social gain and to allow
community access - they will not be run for profit.
Ofcom has consulted on the proposed licensing process and commissioned primary
research into community radio. Ofcom aims to invite applications for new licences
from 1 September 2004.
4.6 BBC Charter Review underway
The BBC's activities are governed by a Royal Charter. The current Charter is due to
end in 2006 and the Department for Culture, Media and Sport (DCMS) has begun a
process to review the Charter and decide what changes, if any, should be made for
the new Charter period. The decision on the BBC’s future, including the future of the
BBC’s analogue and digital radio services, is ultimately for Parliament.
In addition to work on the BBC’s Charter Review, the DCMS is also currently carrying
out an independent review of the BBC’s new digital-only radio services for the
Secretary of State. This review is to consider whether, “in providing its digital radio
services the BBC is acting in accordance with the facts and assurances on the basis
of which approval to proceed with the services was given, and that the conditions
imposed by the Secretary of State have been satisfied, it has to produce an
assessment of the market impact of the digital services under review and it has to
provide, within the context of the review of the BBC’s Charter, any views on how
these digital services might develop in future”8
.
8
Source: Terms of reference of the independent review of the BBC digital services
- 16 -

18.
The Communications Market 2004 – Radio
5. The radio industry – new platforms
grow in importance
5.1 Number of analogue stations is growing
The past ten years have seen significant growth in the number of radio stations in the
UK with over a hundred new analogue (AM and FM) stations coming on air (figure 4).
By the end of July 2004, there were 212 local FM commercial radio stations
broadcasting, together with 59 local AM licences, one national FM commercial station
(Classic FM) and two national AM commercial stations (talkSPORT and Virgin Radio)
In addition, the BBC broadcasts 5 analogue radio networks, 40 local radio stations in
England and 2 national services for each of Scotland, Wales and Northern Ireland.
Figure 4: Number of analogue radio stations on-air in the UK
f commercial radio, stations were licensed to cover cities or
parts
ease in the number of stations has been an increase in the
as
325322315309
302296
280
259
231226218
0
100
200
300
400
'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 Jul
'04
Number of Stations
BBC Local
(including
Nations)
BBC National
National
Commercial
Local and
regional
Commercial
Source: Ofcom / BBC
In the early years o
counties, with the aim of providing a single commercial local service to as many
of the UK as possible. Once this objective had been achieved, further licences were
issued to extend choice by providing for stations covering smaller areas, or larger,
regional areas and stations offering different formats than those already broadcasting
in a particular area.
he result of the incrT
choice of listening available, while the growth in the number of smaller stations h
also meant an increased local focus of the station.
- 17 -

19.
The Communications Market 2004 – Radio
Figure 5: Typical availability of analogue stations by area
e.g. Luton Manchester Bristol Northampton Hereford Barnstaple
% of
Pop 12 7 25 27 12 14 3
Source: RAJAR/Ofcom
Listeners in Greater London and the Home Counties currently have the greatest
choice of analogue stations, with over 25 available (figure 5). Rural areas, with
around 10 stations have the least choice, with only one local station in addition to
commercial national services and the BBC.
5.2 Most local commercial stations provide mainstream output
Each station’s licence contains a description of its format. There is no strict definition
of a format – it is up to each licensee to devise its own in its application - but for the
purposes of the analysis in this report, it is possible to group stations into the broad
styles in figure 6.
Figure 6: Station styles
Style Description
Chart Led
Mainstream
"Top 40" radio - includes many of the “heritage” Independent
Local Radio FM stations – e.g. Radio City
Adult Mainstream "Softer" music aimed at a slightly older audience than Chart
Led Mainstream –e.g. Heart FM
Adult Mainstream
and Chat
Includes Contemporary Hit Radio and Adult Contemporary,
but usually with more speech. Tend to be small town / rural
stations or large regional stations – e.g. Century 106
0
5
10
15
20
25
30
Greater
London
Home
Counties
Metropolitan Large tow n Medium tow n Small tow n Rural
Number of Stations
Regional /
local
commercial
National
commercial
BBC local
BBC national
- 18 -

20.
The Communications Market 2004 – Radio
Style Description
35+/Gold Music predominantly from the 1960s-80s. Many are on AM
– e.g. Capital Gold 1152
Specialist Music –
Youth Orientated
Niche and more specialist music genres for younger
audiences, such as Dance, RnB and Alternative Rock – e.g.
Galaxy 102
Specialist Music –
Other
Music rich stations covering more specialist genres (e.g.
Jazz, Country) focused on an older audience – e.g. Jazz FM
Specialist News
and speech
Stations playing very little or no music – e.g. LBC
Ethnic Ethnic stations target specific ethnic audiences, most are
currently targeted at Asian audiences – e.g. Sabras Sound
Source: Ofcom
The majority (52%) of stations on analogue frequencies fall into the Adult Mainstream
style (figure 7).
Figure 7: Analogue stations by style (based on number of licences)
ource: OfcomS
Adult Ma nstre 19 1%am
Chart led
%
News and Speech3%
Ethnic
i
52%
Music (Youth)
5%
Adult Mainstream
16%
Music (Other)
1%
35+/Gold
Specialist
8%
& Chat
3%
- 19 -

21.
The Communications Market 2004 – Radio
Figu alogue avail rent radio styles
opt the Adult Mainstream style.
addition to the national stations, Virgin, talkSPORT and Classic FM, Chart Led
ainstream and 35+/Gold local stations are available in most parts of the country.
.3 Regional stations have added to choice
he first Regional station, Jazz FM (as it was then called) in the North West,
unched in 1994 with the latest, Kerrang! in the West Midlands, launching in June
004. Regional stations tend to offer more varied formats than local stations (figure
), as they were awarded to complement the existing stations, which tended to be
hart-led mainstream. They also have a larger listener base which can support
ore specialist formats, but limited frequencies mean that the formats available in
ach region vary widely.
re 8: An ability of diffe
90%
61%
21%
33%
32%
76%
37%
97%
0%
20%
40%
60%
80%
100%
Ch rt Led Adult
Chat
35+/Gold Specialist Specialist Specialist
ch
Ethnic Adult
Mainstream
% of population
a
Mainstream & Music Youth Music Other News/Spee
Source: Ofcom
There is not a direct correlation between the number of stations of a particular style
and the availability of such stations (figures 7 and 8) – e.g. there are more Adult
Mainstream stations than any other style, but they only cover around 76% of the
population, as they are largely either regional or small town stations.
There is little duplication of formats in individual analogue markets. This is largely
due to the statutory requirement that licences are awarded with regard to the extent
that the choice of services available in the area is broadened. Where there is
duplication, it tends to be a local Chart Led Mainstream (on FM) or 35+/Gold (often
on AM) services competing with a larger station of the same format from the nearest
big city.
Where Chart Led Mainstream and 35+/Gold stations were already available (a legacy
of original ILR stations splitting frequencies in the late 80s / early 90s) new entrants
to the market, whether serving a smaller area within an existing licence or a regional
station, have tended ad
In
M
5
T
la
2
9
c
m
e
- 20 -

22.
The Communications Market 2004 – Radio
There has been strong competition for the award of regiona
Midlands licence, awarded to Emap’s “Kerrang!”, had 11 ap
l licences. The third West
plicants offering a wide
variety of formats – five rock applications, two talk, jazz, children’s, asian and
country.
Regional licences currently cover much of the UK (figure 10), although there are a
number of geographical areas which only have national and/or local commercial
services.
Figure 9: Regional commercial radio stations
Region Station Format Owner
Start
Date
Beat 106 Specialist Music – Youth
Orientated
Capital Nov ‘99Central
Scotland
Real Radio Adult Mainstream and chat GMG Sep ‘94
Galaxy 105-106 Specialist Music – Youth
Orientated
Chrysalis Jun ‘99
100-102
Century
Adult Mainstream and chat Capital Sep ‘94
North East
TBA
Smooth Specialist Music – Other GMG Sep ’94North West
105.4 Century Adult Mainstream and chat Capital Sep ’98
Galaxy 105 Specialist Music – Youth
Orientated
Chrysalis Feb ’97Yorkshire
Real Radio Adult Mainstream and chat GMG Mar ’02
100.7 Heart fm Adult Mainstream Chrysalis Sep ’94
Saga 35+/Gold Saga
Group
Oct ’01
West
Midlands
Kerrang! 105.2 Specialist Music – Youth Emap Jun ‘04
Orientated
106 Century Adult Mainstream and chat Capital Sep ’97East
Midlands
Saga 106.6 FM 35+/Gold Saga
Group
Feb ’03
East Vibe 105-108 Specialist Music – Youth
Orientated
SRH Nov ’97
Wave 105 FM Adult Mainstream and chat SRH Jun ’98Solent
TBA
Severn
Estuary
Vibe 101 Specialist Music – Youth
Orientated
SRH Sep ’94
South Wales Real Radio Adult Mainstream and chat GMG Oct ‘00
Source: Ofcom
- 21 -

