1.
UK COMMERCIAL RADIO
SECTOR: CURRENT
INDICATORS & FORECASTS
Grant Goddard
radio specialist
www.grantgoddard.co.uk
December 2007

2.
Grant Goddard
Agenda
radio specialist
 CURRENT INDICATORS

UK commercial radio revenues

UK commercial radio profitability

UK local commercial revenue yields

UK commercial radio listening

BBC radio listening

Digital radio listening
 FORECASTS

Assumptions

UK radio listening forecasts

UK commercial radio listening forecasts

UK commercial radio revenues forecasts
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
2

3.
Grant Goddard
radio specialist
 CURRENT INDICATORS
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
3

4.
Grant Goddard
UK commercial radio revenues
radio specialist
COMMERCIAL RADIO REVENUES (£m 2006 prices)
700
Branded Content
600
National Advertisers
Local Advertisers
500
400
300
200
100
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
0
[source: Radio Advertising Bureau]
2005 revenues
2006 revenues
Q1 2007 revenues
Q2 2007 revenues
Q3 2007 revenues
down 4% year-on-year
down 5% year-on-year
down 2% year-on-year
up 1% year-on-year
up 5% year-on-year
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
down 7% year-on-year (constant prices)
down 8% year-on-year (constant prices)
4

5.
Grant Goddard
UK commercial radio revenues
radio specialist
NUMBER OF LOCAL COMMERCIAL RADIO STATIONS
350
COMMERCIAL RADIO REVENUES (£m 2006 prices)
700
[source: Ofcom]
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
1978
1976
1974
2007
2005
2003
2001
1999
0
1997
0
1995
100
1993
50
1991
200
1989
100
1987
300
1985
150
1983
400
1981
200
1979
500
1977
250
1975
600
1973
300
[source: Radio Advertising Bureau]
The 1990s were a period of commercial radio growth because of a fortuitous combination of:
 Unprecedented expansion of the number of local commercial radio stations during the 1990s
 Launch of the Radio Advertising Bureau in 1992
 Launch of the UK’s first national commercial radio stations in 1992, 1993 and 1995
 Early consolidation in the industry reduced the number of commercial buying points
 The self-destruction of market leader BBC Radio One in 1993
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
5

6.
Grant Goddard
UK commercial radio revenues
radio specialist
AVERAGE REVENUES PER COMMERCIAL RADIO
STATION (£m 2006 prices)
10
AVERAGE REVENUES PER COMMERCIAL RADIO
STATION (£m 2006 prices)
2.0
9
8
1.5
7
6
5
1.0
4
3
0.5
2
National Advertisers
1
Local Advertisers
0
[source: Radio Advertising Bureau/Ofcom/Grant Goddard]
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
1978
1976
1974
0.0
[source: Radio Advertising Bureau/Ofcom/Grant Goddard]
 Average revenues per radio station have remained relatively constant since the 1990s
 Local stations have increasingly concentrated on national advertisers, to the neglect of local advertisers
 National advertisers have proven more susceptible to cyclical trends and fads (ie: the internet)
 Industry revenues from national advertisers are now more than twice the revenues from local advertisers
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
6

7.
Grant Goddard
UK commercial radio profitability
60
radio specialist
PROFITABILITY OF LOCAL COMMERCIAL RADIO
STATIONS LAUNCHED 1996-2002 (% of stations)
50
40
30
20
10
0
Broke even Broke even in 3 Broke even in
w ithin 3 years
to 6 years
more than 6
years
Ever broke
even
Never broke
even
No data
[source: Ofcom]
PROFITABILITY OF LOCAL COMMERCIAL STATIONS
coverage area average profits % of stations
average
population
(£k per
profitable
station age
('000)
annum)
(years)
<50
-3
58
6
50-150
-20
36
8
150-250
65
48
10
250-500
400
65
15
500-1000
865
95
21
1000-5000
1,200
89
15
>5000
1,400
73
14
[source: Ofcom]
 The majority of local radio stations launched since 1996 have not yet broken even
 Small stations serving populations under 150,000 rarely achieve profitability
 Stations’ budgets are dominated by fixed costs (average 70% of total costs)
 50% of stations either lose money or make a profit of less than £100,000 per annum
 40% of all commercial radio stations lose money
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
7

8.
Grant Goddard
UK commercial radio revenue yields
RADIO INDUSTRY REVENUE YIELD (£ 2006 prices per
1000 hours listened)
radio specialist
30
25
20
15
10
5
0
1999
2000
2001
2002
2003
2004
2005
2006
[source: Radio Advertising Bureau/RAJAR/Grant Goddard]
COMMERCIAL RADIO STATION REVENUES
revenue (£ per
% of total
% of industry
quarter)
commercial
revenues
stations
<250k
63
11
250k-500k
13
10
500k-1m
11
16
>1m
13
63
[source: Ofcom]
 The radio industry’s revenue yield has fallen from its peaks in 2000 and 2004
 There is a ‘triple whammy’ impact for the industry – not only are total revenues and total hours listened
falling, but the revenue yield achieved from each 1000 hours listened is falling too
 The ‘cost per thousand’ to advertisers has similarly been falling
 A small number of large stations generate most of the commercial radio industry’s revenues
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
8

