Analysis of attempts by the UK DAB digital radio industry to discredit its sales data showing declining DAB radio receiver sales, written by Grant Goddard in April 2011 for Grant Goddard: Radio Blog.

1. UK DIGITAL RADIO INDUSTRY
RUBBISHES ITS OWN DAB
RECEIVER SALES FIGURES
by
GRANT GODDARD
www.grantgoddard.co.uk
April 2011

2. When UK companies that had once anticipated they were poised to make a mint out of ‘DAB
radio’ realise that things are not going the way they had wanted, they lash out. That seems to
be what happened yesterday. ‘Shoot the messenger’ appeared to be the digital radio industry’s
reflex response when backed against a wall of facts that tell an unpalatable story.
At the Westminster Media Forum conference on digital radio, a graph of DAB/digital radio
receiver sales was displayed in a presentation by 'The Guardian' newspaper’s Jack Schofield
(see below):
The graph clearly showed that 2010 unit sales were down on 2009, and that 2009 unit sales
were down on 2008. This data was collected by GfK.
Anthony Sethill, founder and chief executive of Frontier Silicon, took exception to this graph’s
narrative of declining consumer interest in DAB radio receivers. He commented:
“My company supplies the chipsets that drive about 80% of digital radios on the
market today. So, I think the panel today, with the exception of Andrew [Harrison,
RadioCentre chief executive] is a wonderful example of how the minority seem to take
the stage and voice the negativity and things. And, if we were to re-run Jack’s
presentation again, put some facts in the correct order, and the correct facts, I think we
would have a very different read. You know, it’s very difficult, when you have people
like Jack that have a national platform in terms of a national newspaper, to voice these
views.
So we’ll start with the GfK data. Now, GfK is actually a retail audit and, over the years,
has been used by the consumer electronics and the retail trade in the UK to measure
the sales of consumer electronic devices. In the last few years, GfK has been dying.
The reason it has been dying is that it relies on the data – sales out data – from
national retailers such as Dixons and John Lewis and Tesco and so on. Last year,
Dixons pulled the plug on supplying data to GfK. That meant the largest retailer in the
UK, which accounts for 25% of all sales, actually stopped giving them data. To carry
on selling that data, [GfK] then had to formulate panels and most people in the
industry know that, statistically, it’s not valid and that, basically, it’s falling apart. Now,
you’ve quoted GfK [DAB/digital radio receiver] sales falling and I’ve given you the
reasons why that data is not accurate. […]
This is a practical example of discrediting the data, which a number of people use to
bash DAB. So this is one small example of how you’re misinterpreting and you’re
misleading people. I don’t know if you understand what GfK is, or what it has done, or
UK Digital Radio Industry Rubbishes Its Own DAB Receiver Sales Figures page 2
©2011 Grant Goddard