23.
The Communications Market 2004 – Radio
Figure 10: Coverage and location of analogue regional licences
Source: Ofcom
5.4 AM radio targ
T re two na l and talkSP
commercial AM stations in the UK. Perhaps because of the lower soun
AM stations tend to have lower audiences and are generally targeted at older
audiences than FM. However there are wide variations in reach a e across
the individual AM
Of the local statio 9 lo b fou
g pital m , Classic Gold Digita cott
Radio Holdings ( in the 35+/Gold ca
T er audien nco ding of A
s As a re fo ita and
Gold) carry signi f s am
Apart from the four main groups, out ns serve either ethnic
audiences or rur here the
O t he op .
tends to et older audiences
here a tional commercia AM stations (Virgin ORT) and 5
d quality the
9 local
nd shar
stations
ns, 41 of the 5 cal AM licences are operated y one of r
roups – Ca (Capital Gold), E
figure 11) and the
ap (Magic)
majority are
l and S
tegory.
ish
he low ces affect the i me and therefore the spen ability M
tations. sult, three of the
ficant amounts o
ur major groups (Magic, Cap
yndicated (networked) progr
l Gold
ming.
Classic
side London, most statio
re is little FM competition.al areas, w
fcom is curren ly looking at t tions for further AM licensing
- 22 -

24.
The Communications Market 2004 – Radio
Figure 11: AM radio licences
Source: Ofcom
5.5 Ethnic stations broadcast mainly on AM
The majority of stations for ethnic audiences are on AM although most would prefer
to be on FM. Most tend to focus on urban areas (figure 12).
Figure 12 – Analogue ethnic radio licences
Source: Ofcom / BBC
- 23 -

25.
The Communications Market 2004 – Radio
In addition to those stations on an
stations for ethnic audiences in L
alogue there are also further DAB digital radio
ondon, Leicester and Bradford. There are also 26
ethnic radio services available via the Sky Digital Television platform.
A number of commercial analogue stations which have a focus on a different style
also produce programming aimed at an ethnic audience e.g. Star 106.6 (in Slough
Windsor and Maidenhead) has a largely Adult Mainstream style, however it also has
the “Asian Star” programmes on the weekend which are targeted at Asian audiences.
5.6 Demand for RSLs has been steadily increasing
There are two main types of Restricted Service Licence (RSL) stations:
• Short-term RSLs broadcast at low power over a fairly small area for a
limited period – a maximum of 28 days. They tend to be of three types:
• Groups wishing to apply for a permanent licence to allow them to “test
the water” and gain experience
• Digital stations wishing to advertise their permanent digital service by
broadcasting it for a limited period on analogue
• Stations linked to a particular festival, sports coverage or a religious
festival (e.g. Ramadan)
• Long-term RSLs – Single-site services (e.g. Hospital Radio, University
Radio)
Stations can be either on AM or FM, depending on frequency availability. The band
87.5 – 88.0 MHz has been reserved for RSLs.
The demand for short term RSLs has continued to increase over recent years (figure
Source: Ofcom
13) and in 2003 493 short term RSLs were awarded.
Figure 13: Growth in the demand for short term RSLs
Number of licenses
178 188
318 324
393
423
493
450
262
350
464
343
241
0
100
200
300
400
500
600
'91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03
- 24 -

26.
The Communications Market 2004 – Radio
Long term RSLs are given to non-commercial establishments, as shown in figure
the majority of which are currently hospitals. As of June 2004 there were 124 long
term RSLs on air.
14
Source fc
5.7 The community radio pilot scheme
ermanent community
on 20 July 2004. It sets
r (the ‘first tier’);
Figure 14 - Long term RSLs by establishment
Number of licenses
: O om
Community Radio can offer highly localised services catering for a particular area or
ommunity of interest. In 2002 the Radio Authority set up a community radio pilotc
project (then called “access radio”). The first station launched in February 2002 and
was followed by a further 15 across the UK as shown in figure 15. Fourteen of the
original pilot stations are still on air (figure 16).
The Communications Act made provision for the launch of p
radio stations and the Community Radio Order became law
out a definition and some rules for community radio as well as the framework for the
advertisement and award of licences.
Ofcom has consulted on the proposed licensing process and aims to invite
applications from 1 September 2004. There will be a twelve week period between
the invitation for applications and the closing date of 23 November 2004 after which
the awards will be made in batches on a rolling basis over several months.
Decisions on the licence awards will be made by the Radio Licensing Committee
based on eight criteria which have been laid down by parliament9
.
The likely effect of the proposed service on the economic viability of any local
commercial radio service was the area which led to the most feedback during the
Ofcom consultation process. The Community Radio Order now sets out three rules
relating to this issue:
(a)There should be no community service stations licensed which would
overlap by 50% or more with the coverage area of an existing commercial
radio station with a measured coverage area (MCA) of 50,000 adults or
fewe
9
See “Licensing Community Radio” on the Ofcom website for full details of the criteria.
33
7
0
10
20
H chool
53
50
60
40
18
30
13
ospital University Forces College S
- 25 -

27.
The Communications Market 2004 – Radio
(b)Any community radio station which would overlap by 50% or more with the
coverage area of an existing commercial radio station with an MCA of
greater than 50,000 adults and fewer than 150,001 adults will not be allowed
to take any paid-for advertising or programme sponsorship (the ‘second
tier’);
(c)Ofcom should have regard to the need to ensure that any community radio
service does not prejudice unduly the economic viability of any other local
service (‘third tier’).
Figure 15 - Pilot community radio stations
Source: Ofcom
Ofcom commissioned primary research10
looking at four of the community stations
which were running in order to assess the overall impact of community radio in terms
f who is listening and what benefits these listeners feel are being delivered, both on
ed to station
articipants to see what they have gained out of the pilot and to community leaders
neral.
ities of interest and communities of place as well as a range of
eographical locations and socio-economic settings.
o
a personal and social level. Audience research is not the only measure of the
performance for community radio and the research agency also talk
p
to explore the impact they have seen the stations have on the community in ge
The four stations11
were selected to represent a mix of community radio projects,
serving both commun
g
ich are published on the Ofcom website (“Licensing Community Radio” Anne10
Details of wh x
1)
11
The four stations were Forest of Dean Radio, ALL FM, Awaz FM and Angel Radio
- 26 -

28.
The Communications Market 2004 – Radio
The research data indicated that the community radio experiment has had some
positive results:
• areas
• id
enhanced their personal well-being and sense of community
• community leaders typically saw community radio as delivering tangible
Overall, at the public typically perceived community radio as
ell-run, relevant and entertaining - and clearly different to the existing radio product
ers.
However, it appeared from the results of the research that the concept of community
radio was easier to communicate to a target audience that was linked by interests,
than to an audience that was linked by area:
• in the former instance, relevant groups quickly identified that the station
was “for them” and spotted that participation/involvement was being invited
• communities of interest expressed an emotional investment in their
community, as well as clear reference parameters for identifying relevance
and meaning in broadcast content
• communities of place suffered from variable coherence in terms of their
sense of community - some communities were more conceptual than
actual, while others suffered from blurred boundaries and the absence of a
core philosophy with which to bind the audience together. Consequently,
listeners seemed to take much longer to recognise that the station was “for
them” and that participation/involvement was being sought.
Figure 16: Status of pilot community radio stations
Station Area and description Date started
significant numbers of the radio-listening population in the four station
are aware of, and listening to, community radio
both those listening to, and participating in, community radio generally sa
that it
benefits for their local communities.
the research found th
w
offered by either commercial or public broadcast
ALL FM
96.9 MHz
Ardwick, Longsight and Levenshulme,
Manchester. Caters for the whole
community in this culturally diverse area
5 June 2002
Angel Radio
101.1 MHz
Havant, Hampshire. Aimed at the over-60s. 1 March 2002
Awaz FM
107.2 MHz
Central Glasgow. For the Asian population. 29 April 2002
BCB
96.7 MHz
Inner-city Bradford. Service for the diverse
communities of Bradford.
1 March 2002
Cross Rhythms
City Radio
101.8 MHz
Stoke on Trent. Community Radio from a
Christian perspective.
28 February 2002
Desi Radio
02 kHz
Southall, West London. For the Punjabi
population.
10 May 2002
16
Forest of Dean
Radio
1521 & 1503 kHz
Forest of Dean, Gloucestershire. Serving a
population spread over a large rural area.
19 July 2002
- 27 -