9.
Grant Goddard
UK commercial radio listening
radio specialist
SHARE OF RADIO LISTENING (% )
SHARE OF RADIO LISTENING (% )
60
Local Commercial Radio
BBC Radio One
50
40
50
40
30
30
20
20
BBC Radio
[source: RAJAR]
2007Q2
2006Q2
2005Q2
2004Q2
2003Q2
2002Q2
2001Q2
2000Q2
1999Q2
1998Q2
1997Q2
1996Q2
1995Q2
1994Q2
0
1993Q2
10
2007Q2
2006Q2
2005Q2
2004Q2
2003Q2
2002Q2
2001Q2
2000Q2
1999Q2
1998Q2
1997Q2
1996Q2
1995Q2
1994Q2
1993Q2
10
0
Commercial Radio
[source: RAJAR]
 BBC Radio lost share dramatically in 1993/4 as a direct result of radical programming changes at Radio
One
 Local commercial radio benefited directly from this huge loss of listening to BBC Radio One in 1993/4
 However, since then, commercial radio has not managed to retain this audience ‘windfall’, and its listening
has been eroded by defections to BBC Radios One and Two
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
9

10.
Grant Goddard
BBC Radio One listening
radio specialist
E ndi ng
BBC RADIO ONE: % SHARE
30%
M ar
1999
E ndi ng
12
BBC RADIO ONE: AVERAGE HOURS/WEEK
2000
10
E ndi ng
M ar
M ar
2001
E ndi ng
20%
M ar
2001
E ndi ng
8
M ar
2002
2002
E ndi ng
E ndi ng
15%
M ar
2003
6
M ar
2003
E ndi ng
E ndi ng
M ar
10%
2004
1999
M ar
2000
E ndi ng
M ar
E ndi ng
M ar
25%
E ndi ng
M ar
4
2004
E ndi ng
E ndi ng
M ar
M ar
2005
5%
E ndi ng
2005
2
E ndi ng
M ar
M ar
2006
0%
E ndi ng
M ar
0-14
15-24
25-34
35-44
45-54
55-64
65+
2006
0
[source: RAJAR]
E ndi ng
0-14
2007
15-24
25-34
35-44
45-54
55-64
65+
M ar
2007
[source: RAJAR]
 The audience for Radio One is becoming significantly older
 In the early 1990s, the BBC had re-positioned Radio One as a youth radio station
 Since then, the station’s audience is increasingly dominated by 25-34 year olds
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
10

11.
Grant Goddard
BBC Radio Two listening
radio specialist
E ndi ng
BBC RADIO TWO: % SHARE
25%
1999
E ndi ng
BBC RADIO TWO: REACH (% )
M ar
40%
M ar
1999
E ndi ng
E ndi ng
M ar
2000
M ar
35%
2000
E ndi ng
20%
M ar
2001
E ndi ng
M ar
30%
2001
E ndi ng
M ar
15%
2002
E ndi ng
M ar
25%
2002
E ndi ng
M ar
2003
10%
E ndi ng
20%
M ar
2003
E ndi ng
M ar
2004
E ndi ng
M ar
5%
E ndi ng
15%
M ar
2004
E ndi ng
10%
M ar
2005
E ndi ng
M ar
2005
5%
E ndi ng
M ar
2006
0%
E ndi ng
M ar
0-14
15-24
25-34
35-44
45-54
55-64
65+
2007
[source: RAJAR]
2006
0%
E ndi ng
0-14
15-24
25-34
35-44
45-54
55-64
65+
M ar
2007
[source: RAJAR]
 The audience for Radio Two is becoming significantly younger
 The station’s audience had been dominated by 50+ year olds
 Radio Two has now made huge inroads into the 25-34 and 35-44 age groups
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
11

12.
Grant Goddard
BBC Radio Four listening
radio specialist
E ndi ng
BBC RADIO FOUR: % SHARE
25%
M ar
1999
18
BBC RADIO FOUR: AVERAGE HRS/WEEK
E ndi ng
M ar
2000
M ar
2001
E ndi ng
M ar
15%
2000
E ndi ng
14
M ar
2001
12
E ndi ng
M ar
2002
10
E ndi ng
M ar
2003
10%
E ndi ng
M ar
2003
8
E ndi ng
M ar
2004
M ar
6
2004
E ndi ng
M ar
5%
2005
E ndi ng
M ar
E ndi ng
4
M ar
2
E ndi ng
2005
M ar
2006
0%
E ndi ng
M ar
0-14
15-24
25-34
35-44
45-54
55-64
65+
2007
[source: RAJAR]
1999
M ar
2002
E ndi ng
M ar
E ndi ng
16
E ndi ng
20%
E ndi ng
2006
0
E ndi ng
0-14
15-24
25-34
35-44
45-54
55-64
65+
M ar
2007
[source: RAJAR]
 Radio Four has not succeeded in attracting listening from younger age groups
 The station has firmly consolidated its position amongst over-55’s, mainly through them spending more
time with the station
 Radio Four’s increasing dominance of over-55’s makes it harder for commercial radio to try and launch
(belatedly) stations targeting this demographic
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
12

