Sunday, 13 December 2009

Internet radio: denigrate it, ignore it, marginalise it … consumers will still listen

It was a surprise to find that the entire front page of the most recent issue of the World DMB Forum’s global newsletter (‘Eureka!’) was filled with an article that did not extol the virtues of the DAB/DMB platform, but instead tackled the online radio platform and drew the conclusion that the internet “will NOT replace traditional broadcasting”. The article, entitled “The Future Of Radio”, sought to debunk the assertion that “the internet is the future of radio”.

It stated that the BBC iPlayer “allows the UK public to access almost all of its radio and TV programmes broadcast during the previous seven days”. This is inaccurate. The iPlayer offers nothing like “almost all” the BBC’s radio and TV output. Indeed, for some of the BBC’s radio and TV networks, the selection of content remains remarkably thin (mostly due to rights issues).

The article continued: “Given the outstanding success of the BBC’s iPlayer, it is surprising to learn from RAJAR’s latest audience figures that ‘radio via the Internet’ (in all its forms: live streaming; on-demand services and podcasting) accounts for only 2.2% of radio listening in the UK.

This is untrue. The RAJAR 2.2% share figure ONLY includes simulcast live streams of the BBC and UK commercial broadcasters. It does not include on-demand services; it does not include podcasts; it does not include listening to online radio services such as Last.fm, Spotify and Rhapsody; and it does not include listening to audio from overseas broadcasters. There is a detailed section on the RAJAR web site that explains these facts. RAJAR has never claimed that its data for ‘internet’ listening includes anything other than simulcast live streams of BBC and UK commercial radio stations.

The article then drew the conclusion: “Taking these differences in penetration into account shows that DAB listening in the UK is 10 times more popular than listening via digital TV or via the internet.” However, it is unclear what the phrase “10 times more popular” is trying to imply. Is that ‘10 times more listening’? Or maybe ‘10 times more reach’?

Interestingly, exploring the latter metric, RAJAR’s own research (as part of its MIDAS survey, rather than the main diary survey) found in December 2008 that the weekly reach of all internet-delivered radio content in the UK was 14%, compared to the DAB platform’s weekly reach of 17.8% during the same quarter (see graph below). Ten times more popular? The platforms were almost neck-and-neck in the ‘reach’ metric. I wrote about this research a year ago. It is the closest we have for now to a like-for-like comparison that includes all forms of audio delivered by the internet.


  
The most recent reach data for the internet platform in the above graph derives from Q3 2008 because RAJAR has not publicly released comparative data derived from its two subsequent MIDAS surveys (which are now only available on subscription).

RAJAR was keen to stress in its press release accompanying this week’s latest MIDAS 5 survey that:

74% of those Listen Again [audio on-demand] listeners said the service has no impact on the amount of live radio to which they listen, while half said they are now listening to radio programmes to which they did not listen previously”.

Somehow, the Daily Mail managed to mangle this factual statement into something that, yet again, portrayed the internet platform as an aggressor against DAB:

Rajar says the figures do not mean people are abandoning traditional or DAB radio sets but that more Britons are trying and using online stations as well.”


  
The problem the radio industry faces with the RAJAR audience metric is that it cannot have its cake and eat it. Either it chooses:

• to restrict RAJAR to measuring ‘traditional’, live radio and accepts that, as a result, the data will inevitably show that listening to ‘traditional’ radio is in continuing decline (which is RAJAR today, see graph above); or

• to expand the RAJAR metric to measure ‘audio’ consumption that includes on-demand and podcast content, as well as non-traditional radio such as Spotify and Last.fm, thus demonstrating that total listening is not at all in decline but, on the contrary, has been enhanced by audio content increasingly consumed via non-broadcast platforms and ‘on the go’.

For the BBC, Director of Audio & Music Tim Davie hinted at the last RadioCentre conference that he would be interested to see RAJAR extended to encompass time-shifted and downloaded audio, both of which account for an increasing proportion of BBC radio listening.

For its part, commercial radio has shown no interest in advocating such a re-definition of the RAJAR metric. Not only do its offerings of time-shifted and downloadable audio remain miniscule compared to the BBC, but it is locked into a strategy to maintain its ‘walled garden’. Understandably, it has no desire to demonstrate to the world that it is losing listening to competitors’ time-shifted audio and online ‘radio’. UK commercial radio has enjoyed a nice little over-the-air duopoly from 1973 until recently – best just to pretend that it remains one of only two games in town.

The paradox here is that commercial radio is busy presenting advertising agencies and potential advertisers with RAJAR data that only tell part of the story of how and what audio people are listening to in 2009. However, once their meetings with commercial radio people are over, those same advertisers and agencies will inevitably be busy booking advertising with all sorts of online media, including Last.fm and Spotify. They know precisely what opportunities are out there in the wide world beyond traditional broadcasting.

Simply ignoring new businesses that are competing for your listeners’ attentions is not going to make them go away. Sticking your head in the sand can only have the effect of devaluing RAJAR as a useful and accurate metric in the long term.

Remember King Canute.

3 comments:

DP said...

DAB propaganda is increasingly inaccurate, removed from reality.

Internet radio complements all terrestrial radio systems—adding location-shifting and time-shifting. Across device platforms. With ever improving quality. Allowing existing listener relationships to be maintained, and new ones to be developed. Without requiring substantial additional investment by providers or listeners. Leaving money for programming and content, including licensing.


The 13% for DAB radio is as measured by RAJAR for their subscribers. It is live listening on DAB radios--which includes FM (and now Internet) listening on DAB/FM/Internet receivers. Actual DAB listening is significantly less, quite likely substantially.

Non-subscribing stations—community, student, hospital, (pirate,) Internet-only, more than 100 commercial, and the rest-of-the-world are not included in the RAJAR cards and stickers offerings to diary keepers. Most of these stations are available as Internet radio; very few are available, listenable locally on DAB. These stations may be written-in, to some degree, but are seriously under-estimated in RAJARs 2% for (live) Internet radio.

And, listen later, podcasts, and personalized tracklists are not included at all. They further increase Internet radio significantly. RAJAR's separate MIDAS surveys shows them equal in total to live listening minutes:
Table 34: Average minutes in the last week for each type of internet listening activity
All Adults 15+
Base (000s): 50,344
Listen Live 16.0mins
Listen Again 9.4mins
POR 1.4mins
Podcasts 5.8mins

Total listening for Internet radio compared to DAB is now much closer to equal.


The costs of Internet radio streaming are now comparable with terrestrial radio distribution costs. Wholesale content delivery costs, for large scale, now go below $1.80/year/listener—20 hours/week at 128Kbps = 60GB/year. (Most BBC and Commercial is still at much lower rates; and video rates are ~10x greater, with much less user contact for interaction.)

Also, multicasting is in use and can handle substantial increases in Internet radio distribution now. A single stream transported to a neighborhood, with multiple streams delivered locally increases ISPs’ efficiency (and earnings).

Of course, FM can easily handle the bulk of the traffic for the next many years. Providing plenty of time for further Internet distribution increases and improvements.

Mandy said...

Grant,

The DRDB did not "mangle" anything. The cited quotation comes directly from the Daily Mail article.

Grant Goddard said...

Thanks, Mandy. You are correct. In the DRDB newsletter, the quotation had no quotation marks, so it appeared DRDB-crafted. I have corrected the text accordingly. Yours, Grant