29.
The Communications Market 2004 – Radio
Station Area and Description Date Started
GTFM Pontypridd. Two partners, a resid
106.9 MHz association and the University, run a
service aimed at the whole community.
ents’ 27 April 2002
N
98.7 MHz
ew Style Radio Central Birmingham. African- Caribbean 14 August 2002
community.
Northe
Radio
100.6 H
rn Visions Belfast. A speech-oriented service for the 9 March 200212
M z
whole community.
Shine
106.1 H
month project
FM
M z
Banbridge, Northern Ireland. A Christian
group operated a service for the whole
community. (This was a 3-
21 September
200213
only.)
Sound Radio
1503 kHz
East London. Catering for the diverse
population of the area.
26 July 2002
Radio Faza Nottingham. Two partners (the As
97.1 MHz Women’s Project and the Karimia Insitute)
serve the South Asian community of
Nottingham.
ian 25 March 2002
R
1
esonance FM South Bank and Bankside
04.4 H
, central London. 1 May 2002
M z The London Musician’s Collective run a
project of experimental sound and music.
Takeo r
103.2 H
ve Radio
M z
Leicester. A service for children and their
families.
23 March 2002
Wythensh
FM 97
awe Wythenshawe, Manchester. For the whole 6 May 2002
.2 MHz community.
Source: Ofc
5.8 Cho
he increase in the number of radio stations available on digital platforms such as
l radio has been one of the
logue sta of platforms as shown in
alf of al lable s e
45% o AB digital radio.
ening b ion
om
ice via digital platforms continues to grow
T
digital television, combined with the growth in DAB digita
most significant trends in UK radio over the past couple of years.
Many ana tions are now available on a wide variety
l analogue commercial stations are avai
f analogue stations are also available on D
figure 17 - h
internet and
treamed on th
stDetails on li to radio on the internet and on television can e found in sect
6.
12
Finished June 2003
13
Finished December 2002
- 28 -

30.
The Communications Market 2004 – Radio
Figure 17: Analog m
Source: CRCA/Ofcom
On analogue frequencies (AM and FM) the majority (52%) of stations fall into the
Adult Mainstream style. However, as competing platforms increase the number of
available stations, for less mainstream markets may be addressed. Half of the DAB
digital radio only stations are specialist stations (figure 18). Of the 65 satellite-only
stations, ethnic stations account for 39% while specialist speech and music stations
account for a further 43% (figure 19)
Although there are still coverage gaps, the growth of digital radio is starting to
address the disparity between different urban areas with typically around 30 stations
being made available through DAB digital radio (up to ten on each of the BBC, Digital
One, and the regional and local multiplexes).
Figure 18: DAB digital radio only stations by style
ue stations available on alternative platfor s
45%
5%
1%
50%
7%
0%
10%
20%
30%
40%
50%
60%
Internet DAB Satellite Cable Freeview
Source: Ofcom
Chart led
12%
Music (Other)
22%
Music (Youth)
18%
Adult Mainstream
& Chat
9%
Ethnic
9%
35+/Gold
9%
News and Speech
9%
Adult Mainstream
12%
Specialist
50%
- 29 -

31.
The Communications Market 2004 – Radio
Figure 19: Satellite only stations by style
vis
Chart le
2%
Ad
pecialist
43%
h)
35+/G
2% d Speech
%
d 6%
Adult Mainstream
8%
Ethnic
39%
ult Mainstream &
Chat
6%old
News an
Music (Other)
14%
S
Music (Yout
23
Source: Ofcom
Of the digital tele
(figure 20).
ion platforms Sky provides the largest number of radio stations
- 30 -

32.
The Communications Market 2004 – Radio
Figure 20: Radio stations available via DAB and via digital television platforms
Radio station
NTL
Telewest
Sky
Freeview
DAB
Radio station
NTL
Telewest
Sky
Freeview
DAB
BBC 1Xtra Jazz FM
BBC 6 Music Kerrang!
BBC 7 Kiss 100
BBC Asian Network LBC 97.3
BBC Radio 1 Lyric FM
BBC Radio 2 Magic Radio
BBC Radio 3 Mojo Radio
BBC Radio 4 Oneword
BBC Radio 4 LW Panjab Radio
BBC Radio Cymru* Planet Rock
BBC Radio Five Live Premier Christian Radio
BBC Radio Five Live Sports Extra Primetime Radio
BBC Radio nan Gaidheal* Pure Dance
BBC Radio Scotland* Q Radio
BBC Radio Ulster*
BBC Radio Wales*
Raidió na Gaeltachta
Real Radio
C World Service RTÉ Europe
Sunrise Radio
talkSPORT
The Villan
TWR - Trans World Radio
UCB Bible
Easy Radio 1035 UCB Talk
EWTN Global Catholic Radio Virgin Radio
Family Radio WRN Euromax English
FCUK FM XFM 104.9
Galaxy 105 Yarr Radio
Gaydar Radio relevant Local Radio station(s)
Heart 106.2 FM * Only available in relevant nation on Freeview
Heat Radio DAB availability varies by area
BB
BBC World Service Extra RTÉ Radio 1
BBC Radio Foyle* RTÉ Radio 2
Akash Radio SBN
Amrit Bani Smash Hits!
Apple FM Solar Radio
Asian Gold Radio Spectrum 1
Big Blue Sukh Sagar Radio
Calvary Chapel
Capital Disney
Capital FM The Arrow
Capital Gold 1548 The Hits Radio
Century FM The Mix
Choice FM 96.9 The Saint
Classic FM The Storm
Classic Gold Digital
lub AsiaC
Core
Cross Rhythms UCB Europe
Desi Radio UCB Inspirational
Source: Ofcom
5.9 DAB digital radio take-up growing rapidly
The BBC launched the first DAB digital radio broadcasts in September 1995 with
simulcasts of its existing national analogue stations and in 2002 it launched five new
digital only services on the national multiplex. Digital One was awarded a national
commercial multiplex licence in 1998 and went on air in November 1999. Since then,
local and regional commercial multiplexes have been steadily licensed and have
come on air (figure 21).
- 31 -

33.
The Communications Market 2004 – Radio
Figure 21: Number of DAB digital radio multiplexes on air
o date 47 commercial digital multiplexes have been awarded: one national multiplex
operated by Digital One, with the rest local or regional. So far this year five new local
multiplexes have come on air with a further two expected later in the year (figure 22).
All 47 licences will then be operating.
Figure 22: New multiplexes coming on air in 2004
Operator Area Date
Source: Ofcom
T
Capital Radio Digital Sussex Coast January 2004
Capital Radio Digital Kent April 2004
Now Digital Nottingham April 2004
TWG EMAP Digital Stoke-on-Trent April 2004
Now Digital Reading & Basingstoke July 2004
Now Digital Cambridge Expected Sept 2004
Now Digital Plymouth & Cornwall Expected Sept 2004
Source: Ofcom
There are still a number of gaps in local coverage, partly due to a lack of frequencies
at present and partly because those areas where frequencies are available, such as
the Scottish Borders, were regarded as being commercially unviable by the Radio
Authority and prospective applicants for the multiplex licences. Ofcom will consider
currently unserved areas as part of its review of digital radio due this autumn.
5.10 UK DAB digital radio coverage improving
DAB digital radio coverage of households has been improving over recent years, with
the majority of the population now being covered as shown in figure 23. The BBC
47
6
16
28
37
44
0
5
10
15
20
25
30
35
40
45
50
Q2
'00
Q3
'00
Q4
'00
Q1
'01
Q2
'01
Q3
'01
Q4
'01
Q1
'02
Q2
'02
Q3
'02
Q4
'02
Q1
'03
Q2
'03
Q3
'03
Q4
'03
Q1
'04
Q2
'04
Q3
'04
Number of Multiplexes
Q3
'99
Q4
'99
Q1
'00
47
6
16
28
37
44
0
5
10
15
20
25
30
35
40
45
50
Q2
'00
Q3
'00
Q4
'00
Q1
'01
Q2
'01
Q3
'01
Q4
'01
Q1
'02
Q2
'02
Q3
'02
Q4
'02
Q1
'03
Q2
'03
Q3
'03
Q4
'03
Q1
'04
Q2
'04
Q3
'04
Number of Multiplexes
Q3
'99
Q4
'99
Q1
'00
- 32 -