13.
Grant Goddard
UK commercial radio listening
E ndi ng
COMMERCIAL RADIO: % SHARE
80%
radio specialist
1999
E ndi ng
M ar
70%
2000
E ndi ng
M ar
60%
2001
E ndi ng
M ar
50%
2002
E ndi ng
40%
M ar
2003
E ndi ng
30%
M ar
2004
E ndi ng
20%
M ar
2005
E ndi ng
10%
M ar
2006
0%
E ndi ng
M ar
0-14
15-24
25-34
35-44
45-54
55-64
65+
2007
[source: RAJAR]
E ndi ng
COMMERCIAL RADIO: AVERAGE
HOURS/WEEK
M ar
18
M ar
1999
E ndi ng
M ar
2000
16
E ndi ng
M ar
2001
14
E ndi ng
M ar
12
2002
E ndi ng
10
M ar
2003
8
E ndi ng
M ar
2004
6
E ndi ng
M ar
4
2005
E ndi ng
2
M ar
0
E ndi ng
2006
M ar
0-14
15-24
25-34
35-44
45-54
55-64
65+
2007
[source: RAJAR]
 Commercial radio is losing share dramatically in the key 25-34 and 35-44 age groups
 This loss in share is attributable mainly to lower listening levels, rather than reach, amongst these age
groups and similarly amongst 15-24 year olds
 By 2008, it is likely that 15-24 year olds will remain the only adult demographic in which commercial radio
has the dominant share of listening (over the BBC)
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
13

14.
Grant Goddard
UK all radio listening
radio specialist
100%
M ar
1999
E ndi ng
ALL RADIO: AVERAGE HOURS/WEEK
E ndi ng
ALL RADIO: REACH (% )
30
M ar
1999
E ndi ng
E ndi ng
95%
M ar
90%
E ndi ng
2000
M ar
2000
25
E ndi ng
M ar
M ar
2001
2001
85%
E ndi ng
M ar
80%
20
E ndi ng
M ar
2002
2002
E ndi ng
75%
M ar
70%
E ndi ng
15
E ndi ng
2003
M ar
2004
65%
M ar
2003
E ndi ng
M ar
10
2004
E ndi ng
60%
E ndi ng
M ar
M ar
2005
E ndi ng
55%
E ndi ng
E ndi ng
M ar
50%
2005
5
M ar
2006
2006
M ar
0-14
15-24
25-34
35-44
45-54
55-64
65+
2007
[source: RAJAR]
0
E ndi ng
M ar
0-14
15-24
25-34
35-44
45-54
55-64
65+
2007
[source: RAJAR]
 Radio listening has held up remarkably well to the challenge of new media (online, personal music players,
games)
 Radio’s key characteristics as a portable medium (compared to TV or computers) and as a secondary
medium (to accompany primary activities such as work or driving) make it more resilient than other
traditional media
 Radio remains firmly a ‘mass medium’ reaching 90%+ of the adult population each week
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
14

15.
Grant Goddard
UK all radio listening – males
radio specialist
E ndi ng
ALL RADIO: REACH (% )
100%
M ar
1999
30
ALL RADIO: AVERAGE HOURS/WEEK
M ar
90%
E ndi ng
2000
2000
E ndi ng
M ar
2001
2001
E ndi ng
1999
M ar
25
M ar
85%
M ar
E ndi ng
E ndi ng
95%
E ndi ng
20
E ndi ng
80%
M ar
M ar
2002
2002
75%
E ndi ng
M ar
15
E ndi ng
M ar
2003
2003
70%
E ndi ng
M ar
65%
2004
E ndi ng
10
M ar
2004
E ndi ng
E ndi ng
60%
M ar
2005
55%
M ar
5
2005
E ndi ng
E ndi ng
M ar
M ar
50%
2006
0-14
15-24
male
25-34
male
35-44
male
45-54
male
55-64
male
65+ male
E ndi ng
M ar
2007
[source: RAJAR]
0
2006
0-14 male
15-24
male
25-34
male
35-44
male
45-54
male
55-64
male
65+ male
E ndi ng
M ar
2007
[source: RAJAR]
 Radio’s weekly reach of 15-24 year old males has remained consistent
 Hours listened to all radio by 15-24 year old males is in decline, as their time is increasingly constrained by
competing entertainment sources (online, mobile phones, socialising)
 Radio needs to produce compelling content for this demographic to arrest the decline
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
15

16.
Grant Goddard
Digital radio listening
16%
radio specialist
DIGITAL RADIO HRS LISTENED BY PLATFORM
(% )
8%
LISTENING VIA DAB
LISTENING VIA TV
LISTENING VIA INTERNET
DIGITAL UNSPECIFIED
14%
12%
DIGITAL RADIO HRS LISTENED BY
PLATFORM (% )
COMMERCIAL RADIO
7%
BBC RADIO
6%
10%
5%
8%
4%
6%
3%
4%
2%
2%
1%
2007Q2
2007Q1
2006Q4
2006Q3
2006Q2
2006Q1
2005Q4
2005Q3
2005Q2
2005Q1
2004Q4
0%
[source: RAJAR]
0%
LISTENING VIA
DAB
LISTENING VIA TV
LISTENING VIA
INTERNET
DIGITAL
UNSPECIFIED
[source: RAJAR]
 Digital radio listening accounts for 13% of all radio listening
 DAB radios are the most significant source of digital listening
 The BBC dominates DAB radio listening
 Listening to radio via the internet remains relatively insignificant (~1%)
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
16