3. why it has fallen apart but, if you do, then that’s really poor. And if you don’t, before
you quote it, you should learn the facts.”
The graph to which Sethill was referring was created by me and published in this blog last
weekend (Jack Schofield had asked before the conference if he could use it in his
presentation). I had first published these DAB/digital radio receiver sales data in a blog in
January 2011, in which I wrote:
“1.94m digital radios were sold in 2010, compared to 1.99m in 2009 and 2.08m in
2008. Increase? No. Growth? No. Over 2m in 2010? No.”
In March 2011, these same sales figures were reprinted in The Telegraph newspaper, which
wrote that “new figures showed that sales of digital radio equipment actually fell last year.”
It should be noted:
 The sales data in my graph were distributed by Digital Radio UK, the radio industry
organisation marketing DAB radio in the UK
 Digital Radio UK purchases these data concerning DAB/digital radio receiver sales
from GfK
 Digital Radio UK has regularly quoted these GfK data in its press releases (most
recently on 23 Dec 2010 and 21 Dec 2010) and in its newsletters
 Digital Radio UK has never publicly challenged the validity of the GfK sales data
that it is distributing and using in its marketing campaigns
 Until now, these data on DAB/digital radio receiver sales have been widely
reported in the public domain without challenge from the wider digital radio sector.
So what is eating Frontier Silicon? It seemed wholly inappropriate for Anthony Sethill to beat
up panellist Jack Schofield in public for using the digital radio industry’s OWN DATA in his
presentation. If Frontier Silicon has an issue with the digital radio industry’s sales data, it
should take that up with Digital Radio UK, which purchased the data from GfK and distributed
them.
Perhaps the real issue is that the rewards from DAB radio have evidently still not materialised
for the digital radio industry. By year-end 2009, Frontier Silicon Limited had an accumulated
loss of £28m. In financial year 2009, it generated an operating loss of £536,000 on turnover of
£22m. Its shareholders include Digital One (owned by Arqiva) and Imagination Technologies
(which owns Pure Digital). Imagination owns 9.3% of Frontier Silicon, a stake that it wrote
down by £3.4m in 2008, and then finally wrote down by a further £3.6m in 2010. As
Imagination’s accounts explained:
“Due to the lower resulting valuation of the business and the impact of Frontier’s
capital structure, the Group’s investment [in Frontier Silicon] has been revalued to
£nil.”
I guess it must be tough for Frontier Silicon to see a shareholder value its business at “£nil.”
That is no reason for its unprovoked attack on Jack Schofield's presentation which had merely
used the industry's own data.
................
I contacted GfK for its response to the comments from Frontier Silicon. Its response was (in
full):
Date: 6th April 2011
GfK Retail and Technology UK response:
GfK Retail and Technology UK currently track over 100 individual technology product
categories and partner with major UK multiple retailers within every single audited
channel they report on, to complement this research and to ensure GfK cover the
UK Digital Radio Industry Rubbishes Its Own DAB Receiver Sales Figures page 3
©2011 Grant Goddard

4. UK Digital Radio Industry Rubbishes Its Own DAB Receiver Sales Figures page 4
©2011 Grant Goddard
overall market they also have a representative sample of independent retailers
working with them. This means GfK are receiving weekly data from over 24,000
individual stores within the UK. The majority of these retailers deliver weekly EPOS
data on their complete sales and this allows GfK to report to a detailed level on the
performance of all the leading technology categories. If faced with a retailer who is not
willing to participate GfK employ a widely used global research methodology to ensure
they are representing the overall market.
When challenged on the GfK reported performance of the DAB market Commercial
Director Anthony Norman commented “the overall technology markets have all come
under increasing pressure in the last 12 months, the austerity measures announced
and now being implemented by the coalition government have had a major impact on
consumer confidence which has in turn impacted on retail sales of technology areas”.
Norman continued in specific reference to the DAB market “the reported data by GfK is
based on over 70% live reported sales by retailers, rather than focussing on the
downturn of this market it would be more beneficial to put the whole picture in
perspective. The overall technology market has experienced only 4 months of growth
in the last 33 months. The average decline in this area is 6%, for DAB the market in
2010 declined by only 2%. Given the overall sector performance this is something that
should be recognised. As a business GfK are committed to delivering actionable
insight to the industries they operate within”
The GfK Group
The GfK Group offers the fundamental knowledge that industry, retailers, services
companies and the media need to make market decisions. It offers a comprehensive
range of information and consultancy services in the three business sectors of Custom
Research, Retail and Technology and Media. The no. 4 market research organization
worldwide operates in more than 100 countries and employs over 10,000 staff. In
2009, the GfK Group’s sales amounted to EUR 1.16 billion. For further information visit
www.gfkrt.com or www.gfkrt.com/uk
[The above updated graph shows subsequently revised data for 2009 and 2010 by GfK that
merely accelerate the slowdown in sales volumes]
[First published by Grant Goddard: Radio Blog as 'UK Radio Sector Rubbishes Its Own Digital Radio Receiver Sales
Figures', 6 April 2011.]
Grant Goddard is a media analyst / radio specialist / radio consultant with thirty years of
experience in the broadcasting industry, having held senior management and consultancy
roles within the commercial media sector in the United Kingdom, Europe and Asia. Details at
http://www.grantgoddard.co.uk