Monday, 1 June 2009

UK Commercial Radio Revenues Q1 2009

Commercial radio revenue figures for 2009’s first quarter have been released. There is no good news.

Q1 2009 DATA
£128.6m total revenues – lowest since Q3 1999
£36.8m local revenues – lowest since previous quarter, then Q1 2002
£68.4m national revenues – lowest since previous quarter, then Q1 1999
£23.4m branded content – lowest since Q3 1999

Total revenues – down 19.5%
Local revenues – down 6.4%
National revenues – down 28.8%
Branded content – down 4.1%

Total revenues – down 0.3%
Local revenues – up 1.5%
National revenues – up 4.2%
Branded content – down 13.7%

Commercial radio continues to suffer not only from the advertising downturn, not only from the migration of marketing spend away from traditional media towards online, but from a continuing long-term decline in listening to commercial radio content (see earlier
post on Q1 2009 RAJAR results).

The commercial radio industry has not been under so much revenue pressure since the 1991 recession. Then, local advertising contributed 51% of total sector revenues, whereas now it is only 29%. The industry’s increasing reliance on national advertisers (now 53% of the total) has left it particularly vulnerable, much more so now than in 1991, simply because national advertisers have many more media options to choose from than local advertisers.

The most obvious symptom of this is the closure of more local commercial stations. Last week alone, Radio Hampshire’s FM stations in Southampton and Winchester closed, and Stafford digital station Focal Radio closed. Unfortunately, more closures such as these are likely to follow, both of local commercial stations and newer digital stations. Unlike car plants or hospitals, commercial radio stations are not viewed as a vote winner by politicians, making any kind of government bale-out most unlikely.

As a result, the solution to commercial radio’s problems can only come from within the industry itself. It is wholly unproductive to argue to cut off the BBC’s balls, or to use the Licence Fee to improve commercial radio’s DAB infrastructure, or to expect government to subsidise local news, or to insist that radio licences' expiry dates be extended. Commercial radio is a business (admittedly, fettered by regulation). If you cannot make that business work for you, then get out of the business.

If I enter a game of poker, I know what the written rules are before I start playing. If I then suffer a losing streak, I cannot expect the rules suddenly to be changed to alleviate my bad luck or poor judgement. Either I play the game or I throw in my hand and quit.

The commercial radio industry desperately needs to get on with the business of radio. Perhaps then, at these numerous radio industry conferences, we could sit through some presentations about what people had actually successfully done to their businesses, rather than more speeches about what should be done, could be done or, most infuriatingly, what someone else (usually the BBC, the government, Ofcom, Lord Carter) should do to help the industry.

Radio – your future is in your own hands.

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