34.
The Communications Market 2004 – Radio
initially launched DAB digital radio across the UK with the commercial sector driving
the next phase of growth of DAB digital radio coverage with the BBC improving its
coverage particularly in the last two years
: DAB digital radio coverage
Number of
transmitters
(as at June
2004)
Population coverage
Figure 23
UK England Wales Scotland Northern
Ireland
BBC 71 Approx.
80%
n/a n/a n/a n/a
Digital One 83 86%14
89% 76% 53% n/a
Local
commercial15
190 85% 88% 92% 74% 100%
Source: BBC, Digital One, Ofcom
The BBC has continued to increase its digital coverage, although it still lags behind
the coverage of both the local commercial digital stations and Digital One. With the
switch on of the Charing Hill DAB digital radio transmitter in Kent in June 2004 it
brought coverage up to 80% of the population and has a target of 85% coverage by
the end of 2004 (figure 24). The significant increase in the number of transmitters
that the BBC has switched on in 2004, as shown in figure 26 is part of a specific
project started in 2003 to increase BBC DAB digital radio coverage to 85% by mid
2004.
14
Percentage coverage of Great Britain (Digital One does not have a licence for Northern
Ireland)
15
Population coverage for local commercial digital multiplexes shows the percentage of the
population living within licensed areas. Not everyone living within these areas will be able to
receive the services at present as transmitter networks are not complete. Actual coverage
varies by multiplex and ranges between around 70% and 95% of the licensed area.
- 33 -

35.
The Communications Market 2004 – Radio
Figure 24: BBC DAB digital radio coverage
Source: BBC
Digital One, with its transmission partner NTL, reached 85% coverage in July 2003
(figure 24). The company has switched on 7 transmitters so far in 2004 and plans to
witch on another in Tunbridge Wells later this yes ar.
Figure 25: Commercial DAB digital radio coverage
S
N
ource: Ofcom
ote: Digital One does not have a licence to cover Northern Ireland
- 34 -

36.
The Communications Market 2004 – Radio
Figure 26: New DAB digital radio transmitters switched on January - June 2004
BBC
Digital One (National
commercial)
Local
Trans rea
covered
Transmitter Area coveredmitter Area covered Transmitter A
Beacon Hill Torbay Ashford East Kent Ashford Kent
Bincombe Hill East Kent Bluebell Hill KentWest Dorset Chartham
Charing Hill East Kent ChelmsfordDanbury Chatham Kent
Danbury Chelmsford m East Kent Thanet KentFaversha
Darvel Ayrshire Stoke Holy
Cross
rfol sa
Bank
No k Al gers Stoke-on-Trent
Durris berdeenshire et Ken Pye Green S -on-TrA Than East t toke ent
Fenham tle Stoke tford Sutto
Common
-on-TrNewcas
upon Tyne
Lark Stra
on-Avon
- n Stoke ent
Keighley ighley Tick -on-TKe Hill Stoke rent
Kirkton Maile Mapperley
Ridge
Nottinghamshirer Perth
Lanca Waltham Nottinghamshirester Lancaster
Lark S asttoke Warwickshire Beddingham
Hill
Sussex Co
Madingley Cambridge Whitehawk
Hill
Brighton
Meldr astum Aberdeenshire Burton Down Sussex Co
More
Bay Furness
astcambe Barrow-in- Findon Sussex Co
Mount Eagle Inverness Hastings Sussex Coast
Pendle Forest N E Lancs Carmel Swansea
Ridge Hill Herefordshire Kilvey Hill Swansea
Sandale N Cumbria &
Dumfries
St Hilary Swansea
St Thomas
Exeter
Exeter
Stockland Hill East Devon
Wickhambrook West Suffolk
Source: BBC, Digital One, Ofcom
Currently all of the DAB digital radio multiplexes are owned or controlled by the large
analogue radio groups either directly or as part of a consortium (figures 27 and 28).
Typically the local multiplex owner is the same as the owner of the local heritage,
R station. Under the terms of the Broadcasting Act 1996, the local andanalogue IL
nations’ BBC stations have a right to be carried on the relevant local commercial
ultiplexm . Almost all of these rights have been exercised.
- 35 -

37.
The Communications Market 2004 – Radio
Figure 27: UK DAB digital radio multiplex operators
Type Number Operator (Number)
National 2 BBC (1), Digital One (1)
Regional 6 Switch Digital (1), MXR (5)
Local 40 CE Digital (3), Capital (4), Digital Radio Group (1), Emap
(7), Now Digital (13), Now Digital (East Midlands) (1)
Score Digital (6) , Switchdigital (2), TWG (1),
TWG/Emap (2)
Source: Ofcom
Figure 28: Regional and local DAB digital radio multiplex ownership
Source: Ofcom
Listener choice is greatest where there are local and regional commercial multiplexes
in addition to the national ones but there are significant areas where choice is limited
or non-existent, (figure 29).
- 36 -

38.
The Communications Market 2004 – Radio
9: i i sta
chester Bristol Northampt C
25 27 12
: Ofco
Dig io driv s growth f new “n tional” sta ons
digital radio has allowed the introduction of new national
n f qu si-national stations (figure 30).
f the 130 commercial radio stations broadcasting on DAB digital radio, three are
mmercial stations (Classic FM, Virgin and talkSPORT),
alogue stations (e.g.
Figure 2 Typical availab lity of DAB d gital radio tions by area
e.g. Luton
0
19
29
43
54
Greater
London
Home Metropolitan Large tow n Medium tow all tow n Rural
ta
8
36
0
10
20
30
40
50
60
Counties
n Sm
Number of S tions
Loca
Com
l
mercial
(DAB)
BBC (DAB)
Natio
Comm
nal
erical
B)(DA
Man on Carlisle aernarfon
% of
Pop 12 7 14 3
Source m
5.11 ital rad e o a ti
Across the
stations a
country DAB
d a number o a
O
simulcasts of the national co
2 are digital-only stations (e.g. Gaydar), 14 offer existing an3
Kiss) to new areas of the country and 81 are DAB digital radio simulcasts of existing
analogue stations within their local licence areas (e.g. BRMB). The BBC offers local
or nations stations on 45 of the 46 local multiplexes (note: the BBC has guaranteed
capacity for its local and nations stations on local commercial multiplexes).
- 37 -

39.
The Communications Market 2004 – Radio
Figure 30: Availability of DAB digital radio stations across the UK
ource: Ofcom
NI
Station
LO
Live
Manchester
Lancashire
Sheffield
Leeds
Br
EYorks&NLincs
Teesside
ast
ire
Torbay
&Cornwall
e
th
Newport
Swans
Ayrs
Glasgow
Edinburgh
Dundee&Perth
Aberdeen
Inverness
NIreland
3C
A Plus
Abracadabra
Access Channel
Access Radio Taysid
Capital Disney
Capital Gold
Century
Classic FM
Classic Gold
Core
DNN
Galaxy
Gaydar
Heart
Heat
Jazz FM
Kent Digital Extra
Kerrang!
Kiss
Life
Magic
Oneword
Panjab Radio
Passion for the Planet
Planet Rock
Prime Time
Real Radio
Saga
SBN
Smash Hits
Smooth
Soton Hosp Bcast
Storm
Sunrise
Swale Sound
Swindon FM
TalkSport
The Arrow
The Hits
The Mix
Travel Now
UCA Radio
Urban Choice
Virgin Radio
Virgin Classic Rock
Virgin Groove
XFM
YARR
Zeta
Other analogue Local
stations
4 1 2 1 3 3 3 3 1 1 2 1 2 2 2 1 2 2 3 1 1 2 4 1 2 1 2 1 1 1 1 2 2 4 3 2 4 2 4
BBC Local 1 1 1 1 1 1 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 1 1 1 2 2 2 2 2 2 2 2 1
Total 42 27 25 27 28 28 24 27 27 27 28 28 27 13 17 17 17 15 19 16 15 15 18 14 17 15 16 18 16 26 22 21 18 26 25 16 17 5 9
Station only available on digital in this area
st Wales ScotlandS WestSouth WestNDON
rpool
adford
Tyne&Wear
Birmingham
Wolv/Shrop
Coventry
Stoke
Leicester
Nottingham
Peterborou
Cambridge
Norwich
Essex
Kent
SussexCo
SHampsh
Reading
Bournemouth
Exeter&
Plymouth
Swindon
WWiltshir
Bristol&Ba
Cardiff&
ea
hire
gh
S
e
1 1 1 1
Station available on analogue in this area
N We W Midlands E Mids Easast tYorks N E
- 38 -