17.
Grant Goddard
Digital-only radio stations
radio specialist
SHARE OF LISTENING TO DIGITAL-ONLY
STATIONS (%)
LISTENING TO DIGITAL-ONLY RADIO STATIONS
14%
reach (%) all adults
12%
100%
hours (%) all radio
Commercial
BBC
10%
75%
8%
50%
6%
4%
25%
2%
2007Q2
2007Q1
2006Q4
2006Q3
2006Q2
2006Q1
2005Q4
2005Q3
2005Q2
2005Q1
2004Q4
2004Q3
2004Q2
2004Q1
2003Q4
2003Q3
2003Q2
2007Q2
2007Q1
2006Q4
2006Q3
2006Q2
2006Q1
2005Q4
2005Q3
2005Q2
2005Q1
2004Q4
2004Q3
2004Q2
2004Q1
2003Q4
2003Q3
2003Q2
2003Q1
[source: RAJAR]
2003Q1
0%
0%
[source: RAJAR]

Although listening to digital radio accounts for 13% of all radio listening, 72% of that digital listening is to
simulcasts of analogue stations

Less than 4% of ALL listening is to radio stations exclusively available via digital

Commercial radio’s share of listening to digital-only radio stations is falling, while the BBC (despite its later
digital launch) is soon likely to dominate the digital radio platform, just as it already dominates the
analogue radio platform

The BBC offers only 5 digital-only stations, all available nationally; whereas commercial radio offers 32
digital-only stations, 9 of which are national, with the remainder available on regional/local multiplexes
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
17

18.
Grant Goddard
Digital radio industry forecasts
radio specialist
DAB CUMULATIVE SET SALES (millions)
25
DIGITAL RADIO LISTENING (% of total listening)
100
20
80
15
60
10
40
5
20
RAJAR Platform Survey
Ofcom forecast
GfK actual
[source: GfK & DRDB]
2020
2019
2018
2017
2016
2015
2014
2013
2010
2012
2009
2011
2008
2010
2007
2009
2006
2008
2005
2007
2004
2006
2003
2005
2002
0
2004
DRDB forecast
0
[source: RAJAR & Ofcom]
 No analogue switch-off date has yet been fixed for radio
 Radio industry projections for DAB receiver sales and digital radio listening are both ambitious
 Growth rates to date do not exhibit exponential characteristics
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
18

19.
Grant Goddard
DAB radio receiver sales
radio specialist
DAB RADIO RECEIVER CUMULATIVE SALES
('000s)
6,000
YEAR-ON-YEAR CHANGE IN DAB RADIO SALES (%)
200
12-month moving average
5,000
150
4,000
100
3,000
2,000
50
1,000
Apr-07
Feb-07
Dec-06
Oct-06
Aug-06
Jun-06
Apr-06
Feb-06
Dec-05
Oct-05
Aug-05
Jun-05
Apr-05
Feb-05
Mar-07
Dec-06
Sep-06
Jun-06
Mar-06
Dec-05
Sep-05
Jun-05
Mar-05
Dec-04
Sep-04
Jun-04
Mar-04
Dec-03
Sep-03
Jun-03
Mar-03
Dec-02
[source: GfK/DRDB]
Dec-04
0
0
[source: GfK/DRDB]
 The growth rate of DAB receiver sales is not emulating the experience of Freeview in TV
 By May 2007, the year-on-year annualised growth rate of DAB radio receiver sales had fallen to 13%
 Analogue and digital broadcasts are likely to be required simultaneously for some time
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
19

20.
Grant Goddard
BBC online listening
radio specialist
HOURS LISTENED PER QUARTER TO BBC
RADIO ONLINE
50,000,000
STREAMING
ON DEMAND
40,000,000
PODCASTS
30,000,000
20,000,000
10,000,000
2007Q2
2007Q1
2006Q4
2006Q3
2006Q2
2006Q1
2005Q4
2005Q3
2005Q2
2005Q1
2004Q4
2004Q3
2004Q2
2004Q1
2003Q4
0
[source: BBC]
 The BBC has pioneered the offer of radio programming online as simulcast streams, on-demand shows and
podcasts
 Usage data exhibits an almost linear growth pattern for these services, despite substantial cross-promotion
across BBC outlets
 BBC Online listening (globally) is currently 72m hours per quarter, whereas total BBC radio listening (in the
UK alone) is 7,456m hours per quarter
 Commercial radio’s online offerings are not yet as developed as the BBC’s
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
20

21.
Grant Goddard
Commercial radio ‘heritage’ FM stations
radio specialist
COMMERCIAL HERITAGE FM STATIONS (% share listening)
30
Q2 1999
25
Q2 2007
20
15
10
5
Hallam FM
97.4 Rock FM
Downtown
Radio (DTR)
Metro Radio
Radio City 96.7
Clyde 1 FM
96.4 BRMB
Key 103
(Manchester)
LBC 97.3
Radio
95.8 Capital
0
[source: RAJAR, ranked by population coverage]
 13% of commercial radio stations earn 63% of industry revenues
 ‘Heritage’ FM stations, traditionally the ‘cash cows’ of the industry, have lost huge amounts of listening
since the 1990s
 Revenues of these stations (owned mainly by GCap and EMAP) are falling substantially
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
21

22.
Grant Goddard
Commercial radio ‘heritage’ AM stations
radio specialist
COMMERCIAL HERITAGE AM STATIONS (% share listening)
14
Q2 1999
12
Q2 2007
10
8
6
4
2
Classic Gold
Bristol/Bath/Wiltshire
Classic Gold
Wolverhampton
Magic AM
(Sheffield)
Magic 1152
(Newcastle)
Magic 1548
(Liverpool)
Clyde 2
Capital Gold
Birmingham
Magic 1152
(Manchester)
LBC News 1152
London
Capital Gold
0
[source: RAJAR, ranked by population coverage]
 ‘Heritage’ AM stations have lost listening even more substantially than their FM counterparts
 Commercial radio has attributed these declines to users’ preference for FM reception over AM reception
 Revenues of these stations (owned mainly by GCap and EMAP) are also falling substantially
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
22

