Radio – a mental concept in transition The term ‘radio’ has been repurposed for streaming music – are the streaming music services the natural progression of ‘radio’, transcending the traditional infrastructures while delivering similar content?

1. Music 4.5 is
organised by
#m4pt5
#SmartRadio
Radio – a mental concept in transition
Mark Mulligan, Analyst, Midia Consulting

2. Mark Mulligan
September 24th 2013
Tuning In To Radio’s Future

3. • What constitutes radio in the digital era?
• How are the UK and global radio markets faring?
• What factors are driving today’s radio trends?
• What can we learn from the US market?
• What is the outlook for radio?
www.midiaconsulting.com – Mark Mulligan – September 2013

4. What Is Radio Anyway?
www.midiaconsulting.com – September 2013
Interactive
Radio?
Subscription
Services?
Web streaming?
Vevo/YouTube?
Traditional &
DAB Radio?
Podcasts?
Emerging digital
entertainment services
are blurring consumers’
perceptions of what
constitutes radio

5. Global radio ad spend down 0.4% in 2012
(Zenith)
UK radio ad spend up 4% in 2012 (RAB)
UK radio ad spend down 4% Q2 2013 (RAB)
3.4m more people listening to radio than 2008
Listener hours are down 4% from 2011

6. App and web
competition
Consumers expect
on-demand
experiences
Shift of
Advertising Spend
Smartphone
& Tablet
Listening
Solid Listening
Trends
Robust DAB
Market
UK Radio
Market
UK Radio Market Drivers and Inhibitors
www.midiaconsulting.com – September 2013

7. 45.1 45.7 46.8 47.1 46.6 48.4
1,003 1,008 1,055 1,076 1,023 1,028
0
500
1,000
1,500
0
20
40
60
80
100
2008 2009 2010 2011 2012 2013
Audience
Totalradioaudience
TotalListeningHours
(millions) (millions)
UK Radio Listening Has Remained Steady
Source: Rajar
www.midiaconsulting.com – May 2013

8. Radio Has Fared Far Better Than the Hi-Fi
www.midiaconsulting.com – Mark Mulligan - September 2013
71%
56%
50% 46%
44% 40%
18%
25%
39%
28%
34%
77%
69% 73% 69%
74% 70%
0%
20%
40%
60%
80%
100%
2007 2008 2009 2010 2011 2012
Listen on Hifi
Listen on MP3
Device
Radio
%ofconsumers
Penetration of Music Listening by Device
Source: Ofcom / MIDiA Consulting

9. DAB Underpins UK Digital Listening Growth But
Internet is Underperforming
www.midiaconsulting.com – Mark Mulligan - September 2013
16%
21%
25%
28% 32%
37%
11% 13% 15%
18% 20%
24%
2%
2% 3% 4% 4% 6%
0%
10%
20%
30%
40%
50%
Sep-08
Jan-09
May-09
Sep-09
Jan-10
May-10
Sep-10
Jan-11
May-11
Sep-11
Jan-12
May-12
Sep-12
Jan-13
May-13
All Digital
DAB
Internet
%totallistening
Share of Total UK Radio Listening
Source: Rajar

10. Mobile May Be Radio’s Best Route Into Youth
www.midiaconsulting.com – Mark Mulligan - September 2013

11. A Quick Look at the US Market
www.midiaconsulting.com – Mark Mulligan - September 2013
• Robust Interactive Radio sector
(Pandora = 6.8% radio listening)
• Strong satellite radio sector (25
million Sirius Subscribers)
• 58% of ad agencies are more
interested in streaming radio
than a year ago
• 86% ad agencies same – or
lower – levels of interest in
traditional radio
• Spot advertising down 2%
• Digital radio ad spend up 9%
• Total radio ad spend flat

12. What Will Radio Be 5 Years From Now?
www.midiaconsulting.com – Mark Mulligan - September 2013
• Radio, and radio-like programming, will become a central
tenet of on-demand music services (paid and free)
• More radio content will be consumed in a non-linear
fashion
• Radio will become a key tool for addressing the tyranny of
choice
• More media consumption time will shift to multi-media
devices (tablets, smartphones, laptops) leaving DAB
devices vulnerable to obsolescence
• Interactive car dashboards will be a threat, but also a
great opportunity (lean back experiences are safer in the
car)
• The importance of DJs and spoken word content will still
be key, but contexts will have changed

13. Conclusions
www.midiaconsulting.com – Mark Mulligan - September 2013
• Media consumption is rapidly shifting online and onto
mobile devices
• DAB is a great digital ‘lock-in’ for the home
• New emerging digital entertainment services are blurring
consumers’ perceptions of what constitutes radio
• Tablets and smartphones help break down the distinctions
between different media formats
• Radio has a big future ahead of it, but that doesn’t
necessarily mean a big future for broadcasters
• However the big change will be generational rather than
immediate

14. Contact: Mark Mulligan
Phone: +44 (0) 780 11 66 712
Email: mark@midiaconsulting.com
Web: http://www.midiaconsulting.com
Blog: http://musicindustryblog.wordpress.com
Twitter: @mark_mulligan
www.midiaconsulting.com – Mark Mulligan - May 2013