40.
The Communications Market 2004 – Radio
5.12 Data over DAB digital radio a new growth area
ata on DAB digital radio is currently at a basic level often only providing, “Now and
ext” information about programmes and tracks. The BBC is allowed to use up to
s can
ther data to
AB digital radio sets.
In May 2004 GWR and BT Wholesale announced a partnership to provide
multimedia datacasts over the Digital One national multiplex. The new venture will
utilise Digital One’s digital broadcasting capacity, running alongside the eight national
digital radio stations. They plan to launch their services in the M25 area during 2005
with national services by the end of 2006. The services will use digital radio capacity
to transmit, multi-media content, such as news, sports, traffic, stock market
information or entertainment, to handheld devices such as mobile phones and PDAs.
5.13 Radio industry revenues have increased rapidly over the
last decade
Net commercial radio revenues16
rose over the period 1994 to 2000, before falling
back slightly during the advertising recession of 2000-01 (figure 31). In 2003, total
industry revenue was £1.1bn, of which commercial radio revenue accounted for
£543m. This represented an increase for commercial revenue of 6.7% over the
previous year (Indications for 2004 are positive as net commercial revenues for the
year to March 2004 were £553m). The fastest growing sector was local advertising
which grew by 11.6% in 2003 although at £306m national advertising was still the
most significant source of commercial radio revenues.
igure 31: UK Commercial radio revenue (net) and BBC radio spending
D
N
10% of its own multiplex capacity for data, while the commercial operator
provide up to 20% on theirs. Currently there is still capacity to provide fur
D
F
£m
163
146141145149153
ource: RAB/Ofcom/BBCS
Note: net radio revenue excludes commission16
219
264
330
293 291
306
200
400
543
536
587569
1,130
1,0771,0201,044
600
800
1,200
924867
1,000
509495
413372
525
509
510495
75716261
0
'98 '99 '00 '01 '02 '03
Local (commercial) National (commercial)
Sponsorship (commercial) Total Commercial
BBC expenditure Total
- 39 -

41.
The Communications Market 2004 – Radio
The BBC is a significant financial element in the UK radio industry. However
commercial radio revenue is increasing and in 2003 stood at £543m (figure 31), not
far short of the BBC’s £587m.
Radio’s share of total display advertising has increased over the last decade and in
2003 stood at 4.5%17
(figure 32). Indications from the first half of 2004 show this
figure to have risen further. This increase in the share has been due to a
combination of the efforts of the Radio Advertising Bureau and the increase in the
number of commercial stations, particularly the regional stations.
Figure 32: Radio share of display advertising
Source: The Advertising Association
41% of analogue commercial radio revenue in 2003 was taken by the stations in the
Chart-led mainstream style (figure 33). The large share arises because they tend to
be the well-established original ILR, or “heritage”, stations (such as BRMB and Radio
City) and are targeted at the age-group most attractive to advertisers. However, new
entrants are increasingly taking a share of the market.
13.1
12.812.5
13.1
11.9
11.0
10.2
9.4
8.5
7.8
7.1
4.5%4.3%4.3%4.6%
4.4%
4.2%
3.8%
3.7%
3.5%
3.1%
2.8%
2
4
6
8
10
12
14
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
£ ('000m)
0%
1%
2%
3%
4%
5%
Total display advertising Radio share of total
17
Note: The display advertising market as defined by the Advertising Association includes
ispla ss, television spot advertising (not sponsorship), direct mail, outdoor & transport,
dio spot advertising (not sponsorship), cinema and internet (it excludes all sponsorship and
ss classified advertising).
nt definition to that adopted by the Radio Advertising Bureau which includes
radio sponsorship and promotions and excludes direct mail, cinema and internet
d
ra
y pre
promotion and pre
This is a differe
- 40 -

42.
The Communications Market 2004 – Radio
Figure 33: Split of revenues for analogue only stations in Q1 2004
f more
Figure 34: Groups split by number of licences owned
35+/Gold
Specialist
17%
7%
Chart Led
and Chat
Adult Mainstream
28%
Ethnic
1%
Adult Mainstream
Mainstream
41% 6%
Source: Ofcom
5.14 A small number of large groups dominates UK radio
The UK commercial radio landscape is dominated by a number of major groups.
Over half of all analogue stations in the UK are in the 7 groups which consist o
than 10 stations (figure 34).
Emap
6%
Capital
8%
Classic Gold
8%
SRH
8%
GWR
12%
2 to 5 stations
in group
9%
Local Radio
Company
8%
Independents
18%
TWG
6%
6 to 10
stations in
group
17%
Total ‘other’
44%
Source: Ofcom
- 41 -

43.
The Communications Market 2004 – Radio
In addition to the 7 groups with more than 10 stations, 3 other groups have a
significant impact on the industry either through their share of listening hours or their
ownership of key stations (figure 35). Chrysalis owns 8 analogue licences, which are
ll London or regional stations with brands such as Heart and Galaxy, which gives it
f
nds.
g hours.
Figure 35: Audience shares of commercial hours
ource: RAJAR Q1 2004
evenues split broadly in line with audience share (figure 36), although Capital takes
a
11% of all listening hours. GMG with 5% of all listening hours is significant in the
radio landscape due to its wide coverage of the UK through its ownership of four o
the regional licences which carry the Real Radio, Jazz FM and Smooth bra
SMG, owner of the Scottish and Grampian Television licences, is also important in
radio with ownership of Virgin Radio, which takes 3% of all listenin
Capital
15%
Emap
14%
GWR
21%
SRH
8%
Independents
and other
groups
16%
GMG
5%
Chrysalis
11%
TWG
7%
SMG
3%
S
R
more advertising than its audiences would suggest due to the premium which the
UK’s oldest commercial radio station, Capital FM, still attracts. Meanwhile GWR
with its ownership of Classic FM and medium-sized local stations attracts a smaller
revenue share than audiences would suggest.
- 42 -

44.
The Communications Market 2004 – Radio
Figure 36: Shares of commercial stations revenue
ise of quasi-national brands
he growth in the number of stations and the opportunities presented by digital radio
itical
pital, Emap and GWR have the largest brand
ortfolios. The charts in the following individual company sections map the brands’
The growth of quasi-national brands (albeit with locally produced programmes) such
as Century and Galaxy, has allowed more sophisticated programming and larger
promotional budgets which may have an effect on listening levels and loyalty. As yet
there is no sign that such branding allows stations to charge higher rates, although it
is making it easier for advertisers to target markets.
BBC radio’s audience tends to be older, wealthier and more male than that of
commercial radio. However with growing segmentation, commercial stati
as Saga) are increasingly serving the needs of these listeners.
Capital
20%
Emap
15%
GWR
15%
SRH
8%
Other
17%
GMG
4%
Chrysalis
12%
TWG
5%
SMG
4%
Source: Ofcom Q1 2004
5.15 The r
T
has meant that branding and positioning of stations have become increasing cr
to the commercial radio industry in order to ensure that it can satisfy the needs of
advertisers.
f the commercial groups, CaO
p
relative size and demographic positioning.
ons (such
- 43 -

45.
The Communications Market 2004 – Radio
Figure 37 - Positioning of all national radio stations
1
egments which are less well served by the national commercial stations (figure 37).
5.16 An overview of the major radio players
BBC radio
The BBC has 5 UK-wide networks, 40 local radio stations in England and 6 stations
for the nations, all broadcasting on analogue frequencies. In addition it has 5 digital
only stations which are carried on DAB digital radio as well as cable, satellite and
Freeview. The BBC’s Local and Nations’ stations have guaranteed capacity on the
appropriate local commercial DAB digital radio multiplex. The remits for each BBC
service are shown in figure 38.
ch
1
egments which are less well served by the national commercial stations (figure 37).
5.16 An overview of the major radio players
BBC radio
The BBC has 5 UK-wide networks, 40 local radio stations in England and 6 stations
for the nations, all broadcasting on analogue frequencies. In addition it has 5 digital
only stations which are carried on DAB digital radio as well as cable, satellite and
Freeview. The BBC’s Local and Nations’ stations have guaranteed capacity on the
appropriate local commercial DAB digital radio multiplex. The remits for each BBC
service are shown in figure 38.
Radio 1
Radio 2
Radio 3
Radio 4
Radio 5
6 Music
1Xtra
BBC7
Capital
Disney
Capital Gold
The Arrow
Classic Gold
Core
Galaxy
heat
Heart
The Hits
Jazz
Kerrang!
Kiss
LBC
Magic
Easy Radio
Mojo
oneword
Planet Rock
Q
Primetime
Smash Hits
The Storm
Sunrise
talkSPORT
Virgin
Xfm
Yaar Radio
Classic FM
Increasing
Proportion
of 15-44
Increasing
proportion
of ABC1s
Commercial digital
BBC
Analogue
Source: RAJAR Q1 2004/RAB
Note: Due to the relatively small audiences of some of the national stations their position from quarter to
quarter may change significantly
With the exception of Classic FM, the most widely available commercial FM services
are targeted at younger audiences, while those aiming for older audiences are mu
more limited in their availability.
The majority of national radio stations in the UK target the younger, less ABC1
market segments. The BBC stations tend to focus more on older more ABC
ely available commercial FM services
are targeted at younger audiences, while those aiming for older audiences are mu
more limited in their availability.
The majority of national radio stations in the UK target the younger, less ABC1
market segments. The BBC stations tend to focus more on older more ABC
ch
ss
- 44 -