23.
Grant Goddard
Commercial radio ‘post-1990’ stations
radio specialist
POST-1990 COMMERCIAL STATIONS (% share listening)
7
Q2 1999
6
Q2 2007
5
4
3
2
1
London
Virgin Radio
London)
Kismat Radio
1035 (Greater
Radio
Premier Christian
(London)
Smooth Radio
Sunrise Radio
(Greater London)
London
Choice FM
XFM 104.9
Kiss 100 FM
Magic 105.4
Heart 106.2 FM
0
[source: RAJAR, ranked by population coverage]
 The substantial losses in listening to commercial radio FM and AM stations are not generally the result of
audience fragmentation, nor of cannibalisation within the commercial radio sector
 Post-heritage commercial radio stations (those launched after 1990) have benefited only marginally from
the losses suffered by the heritage stations since 1999
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
23

24.
Grant Goddard
National radio stations
radio specialist
NATIONAL RADIO STATIONS (% share listening)
16
Q2 1999
14
Q2 2007
12
10
8
6
4
2
Total Virgin Radio
talkSPORT
Classic FM
Live
BBC Radio 5
BBC Radio 4
BBC Radio 3
BBC Radio 2
BBC Radio 1
0
[source: RAJAR]
 National commercial radio stations have not benefited from the audience losses at heritage local
commercial stations
 BBC Radio Two has benefited and increased its lead as the most listened to UK radio station (13m
listeners per week, 164m hours per week)
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
24

25.
Grant Goddard
UK commercial radio ownership
COMMERCIAL RADIO OWNERS (% share of commercial radio listening)
35
30
radio specialist
29.2
23.4
25
20
15
11.4
10.8
10
1.7
1.6
1.1
0.8
0.8
0.7
0.4
0.3
0.2
0.1
0.0
0.0
0.0
Lincs FM Group
Sunrise Group
UKRD
Cumberland
News Group
Tindle Radio
Kent
Messenger
Town &
Country
Northern Media
Group
Forward Media
CanWest
MediaWorks UK
Absolute Radio
International
Laser
Broadcasting
UTV Radio
Guardian Media
Group
Chrysalis/Global
Radio
EMAP Radio
GCap Media
0
Scottish Media
Group
3.4
5
The Local Radio
Company
7.0
[source: RAJAR]
 Ownership of commercial radio is skewed towards a small number of large groups
 Two groups (GCap and EMAP) control more than half of the industry, while three groups (GCap, EMAP and
Chrysalis/Global Radio) control almost two-thirds
 Further industry consolidation is possible under existing ownership rules
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
25

26.
Grant Goddard
UK commercial radio industry targets
radio specialist
COMMERCIAL RADIO SHARE OF DISPLAY
ADVERTISING SPEND (% )
9%
Radio % share
RadioCentre targets [Jan07]
8%
7%
6%
5%
4%
3%
2%
1%

Digital platforms’ share of all commercial radio listening
 30% by 2009, 50% by 2011 (from 13.7% in Q2 2007)
2011
2010
2009
2008
2007
2006
2005
2004
2003
RadioCentre targets [Jan07]
40
30
20
10
60%
50%
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
0
2000
Commercial radio’s share of listening versus the BBC
 46% by 2009, 48% by 2011 (from 43.5% in Q2 2007)
COMMERCIAL RADIO % SHARE
50
1999

Radio’s share of display advertising
 7% by 2009, 8% by 2011 (from 6% in 2006)
2002
COMMERCIAL RADIO SHARE OF LISTENING
(% )
60

2001
In January 2007, the commercial radio industry adopted a five-year plan
with targets for:
2000
1999
0%
SHARE OF COMMERCIAL RADIO LISTENING
VIA DIGITAL (% )
actual % share
RadioCentre targets [Jan07]
40%
30%
20%
10%
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
2011
2010
2009
2008
2006
Q2 2007
[source: RAJAR, RAB, RadioCentre]
2005
2004
0%
26

27.
Grant Goddard
radio specialist
 FORECASTS
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
27

28.
Grant Goddard
Assumptions
radio specialist
 Existing strategies of the commercial radio groups and the BBC will continue to be pursued
 The launch of the second national digital commercial radio multiplex in 2008 will merely cannibalise existing
commercial radio listening
 Listening to online simulcasts of station broadcasts is included in the forecasts (as it is in RAJAR)
 Listening to ‘listen again’ on-demand radio programmes is not included in the forecasts (as RAJAR)
 Population changes are based on Statistics Office/Government Actuary 2004-based projections
 NB: No forecasts are included for digital versus analogue listening - RAJAR data released to date is too
irregular and has used differing methodologies
 NB: No forecasts are included for digital versus analogue revenues – limited data released to date is not
transparent
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
28

29.
Grant Goddard
Population forecast
radio specialist
11,000
UK POPULATION PROJECTIONS BY AGE
('000)
10,000
2004
2005
9,000
2006
2007
8,000
2008
2009
2010
7,000
2011
2012
6,000
15-24
25-34
35-44
45-54
55-64
65+
[source: Government Actuary]
 The ageing of the population benefits BBC radio, which dominates listening in the 50+ demographics
 Commercial radio has very few services targeted at the 50+ demographic
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
29

