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'UK Commercial Radio: A Personal Perspective: January 2008' by Grant Goddard
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'UK Commercial Radio: A Personal Perspective: January 2008' by Grant Goddard

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Presentation outlining the business, economic, regulatory and technological issues facing the UK commercial radio sector, written by Grant Goddard in January 2008 for RadioCentre Members' Conference.

Presentation outlining the business, economic, regulatory and technological issues facing the UK commercial radio sector, written by Grant Goddard in January 2008 for RadioCentre Members' Conference.

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  • 1. UK COMMERCIAL RADIO: A PERSONAL PERSPECTIVE Grant Goddard radio specialist www.grantgoddard.co.uk 29 January 2008
  • 2. Grant Goddard Commercial radio in 2007 – looking back radio specialist Ownership changes  Chrysalis Radio and EMAP Radio sold  Bid offer for GCap Media New management  New CEOs at GCap Media and Chrysalis Radio  New management team at Virgin Radio New entrants  Global Radio and H Bauer  Channel 4 awarded new digital multiplex Deregulation  Ofcom to relax format regulation  More networking and station co-location UK Commercial Radio Sector: A Personal Perspective © Grant Goddard: January 2008 2
  • 3. Grant Goddard Commercial radio in 2008 – looking forward radio specialist Transmission costs  Competition Commission inquiry into Arqiva/NGW ends March 2008  Transmission contract renegotiations on horizon Music copyright costs  Current PPL agreement ends April 2008 DAB and digital radio platforms  Channel 4 DAB multiplex launches mid-2008  DCMS Digital Radio Working Party concludes end-2008 Less regulation  Less restrictive ‘formats’ offer opportunities for innovation  More collaborations (for example, Kiss and Galaxy joint programming) UK Commercial Radio Sector: A Personal Perspective © Grant Goddard: January 2008 3
  • 4. Grant Goddard Total radio listening - forecast radio specialist ALL RADIO - REACH (% ) ALL RADIO LISTENING (average hrs/wk/listener) 95 90.4 90.8 90.4 90.7 90.0 90.1 89.7 89.7 89.6 89.5 89.4 89.3 89.1 90 89.3 29 27 25 23.1 23.8 23 24.4 24.1 24.3 24.4 24.0 23.7 23.3 23.0 22.6 22.3 22.0 21.6 21 85 19 17 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 [Source: RAJAR/Grant Goddard] 1999 15 80 [Source: RAJAR/Grant Goddard]  Radio’s future is positive as it continues to be a ‘mass medium’, reaching around 90% of the adult population  Time spent listening to radio is expected to decline slightly, in the face of competition from an influx of media and entertainment sources UK Commercial Radio Sector: A Personal Perspective © Grant Goddard: January 2008 4
  • 5. Grant Goddard Commercial radio’s share of listening - forecast radio specialist COMMERCIAL RADIO SHARE OF LISTENING (% ) 50 47.8 47.0 45.9 45.5 45.2 45 44.6 43.5 43.1 42.9 42.6 42.3 42.0 41.7 41.4 40 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 35 [Source: RAJAR/Grant Goddard]  Grant Goddard’s forecast predicts a possible decline in commercial radio’s share of listening (versus the BBC)  There is still no specific commercial radio product to appeal to the growing 50+ demographic  While the number of commercial radio stations has increased, these new services have cannibalised their commercial competitors, rather than competed directly for BBC audiences  Commercial radio formats often converge towards the middle ground, rather than offering unique content UK Commercial Radio Sector: A Personal Perspective © Grant Goddard: January 2008 5
  • 6. Grant Goddard Commercial radio revenues - forecast radio specialist COMMERCIAL RADIO REVENUES (£m 2006 prices) 800 691.7 700 600 627.6 632.6 660.0 680.1 632.9 581.7 556.2 558.7 500 539.2 523.9 506.2 489.2 472.6 400 300 200 100 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 0 [Source: RAJAR/Radio Advertising Bureau/Grant Goddard]  Our commercial radio revenue forecast predicts continuing year-on-year declines of 2% to 3% per annum in real terms  Commercial radio companies have yet to implement successful strategies to combat audience defection to BBC radio  Increased supply of commercial radio services (such as the launch of the Channel 4 digital radio multiplex in 2008) will not, by itself, increase consumer demand for commercial radio  Commercial radio has been closing more services than it has been opening (GCap – The Storm, Capital Disney, Core, Life; EMAP – 3C; SMG – Virgin Groove; independent – PrimeTime, OneWord) UK Commercial Radio Sector: A Personal Perspective © Grant Goddard: January 2008 6
  • 7. Grant Goddard Transmission costs radio specialist Commercial radio expenditure on transmission  £50-60m per annum in total  Analogue costs approx. £24m per annum  DAB costs approx. £26m per annum Renewal of transmission contracts Do opportunities exist for commercial radio to reduce its transmission costs? UK Commercial Radio Sector: A Personal Perspective © Grant Goddard: January 2008 7
  • 8. Grant Goddard Music copyright costs radio specialist Commercial radio’s relationship with music  Commercial radio pays £60m per annum for music copyright  Agreements with PPL and Alliance date back to 1991  The value of music to the consumer has changed immensely since then  Radio is no longer consumers’ main source of music innovation/exposure  Commercial radio continues to add value to music  Commercial radio remains an important source of consumer exposure for new music  Radio is exploring new ways of bringing music to its audience (podcasts, online, listen again) Renewal of music copyright agreements should reflect changing role of music UK Commercial Radio Sector: A Personal Perspective © Grant Goddard: January 2008 8
  • 9. Grant Goddard DAB and digital radio platforms radio specialist The future of digital radio  DCMS Working Party will report by year-end  New Channel 4 multiplex will launch mid-2008  Some radio groups scaling down commitment to digital  Monetisation of digital platform remains a huge industry issue UK Commercial Radio Sector: A Personal Perspective © Grant Goddard: January 2008 9