46.
The Communications Market 2004 – Radio
Figure 38: Remit and spending of the BBC radio stations
Station
Spending
2003-04
Remit18
BBC Radio 1 £17.6m BBC Radio 1 aims to offer an exciting, high-quality serv
a young UK audien
ice for
ce. It is committed to playing the best new
music and delivering a comprehensive range of live studio
sessions, concerts and festival broadcasts. The network aims
to cover all young music genres with a wide-ranging playlist
and a strong line-up of specialist DJs. Music programming is
augmented by tailored speech output – including news,
documentaries and advice campaigns.
BBC Radio 2 £21.7m BBC Radio 2 aims to bring a broad range of popular and
specialist music, with particular support for new and
established British artists; live music, through concerts and
studio sessions; and song-writing. The network also offers
news, current affairs, documentaries, comedy, readings,
religious output and social action, designed to appeal to a
broad audience.
BBC Radio 3 £32.1m BBC Radio 3 aims to provide a broad spectrum of classical
music, jazz, world music, drama and arts discussions. It
focuses on presenting live and specially recorded music from
across the UK and beyond, including contributions from the
BBC’s own performing groups.
BBC Radio 4 £69.9m BBC Radio 4’s remit is to use the power of the spoken word to
offer programmes of depth which are surprising, searching,
revelatory and entertaining. The network aims to offer in-depth
and thoughtful news and current affairs and seeks to engage
and inspire its audience with a rich mix of factual programmes,
dy.drama, readings and come
BBC Radio £51.5m BBC Radio Five Live broadcasts live news and sport 24 hours
a day, aiming to present events as they happen in a modern,
dynamic and accessible style. It sets out to cover national and
depth, using wide-ranging analysis
tertain and involve news and sports
lds.
e,
ons and
portfolio of sports rights.
Five Live
international subjects in
and debate to inform, en
fans of all ages, with particular emphasis on 25–44 year o
The network also provides extensive live events coverag
supported by the BBC’s global newsgathering operati
BBC Five £1.7m BBC Five Live Sports Extra is a part-time extension of BBC
ice of action
from
lready owned by the BBC by offering alternative
commentaries to those provided on Five Live.
Live Sports
Extra
Radio Five Live, aimed at bringing a greater cho
to sports fans. It extracts more value for licence payers
sports rights a
1Xtra £5.1m 1Xtra aims to play the best of contemporary black music
a strong emphasis on delivering high-quality live mus
supporting new British artists. 1Xtra also brings listeners a
bespoke news service, regular discussion programmes a
specially commissioned
, with
ic and
nd
documentaries, plus information and
advice relevant to the young target audience, particularly –
rities.although not exclusively – those from ethnic mino
BBC Annual report and accounts 2003/0418
- 45 -

47.
The Communications Market 2004 – Radio
Station
Spending
2003-04
Remit19
BBC 6 Music £4.1m BBC 6 Music offers lovers of popular music current releases
outside the mainstream, new concert and session tracks, and
unique access to the work of artists from the last 40 years
through the BBC Sound Archive. It aims to provide a social
music news, documentaries and
providing interactive content.
and cultural context through
debate, and is committed to
BBC 7 £4.3m BBC 7 is a speech-based service providing pure
ain to attract ch radio. The
network offers comedy, drama and readings, mainly from the
. It also aims to be the home of children’s speech
radio, with daily live programming for youngsters.
entert ment a new audience to spee
BBC archive
BBC Asia
Network
BBC Asian Network offers music, n
entertainment and drama for British
primarily in English but
by UK Asian
n £4.1m ews, sport, debate,
Asians. It broadcasts
also in a range of languages spoken
s. It aims to be the main forum for debating issues
concerning British Asian communities.
Na
Regional and
Local Radio
£133.4 Stations aim to reflect their local area or nation, broa
a range of output fo
tional dcasting
cused on speech
Source: BBC
Figure 39: Audience profile of BBC radio stations20
BBC
Radio 2
Radio 4
Radio Five Live
Radio 7
oportionof
C1
BBC Asian
Network UK
Radio 1
Radio Five Live
Sports Extra1Xtra
reasingpr
AB
Radio 3
Inc
Radio 6 Music
Increasingly female
19
BBC Annual report and accounts 2003/04
20
Note: In each of the profile charts the size of the circles indicate the relative number of adult
listening hours
- 46 -

48.
The Communications Market 2004 – Radio
BBC
BBC Asian
Network UK
Radio 2
Radio 3 Radio 4
1Xtra
Inc
Radio 1
creasingly female
Radio Five Live
Radio Five Live
Sports Extra
Radio 6 Music
Radio 7
In
reasingproporti
35+
onof
Source: Ofcom / RAJAR Q1 2004
e wor
Asian Network and Radio 4 h
(figure 39). On the whole the
Listening to th BBC Net k stations is more prevalent among men with only the
aving a noticeably higher proportion of female listeners
BBC Network stations tend to attract older listeners.
Figure 40: The BBC’s local radio and nations’ radio services
Source: BBC/Ofcom
- 47 -

49.
The Communications Market 2004 – Radio
Capital Radio Group
wns 22 t d has few interests outside radio. It has been
t ldin
ta entur
2003 it gained control of Cho
stake).
Capital also operates a numb
E Digit as ma
station, joint
In January 2004 in response
between GWR and Capital R
t wa disc
Figure 41: Map of Capital R
Capital o analogue s
ui
ations an
pursuing a stra
including Capi
egy of b
l FM, C
g brands targeted at different segments of the audience
y in the North and Midlands and Xfm. In November
ice FM in London (having previously owned a minority
er of digital radio multiplexes, some in partnership with
alEmap (C
Disney
al). It h
a digital
de a move into children’s radio through the Capit
venture with Disney.
to press speculation regarding “formal discussions
adio”, GWR issued a formal notice to the stock market
stating that i s not in ussions with Capital.
adio Group analogue radio stations
Source: Ofcom
* Note: Beat is marketed as part of the Capital FM Network. However, unlike the other stations in the
brand it has a specialist youth oriented format
- 48 -

50.
The Communications Market 2004 – Radio
Figure 42: Positioning of Capital Radio Group’s radio brands
Capital
Xfm
Choice
Capital FM
Network
Capital Gold
NetworkCapital Disney
Century
Network
Increasingly female
Increasingproportion
ofABC1
Capital
Capital FM
Network
Choice
Network
Capital Disney
Century
Network
Xfm
Increasingly female
Increasingproport
of35+
Capital Gold
ion
Source: Ofcom / RAJAR Q1 2004
Capital see their brands as a key to their business, “To drive the value of our
business and to position Capital Radio for growth, we recognise the need for a
complementary portfolio of radio stations in our broadcasting areas” 21
.
Their stated strategy for long-term future growth includes investing in brands and
expanding them onto new platforms, exploiting new technologies and pursuing
strategic acquisitions.
21
Capital Radio plc Annual report 2003
- 49 -

51.
The Communications Market 2004 – Radio
Chrysalis Radio
Originally a music publishing and recording company, Chrysalis is a relative
newcomer to the radio industry.
It owns 8 analogue stations, with three brands (Heart, Galaxy and LBC), all of which
re large scale. In June 2004 it sold its stake in the Telford FM stations to the
sition of most listened to
Digital Radio
licences and the digital only station The Arrow
Figure 43: Map of Chrysalis Radio analogue radio stations
a
Midlands News agency.
The company is growing share organically and has been successful in doing so -
eart in London is vying with Capital FM for the poH
commercial station in London - and the recently acquired and revamped22
LBC
stations are also growing audiences. The company has said that, following the sale
of its TV business, it will be in a strong position to look for acquisitions in the UK
adio sector.R
Chrysalis also has a 39% stake in MXR, which holds several regional
Source: Ofcom
22
LBC was acquired in September 2002 for £23.5m and was relaunched on 6 January 2003
- 50 -

52.
The Communications Market 2004 – Radio
Figure 44: Positioning of Chrysalis Radio’s radio brands
Chrysalis
Galaxy Network
Heart Network
LBC Network
Increasingly female
Increasingproportionof
ABC1
Chrysalis
Galaxy Network
LBC Network
Heart Network
Increasingly female
Increasingproportionof
35+
Source: Ofcom / RAJAR Q1 2004
Chrysalis emphasises the importance of managing and extending their portfol
brands in their annual report.
io of
- 51 -