30.
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 continues to be a mass medium, reaching around 90% of the adult population
 Time spent listening to radio declines, in the face of competition from other media and entertainment
sources
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
30

31.
Grant Goddard
Total radio listening forecast
radio specialist
ALL RADIO REACH: 15-24 (% /wk)
95
91.7 91.6
92.4
91.5 91.3
ALL RADIO LISTENING: 15-24 (hrs/wk)
30
90.5
89.4 89.3 89.2 89.2 89.2 89.2 89.2 89.2
90
25
20.8 21.0
85
21.6
20.9 21.4 21.0
20
80
20.2 19.7
19.2
18.6
18.1
17.6
17.1
16.7
[source: RAJAR/Grant Goddard]
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
15
[source: RAJAR/Grant Goddard]
 The latest audience data suggests that the declining reach amongst 15-24 year olds experienced 20012005 has abated
 Time spent listening to the radio continues to fall, under pressure from competing leisure opportunities
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
31

32.
Grant Goddard
Total radio listening forecast
radio specialist
ALL RADIO REACH: 25-34 (% /wk)
95
90.7
92.3
91.7 91.5
90.1
89.8 89.7 89.7 90.1
90
90.6 91.0
ALL RADIO LISTENING: 25-34 (hrs/wk)
30
91.5 91.9
92.4
25
21.6
22.3 22.5 22.0
21.8 22.2 22.0
21.1
20.4
20
85
80
19.7
19.0
18.4
17.7
17.1
[source: RAJAR/Grant Goddard]
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
15
[source: RAJAR/Grant Goddard]
 Similar to the 15-24 demographic, reach is not the problem amongst 25-34 year olds and is likely to remain
within a window between 90 and 93%
 Time spent listening continues to decline, with competitive pressure for this age group’s time
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
32

33.
Grant Goddard
Total radio listening forecast
radio specialist
ALL RADIO REACH: 35-44 (% /wk)
92.9 92.5 92.6
91.2
92.0
92.5
92.0 92.1 92.3 92.4
91.5 91.7 91.9
25
90
22.3
[source: RAJAR/Grant Goddard]
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
1999
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
15
2000
80
23.8 23.5 23.7 23.5
23.3 23.3 23.3 23.2 23.2 23.1 23.1 23.0
20
1999
85
23.0
2001
92.4
ALL RADIO LISTENING: 35-44 (hrs/wk)
30
2000
95
[source: RAJAR/Grant Goddard]
 For this age group, reach remains consistent
 Time spent listening remains steady too, as this demographic is under less pressure from competing leisure
pursuits, and because radio is already embedded in their routine
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
33

34.
Grant Goddard
Total radio listening forecast
radio specialist
ALL RADIO REACH: 45-54 (% /wk)
95
90.9
91.8
ALL RADIO LISTENING: 45-54 (hrs/wk)
30
92.3 92.3 92.4 91.9 92.4
91.8 91.7 91.6 91.5
91.4 91.3 91.2
[source: RAJAR/Grant Goddard]
2012
2011
2010
23.7 23.3
22.9 22.5
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
15
2002
80
25.5 25.4 25.5 25.9 25.4
25.0 24.6
24.1
20
2001
85
2000
25 24.2
1999
90
24.9
[source: RAJAR/Grant Goddard]
 Reach remains relatively constant amongst 45-54 year olds
 Time spent listening is falling slightly
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
34

35.
Grant Goddard
Total radio listening forecast
radio specialist
ALL RADIO REACH: 55-64 (% /wk)
95
90 88.7
89.8
90.7 90.9 90.5
90.3
ALL RADIO LISTENING: 55-64 (hrs/wk)
30
91.4 91.0
91.0 90.9 90.8 90.8 90.7 90.7
25.4
26.3
26.9 26.6 26.9 27.3 26.6
26.4 26.2 26.0
25.8 25.6 25.4
25.2
25
[source: RAJAR/Grant Goddard]
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
15
2001
80
2000
20
1999
85
[source: RAJAR/Grant Goddard]
 Reach remains constant amongst 55-64 year olds
 Time spent listening is likely to oscillate between 25 and 27 hours per week
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
35

36.
Grant Goddard
Total radio listening forecast
radio specialist
ALL RADIO REACH: 65+ (% /wk)
95
25
90
86.1 85.9
85.5 85.9 85.7
ALL RADIO LISTENING: 65+ (hrs/wk)
30
24.6
25.5
26.6 26.5 26.6 26.4
26.1 26.0 25.8
25.7 25.5 25.3
25.1 25.0
86.8
85.8
85 83.7
84.9
84.2
83.4
20
82.7
81.9
81.2
[source: RAJAR/Grant Goddard]
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
1999
15
80
[source: RAJAR/Grant Goddard]
 Reach continues to fall as:
• A greater proportion of this demographic is aged 85+
• Stations such as BBC Radio Two and BBC local radio serve this demographic less and less directly
• The commercial sector has no specific offerings to attract this demographic
 Time spent listening of those who continue to listen remains almost constant
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
36