53.
The Communications Market 2004 – Radio
Emap
Emap Performance manages the Emap group’s music brands covering radio
magazines, digital television and branded products and events. Within this, E
says that radio remains its core bu
, music
map
siness. Emap also has major interests in
dio stations including Magic, Kiss and the Big City network
dio
radio
ne
d magazine brands into analogue radio for the first time. The station
ocal multiplexes, either in its own
ght or in partnership with Capital or The Wireless Group.
Figure 45: Map of Emap’s analogue radio stations
magazine publishing, both consumer and B2B and has significant media interests in
France.
he group owns 18 UK raT
(comprising the large traditional commercial FM stations) in the North of England,
where it is the market leader. The company is also building its magazine linked ra
stations and its other radio brands on a quasi-national basis on digital radio and
via TV.
It recently won the third West Midlands regional licence for Kerrang!, extending o
of its digital an
launched in June 2004.
Emap also operates a number of Digital Radio l
ri
Source: Ofcom
- 52 -

54.
The Communications Market 2004 – Radio
Figure 46: Positioning of Emap’s radio brands
ultiple platforms, for example Mojo, Q and Heat, all established Emap magazine
rands, launched as radio stations during 2003 and joined Kerrang! and Smash Hits
which were magazine brands launched as radio stations in the previous year
The Hits radio station was a brand extension from television and was launched as a
sister station to the eponymous music television station
Emap
Kiss
Big City
Network
Q
Magic Network
Kerrang!
Mojo
Smash Hits
The Hits
Increasingly female
Increasingproportionof
35+
Emap
The Hits
Big City
Network
Kiss
Q
Magic Network
Kerrang!
Mojo
Smash Hits
Increasingly female
Increasingproportionof
ABC1
Source: Ofcom / RAJAR
Emap Performance has extended a number of Emap’s magazine brands across
m
b
- 53 -

55.
The Communications Market 2004 – Radio
GMG Radio (Guardian Media Group)
t. Its
he company owns five stations and operates three brands – Jazz FM (which it
zz
o holds an 18% stake in MXR which holds several regional Digital Radio
cences.
The Guardian Media Group (GMG) has acquired a number of radio stations in the
past couple of years and is now the sixth largest player in the UK radio marke
management has stated that it is looking for further radio acquisitions.
T
acquired in 2002), Real Radio (Adult mainstream and chat, targeted at a 35-44 year-
old audience) and the recently renamed Smooth FM in the North West (formerly Ja
FM).
GMG als
li
The Group’s status as a trust means that it cannot itself be the target of an
acquisition.
Figure 47: Map of GMG’s analogue radio stations
Source: Ofcom
- 54 -

56.
The Communications Market 2004 – Radio
GWR Group
cal stations plus the only national
FM commercial radio licence, Classic FM. During 2003 it disposed of its international
radio interests.
The local stations operate in medium and small towns across the East of England,
the Midlands, the South West and North Wales. The company has no stations in the
large metropolitan areas (although it did formerly own LBC), which means that it has
generally faced less competition than some of the other major groups.
Around a fifth of the GWR’s revenue is derived from Classic FM, with the majority of
the rest from other UK Radio stations23
. The group sold its AM “Classic Gold”
“network” to UBC, but retains a stake in its former network.
GWR also owns Digital One the UK National Digital Radio multiplex holder and has
been awarded a number of local multiplex licences.
Figure 48: Map of GWR’s analogue radio stations
GWR has grown by acquisition and now owns 34 lo
Source: Ofcom
23
Classic FM provided 21.9% of GWR group revenues in 2003/04 and the Local Radio Group
provided 69.3%, Source: GWR Group Plc Annual Report 2004
- 55 -

57.
The Communications Market 2004 – Radio
The Daily Mail and General Trust (DMGT) which owns 29.9% of GWR, won two radio
cences in Australia in the first quarter of 2004. The group bid $106 million (c.£43.8
969 which
that it was not in discussions with Capital.
: Positioning of GWR’s radio brands
li
million) for a new commercial FM radio licence to serve Sydney at an Australian
Broadcasting Authority auction. The group also obtained a new commercial FM radio
licence to serve Brisbane for $80 million. The new stations are likely to launch in
004 using the infrastructure of DMGT's existing Sydney station, Nova2
was launched in April 2001.
In January 2004 in response to press speculation regarding “formal discussions
between GWR and Capital Radio”, GWR issued a formal notice to the stock market
tatings
Figure 49
GWR
Classic FM
Planet Rock
Storm
The Mix
Network
Core
Increasingly female
Increasingproporti
ABC1
onof
GWR
The Mix
Network
Core
Classic FM
Storm
Planet Rock
Increasingly female
Increasingproportionof
35+
ource: OfcomS / RAJAR
he Classic FM brand has been extended across a number of different media with
ere now being Classic FM TV, Classic FM branded CDs and a DVD, books,
sponsored concerts and a Classic FM branded DAB digital radio set.
T
th
- 56 -

58.
The Communications Market 2004 – Radio
Saga Radio
In 2001, after a number of attempts at bidding for analogue licences, Saga Radio
launched the second regional licence for the West Midlands. This was followed by a
aunch in the Eal st Midlands in 2003. The third Saga station will launch in Glasgow
igure 50: Map of Saga’s analogue radio stations
later in 2004.
Saga stations are also available on a number of DAB digital radio multiplexes
including London and Glasgow.
The company also operates the Primetime national DAB digital radio station on
Digital One, targeting “50-something” audiences.
F
Source: Ofcom
- 57 -

59.
The Communications Market 2004 – Radio
Scottish Radio Holdings
Scottish Radio Holdings (SRH) owns 20 analogue stations, including the market
leaders in each of the major Scottish cities. In recent years the company has
expanded south of the border, with the Vibe Dance brand in the East of England and
around the Severn Estuary and Wave 105 around the Solent and into Northern
Ireland, with the acquisition of Downtown Radio.
In January 2004 Emap acquired 29.9% of the company.
Figure 51: Map of SRH’s analogue radio stations
Source: Ofcom
- 58 -

60.
The Communications Market 2004 – Radio
Scottish Media Group
Rock (which replaced Liquid) and The Groove which
Scottish Media Group’s (SMG’S) main interest lies in the ITV licences for Scotland
(Scottish TV and Grampian TV) as well an outdoor and cinema advertising.
However it also owns Virgin Radio which has a national AM licence and a FM licence
in London and Virgin Classic
are digital only stations.
Figure 52: Map of SMG’s analogue radio stations
Source: Ofcom
- 59 -

61.
The Communications Market 2004 – Radio
The Wireless Group
The Wireless Group (TWG) is 20% owned by News Corporation.
Following its launch the group disposed of some of its radio stations, including the
Solent region’s “Wave” to SRH and “Scot FM” (now Real Radio) to GMG.
In January 2004 The Wireless Group acquired Forever Broadcasting. Forever
Bury), The Wolf
olverhampton) and Peak FM (Chesterfield).
ding the national talkSPORT
station on AM.
Figure 53: Map of TWG’s analogue radio stations
controls three analogue radio licences: Tower FM (Bolton &
(W
The company now controls 16 analogue licences inclu
Source: Ofcom
- 60 -

62.
The Communications Market 2004 – Radio
UBC - Classic Gold
In September 2000, GWR sold 12 of its 17 Classic Gold stations to Classic Gold
Digital Ltd, a company owned 80% by UBC Media Group plc - GWR retains the other
0%. UBC paid GWR just over £2m for the stations with 5 million shares also going
rtime for the network through its OPUS sales-house.
BC is also part shareholder in Oneword, the national digital broadcaster. UBC
on of digital and analogue
n and the provision of audio
and data services to the radio, internet and telecommunications industries.
Figure 54: Map of UBC’s analogue radio stations
2
to GWR. GWR sold the stations on the agreement that they can buy back 55% of
the new company anywhere between five and eight years after the deal was done.
GWR continues to sell ai
U
Media’ principal business is the ownership and operati
commercial radio stations, radio programme productio
Source: Ofcom
- 61 -

63.
The Communications Market 2004 – Radio
Local Radio Company
ments Limited from
s three shareholders. To fund the deal the Local Radio Company floated on AIM.
orkshire
nd along the south coast with one in Scotland.
In May 2004, the Local Radio Company bought all of Radio Invest
it
The Local Radio Company owns 22 small local stations, concentrated in Y
a
Figure 55: Map of the Local Radio Company’s analogue radio stations
ource: OfcomS
- 62 -