37.
Grant Goddard
Commercial radio listening forecast
radio specialist
COMMERCIAL RADIO - REACH (% )
90
COMMERCIAL RADIO LISTENING
(average hrs/wk/listener)
20
80
70 65.2 65.2 65.5 65.1 65.2 64.2
62.8 62.1 61.9 61.6 61.3
61.0 60.6 60.3
60
15.1
15
50
15.5 15.5 15.2 15.3 15.2
15.0 14.7
14.5 14.2
14.0 13.7
13.5 13.2
40
30
[source: RAJAR/Grant Goddard]
 Time spent listening to commercial radio declines
significantly
 As a result, commercial radio’s share (versus the
BBC) continues to fall
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
[source: RAJAR/Grant Goddard]
COMMERCIAL RADIO % SHARE OF LISTENING
70
 Commercial radio’s weekly reach continues its slow
decline
2000
1999
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
10
60
50
47.8 47.0
45.9 45.5 45.2
44.6 43.5
43.1 42.9 42.6 42.3 42.0
41.7 41.4
40
30
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
20
[source: RAJAR/Grant Goddard]
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
37

38.
Grant Goddard
Commercial radio listening forecast
90
80
COMMERCIAL RADIO REACH: 15-24
(% /wk)
80.3 80.5 81.0 79.7 80.8 79.6
radio specialist
COMMERCIAL RADIO LISTENING: 15-24
(hrs/wk)
20
75.7 75.2 75.0 74.9 74.7 74.6 74.4 74.3
70
15
60
14.5
15.2
15.7
15.2
15.6 15.4
14.5
14.2
13.7
50
13.3
12.9
12.5
12.1
11.8
40
30
[source: RAJAR/Grant Goddard]
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
[source: RAJAR/Grant Goddard]
COMMERCIAL RADIO SHARE: 15-24 (% )
70
61.1
 Commercial radio’s reach remains stable amongst
15-24 year olds
2000
1999
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
10
63.5 63.7 63.1 64.6 64.3
60
61.0 60.7 60.3 59.9 59.6
59.3 59.1 58.9
50
 Time spent listening falls dramatically
40
30
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
20
1999
 Commercial radio’s share falls, but not as
dramatically, because 15-24 year olds are listening
less to ALL radio, not only commercial radio
[source: RAJAR/Grant Goddard]
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
38

39.
Grant Goddard
Commercial radio listening forecast
COMMERCIAL RADIO REACH: 25-34
(% /wk)
90
80 76.2 76.2 76.2 73.5 75.1
72.4
70
radio specialist
COMMERCIAL RADIO LISTENING: 25-34
(hrs/wk)
20
70.1 69.6 69.5 69.5 69.4 69.3 69.3 69.2
15.8
60
16.2 15.9
15.8 15.6 15.7
15.0
15
14.4
13.7
50
13.0
12.4
11.7
40
30
11.2
10.6
[source: RAJAR/Grant Goddard]
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
[source: RAJAR/Grant Goddard]
COMMERCIAL RADIO SHARE: 25-34 (% )
70
 Similarly to 15-24 year olds, commercial radio’s
reach remains fairly constant
2000
1999
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
10
61.6 60.6
60
 Time spent listening falls dramatically
53.2 52.8 51.6
50.6 49.5
48.5 47.5
46.5
50
 Commercial radio’s share falls, accelerated by this
demographic spending more time with BBC Radio
One
59.0 58.5 58.9
57.2
40
30
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
20
[source: RAJAR/Grant Goddard]
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
39

40.
Grant Goddard
Commercial radio listening forecast
COMMERCIAL RADIO REACH: 35-44
(% /wk)
90
radio specialist
COMMERCIAL RADIO LISTENING: 35-44
(hrs/wk)
20
80 74.2 75.1 75.4 73.7
73.3 72.5
70.8 69.7
68.9 68.1 67.3
66.6 65.9 65.2
70
16.1 16.3
16.7 16.5 16.6
16.1 16.0 15.9 15.9 15.9
15.8 15.7 15.7 15.6
15
60
50
40
30
[source: RAJAR/Grant Goddard]
 Time spent listening to commercial radio falls
marginally, under competition from BBC Radio Two
 Commercial radio’s share continues to fall
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
[source: RAJAR/Grant Goddard]
COMMERCIAL RADIO SHARE: 35-44 (% )
70
 Commercial radio’s reach continues to falls marginally
amongst 35-44 year olds
2000
1999
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
10
58.6 57.6
57.0 55.9
55.3 54.0
53.1 52.0
51.2 50.5 49.8
49.1 48.5 47.8
50
60
40
30
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
20
[source: RAJAR/Grant Goddard]
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
40

41.
Grant Goddard
Commercial radio listening forecast
COMMERCIAL RADIO REACH: 45-54
(% /wk)
90
radio specialist
COMMERCIAL RADIO LISTENING: 45-54
(hrs/wk)
20
80
70 66.9 66.9 67.0 67.2 66.8 66.6 65.9 65.8 66.0 66.2 66.5 66.8 67.0 67.3
60
15.7 15.7 15.8 15.5 15.4
15.4 15.6 15.7 15.7
15.3 15.2 15.1 15.1
15.0
15
50
40
30
[source: RAJAR/Grant Goddard]
 Time spent listening to commercial radio similarly
remains constant
 Commercial radio’s share increases slowly, as the
sector’s audience ages
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
[source: RAJAR/Grant Goddard]
COMMERCIAL RADIO SHARE: 45-54 (% )
70
 Commercial radio’s reach in this demographic
remains constant
2000
1999
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
10
60
48.3 49.1
46.7 47.5
50 46.8 45.6
44.6 45.0 44.6 43.8 44.3 44.5 45.2 46.0
40
30
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
20
[source: RAJAR/Grant Goddard]
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
41

42.
Grant Goddard
Commercial radio listening forecast
COMMERCIAL RADIO REACH: 55-64
(% /wk)
90
radio specialist
COMMERCIAL RADIO LISTENING: 55-64
(hrs/wk)
20
80
70
60 54.9 55.1 55.4 56.1 56.3 55.5 56.5 55.5 55.1 54.6 54.2 53.8
53.3 52.9
15 14.3 14.5 14.2
13.7 13.9
14.4 14.4 14.3
50
14.0 13.7
13.4 13.1
12.9 12.6
40
30
[source: RAJAR/Grant Goddard]
 The commercial radio sector fails to develop a
product to persuade this demographic away from
BBC radio services
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
[source: RAJAR/Grant Goddard]
COMMERCIAL RADIO SHARE: 55-64 (% )
70
 Reach, time spent listening and share remain
relatively static
2000
1999
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
10
60
50
40
34.9 33.8
30
32.4 31.8 31.8 32.5 33.4 33.0 32.3 31.7 31.0
30.4 29.8 29.2
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
20
[source: RAJAR/Grant Goddard]
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
42

43.
Grant Goddard
Commercial radio listening forecast
radio specialist
COMMERCIAL RADIO REACH: 65+ (% /wk)
90
COMMERCIAL RADIO LISTENING: 65+
(hrs/wk)
20
80
70
60
15
13.4
50
40.4 39.5 40.2
13.5
42.7 42.3 42.1 41.7
40.7 40.2 39.9 39.5 39.2
38.9 38.5
30
13.9
13.5 13.6 13.7 13.7 13.8 13.8
13.2 13.1 13.2 13.5
[source: RAJAR/Grant Goddard]
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
10
1999
40
14.0
[source: RAJAR/Grant Goddard]
COMMERCIAL RADIO SHARE: 65+ (% )
70
60
 The 65+ age group’s interest in commercial radio
remains marginal
50
40
30 26.4 25.4
25.5 25.8 26.1 26.4
23.9 24.8 24.1 24.5 24.7 24.7 24.9 25.2
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
20
[source: RAJAR/Grant Goddard]
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
43

44.
Grant Goddard
Commercial radio listening forecast
radio specialist
RADIO LISTENING ('000 hours per week)
1,250,000
ALL RADIO
COMMERCIAL RADIO
1,000,000
750,000
500,000
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
250,000
[source: RAJAR/Grant Goddard]
 Total hours listened to all radio is declining by 1% year-on-year
 Hours listened to commercial radio will continue to decline by almost 2% year-on-year
 Commercial radio’s position is a result of:

The ageing of the population

Increased competition for the leisure time of teens, 20 and 30 year olds, in which commercial radio
has traditionally dominated listening

Attrition to commercial radio’s ‘heartland audience’ of 15-44 year olds by BBC Radio One targeting
older listeners and BBC Radio Two targeting younger listeners
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
44

45.
Grant Goddard
Commercial radio revenues forecast
radio specialist
COMMERCIAL RADIO REVENUES (£ 2006 prices per
1000 hours listened)
30
£27.40
£24.42 £25.07
25 £22.66
£26.22
£27.43
£26.27
£24.59 £23.90
£23.46 £23.19 £22.80
£22.41 £22.02
20
15
10
5
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
0
[source: RAJAR/Radio Advertising Bureau/Grant Goddard]
 Commercial radio’s ability to monetise its listening will become harder because:

Cost per thousands are falling

Inventory has increased substantially with the launch of digital-only commercial stations

‘Heritage’ stations are no longer delivering such substantial audiences for advertisers

Commercial radio is losing ground in advertisers’ minds to new competitors (online, games, mobile)

Commercial radio is not an exciting, attention-grabbing environment
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
45

46.
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 around 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; independent – PrimeTime)
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
46

47.
Grant Goddard
UK commercial radio share of listening
COMMERCIAL RADIO SHARE OF LISTENING
(% )
50
47.8
COMMERCIAL RADIO SHARE OF LISTENING
(% )
60
47.0
45.9
radio specialist
COMMERCIAL RADIO % SHARE
RadioCentre targets [Jan07]
50
45.5 45.2
45
44.6
43.5
43.1 42.9
42.6 42.3
42.0 41.7
41.4
40
40
30
20
10
35
[Source: RAJAR/Grant Goddard]
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
0
[Source: RAJAR/RadioCentre]
 Our forecast predicts a continuing 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 continue to converge towards the middle ground (ie: GMG’s conversion of the
Saga stations to its Smooth format), rather than offering unique content
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
47

48.
Issues for the commercial radio industry
Grant Goddard
radio specialist
 No date has yet been set for digital radio switchover/analogue switch off
 The costs of DAB transmission alongside existing analogue services will continue to burden the industry
 The costs of transmission contracts with Arqiva/National Grid Wireless require re-negotiation
 Music royalty agreements with PRS and PPL require re-negotiation
 Radio’s regulatory regime requires reform to level the playing field with new competitors
 The 2003 Communications Act requires updating to reflect the emerging media landscape
 The DAB platform is in danger of marginalisation without compelling content to drive hardware sales
 The commercial radio industry has to work together to reduce its fixed cost base, during a period when
revenues will continue to decline in real terms
UK Commercial Radio Sector: Current Indicators & Forecasts © Grant Goddard: December 2007
48