64.
The Communications Market 2004 – Radio
Other groups
There are a number of other groups operating commercial radio stations across the
UK. The stations owned by individual groups tend to be based in the same broad
geographical area.
Some of these groups have other interests in addition to radio particularly in local
ewspapers e.g. the Kent Messenger Group, CN Group and Tindle have localn
newspaper interests, Milestone group has television and publishing interests. Oth
are primarily radio groups e.g. Lincs FM or UKRD.
Figure 56: Other UK radio groups
ers
Source: Ofcom
- 63 -

65.
The Communications Market 2004 – Radio
6. The citizen-consumer – listening
rease
. Over
the last 5 years (Q2 1999 to Q2 2004) total listening has grown by 7% (figure 57).
Figure 57: Total listening hours
Source: RAJAR
Over two thirds of all radio listening occurs in the home (figure 58) with the majority of
that listening being at breakfast, highlighting the importance of the breakfast shows to
the financial performance of radio stations. The proportions of where people listen to
radio have stayed broadly constant since 1999 when the current RAJAR series
began.
Figure 58: Where people listen to radio
Source: RAJA
continues to increase
6.1 Total radio listening is on the inc
There has been an overall upward trend in total radio listening in recent years
1072
10471053
1088
1030
1000
920
940
960
980
1000
1020
1040
1060
1080
1100
1120
Q2
'99
Q3
'99
Q4
'99
Q1
'00
Q2
'00
Q3
'00
Q4
'00
Q1
'01
Q2
'01
Q3
'01
Q4
'01
Q1
'02
Q2
'02
Q3
'02
Q4
'02
Q1
'03
Q2
'03
Q3
'03
Q4
'03
Q1
'04
Q2
'04
Hours ('000s)
1072
10471053
1088
1030
1000
920
940
960
980
1000
1020
1040
1060
1080
1100
1120
Q2
'99
Q3
'99
Q4
'99
Q1
'00
Q2
'00
Q3
'00
Q4
'00
Q1
'01
Q2
'01
Q3
'01
Q4
'01
Q1
'02
Q2
'02
Q3
'02
Q4
'02
Q1
'03
Q2
'03
Q3
'03
Q4
'03
Q1
'04
Q2
'04
Hours ('000s)
R Q1 2004
Work
13%
Home
69%
Car
16%
Elsewhere
2%
- 64 -

66.
The Communications Market 2004 – Radio
The BBC networks take the largest share of breakfast listening, but by mid-morning,
ry
for example on average the audience in the evening is 30% of
e size of the breakfast show audience, for Virgin it is 38% for talkSPORT it is 45%
hat
audience
Source: RAJAR Q1 2004
On average radio listeners listen to 22.9 hours of radio per week (adults listen to 24.7
hours25
), although average listening fluctuates the trend has been upwards with
listening having increased 5 per cent from 21.9 hours since June 2000.
Children listen to the least radio with an average of 11.9 hours per week with
ase as people get older, particularly with people over the age
of 44. On average, men’s weekly radio listening is higher than women’s and C2DE’s
higher than ABC1s (figure 60).
Adult listening per household has increased over the last 5 years, between 1999 and
2003 adult radio listening by household increased from 41.2 hours per household per
week to 43.5 hours, a 6% increase.
local commercial stations match the BBC’s networks’ audiences. While listening
generally declines during the day, the relative audience size by time of day does va
by station (figure 59)
th
and for Classic FM it is 60%24
. In comparison for BBC local and regional stations t
proportion is 23%.
igure 59: When people listen - weekly averageF
listening tending to incre
24
Source: RAJAR Q1 2004
25
Note: These figures are for Q1 2004, the average adult listening figure from RAJAR was
24.4 hours in Q2 2004
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Breakfast
Peak
Mid Morning Afternoon PM Drive Evening Overnight
'000s of listeners
All BBC Network Radio BBC Local/Regional
All National Commercial All Local Commercial
- 65 -

67.
The Communications Market 2004 – Radio
Figure 60: Average weekly listening by demographic
Source: RAJAR Q1 2004
Average weekly listening is highest for the BBC (figure 61), with BBC network radio
getting the most listening at 16 hours, within which Radio 2 and Radio 4 get the most
listening with 12.9 and 12.8 hours respectively. BBC local and regional radio
listening is boosted by older listeners (55+) who listen to those stations on average
for 14.9 hours per week, significantly higher than the listening in other age brackets.
Figure 61: Average weekly listening over time
Source: RAJAR, all adults (aged 15+)
48% of all radio listening is by men, with 45% by women and 7% by children26
. Men
also form the majority of the BBC’s listeners – 51%. The BBC is listened to less by
children than the commercial sector; children only listen to 3% of all BBC hours
compared to 11% of all commercial hours (figure 62).
26
This compares to split of 41% men, 44% women, and 15% children in the RAJAR
population
21.6 22.5
23.5
26.6
11.
23.023.326.2
0
5
10
15
20
25
30
Children 15-24 25-34 35-44 45-54 55-64 65+ Adult
Men
Adult
Women
Children ABC1
Adults
C2DE
Adults
Hours
26.926.4 27.5
11.99
Average listening 22.9 hours
17.0 17.3
17.0 17.4
17.6
15.5
15.2 15.415.4 15.4
.8
23.9
15.3
15.8
15.8
15.2
14.9 15.4
15.3
14.7 14.3
14.4
8.3
7.67.77.87.77.6
23.6 24.6
24.0 24.4
10.1
11.8 11.8 11.6 11.7 11.5
5
7
9
11
13
15
17
19
21
23
25
Q2
'99
Q3
'99
Q4
'99
Q1
'00
Q2
'00
Q3
'00
Q4
'00
Q1
'01
Q2
'01
Q3
'01
Q4
'01
Q1
'02
Q2
'02
Q3
'02
Q4
'02
Q1
'03
Q2
'03
Q3
'03
Q4
'03
Q1
'04
Q2
'04
Averag weekly hourse
14
All BBC All BBC Network Radio All Commercial All Local Commercial
All National Commercial All Radio BBC Local/Regional
17.0 17.3
17.0 17.4
17.6
15.5
15.2 15.415.4 15.4
.8
23.9
15.3
15.8
15.8
15.2
14.9 15.4
15.3
14.7 14.3
14.4
8.3
7.67.77.87.77.6
23.6 24.6
24.0 24.4
10.1
11.8 11.8 11.6 11.7 11.5
5
7
9
11
13
15
17
19
21
23
25
Q2
'99
Q3
'99
Q4
'99
Q1
'00
Q2
'00
Q3
'00
Q4
'00
Q1
'01
Q2
'01
Q3
'01
Q4
'01
Q1
'02
Q2
'02
Q3
'02
Q4
'02
Q1
'03
Q2
'03
Q3
'03
Q4
'03
Q1
'04
Q2
'04
Averag weekly hourse
14
All BBC All BBC Network Radio All Commercial All Local Commercial
All National Commercial All Radio BBC Local/Regional
- 66 -

68.
The Communications Market 2004 – Radio
Figure 62: Split of listening hours by gender
Children
7%
Adult Men
48%
Adult
Women
45%
Children
3%
Adult Men
51%
Adult
Women
46%
Children
11%
Adult
Women
44%
Adult Men
45%
Total BBC Commercial
Source: RAJAR Q1 2004
Across the different age groups, over 65s listen to the most radio accounting for 19%
of all hours, under 15s with 7% listen to radio the least27
. Older listeners are
particularly attracted to the BBC with almost half (47%) of all BBC hours listened to
by over 55s. In contrast commercial radio attracts younger listeners with almost half
(45%) of all commercial listening being done by those under the age of 35, compared
to 22% of all BBC hours (figure 63).
Figure 63: Split of listening hours by age
Children
7%
15-24
13%
25-34
13%
35-44
17%
45-54
16%
55-64
15%
65+
19%
15-24
8%
25-34
11%
35-44
15%
45-54
16%
55-64
19%
65+
28%
Children
3%
Children
11%
15-24
18%
25-34
16%
35-44
19%
45-54
15%
55-64
11%
65+
10%
Total BBC Commercial
Source: RAJAR Q1 2004
Listening is split evenly across socio-economic classifications28
(figure 64). The BBC
attracts a larger proportion of ABC1 listeners, while commercial radio attracts a
higher proportion of C2DEs.
In the RAJAR population there are 17% over 65s, 12% are 55 to 64, 13% are 45 to 54, 16%
are 35 to 44, 14% are 25 to 34, 13% are 15 to 24 and 15% are under 15s,
re 51% ADC1 Adults and 49% C2DE Adults
27
28
In the adult RAJAR population there a
- 67 -