Wednesday, 10 February 2010

Digital radio stations: listeners abandon ship

The latest RAJAR radio audience data demonstrated one thing clearly: the UK radio industry’s strategy for its digital stations is in tatters. Audiences for digital radio fell off a cliff during the last quarter of 2009. This did not appear to be the result of any specific strategy shift (no station closures, only one minor format change) but more the result of increasing public malaise about the whole DAB platform and the radio content that is presently being offered on it (plus a little Q4 seasonality) . The figures speak for themselves.

Total listening to digital radio stations is back down to the level it achieved in 2007, following a period of sustained growth between 2000 and 2007. Far from moving towards some kind of exponential growth spurt as the industry had expected, total listening now seems to have plateau-ed. It appears that market saturation has already been reached for much of the content presently available on digital radio platforms, considerably earlier than had been anticipated, and at a level of listening that cannot justify these stations’ existences for their commercial or BBC owners.

In the commercial sector, only Planet Rock has maintained its momentum, probably a reflection of its commitment to offering its listeners genuinely unique content. Elsewhere, the jukebox music stations have suffered massive falls in listening, possibly a result of their ease of substitution by online offerings such as Spotify and, and of owner Bauer’s policy to curb investment in digital radio broadcast platforms and content.

Commercial radio has talked the digital talk for years about striving to make DAB a successful platform, vaguely promising new digital radio ‘content’ that it has still not delivered. Instead, it has spent the last few years cutting costs, consolidating, lobbying the government, complaining about the BBC, closing its digital stations and contracting out its DAB capacity to marginalised broadcasters (religious, ethnic, government-funded and listener-supported stations) that will never attract mainstream audiences to the platform (and whose listening is not even measured in the RAJAR audience survey).

From the listener’s perspective, the only thing that has happened to the DAB platform in recent years is the disappearance of commercial digital stations such as OneWord, TheJazz, Core, Capital Life and Virgin Radio Groove. For the average consumer, the arrival of Traffic Radio, Premier Christian Radio or British Forces Broadcasting Service are hardly replacements.

A report commissioned by RadioCentre from Ingenious Consulting in January 2009 concluded:

“Commercial radio is now at a crossroads with respect to DAB. It needs either to accept that the commercial challenges of DAB are insuperable and retreat from it – such a retreat, because of contractual and regulatory commitments, would be slow and painful; or strongly drive to digital.”

In the year since this report was prepared, commercial radio has done neither. Instead, it has spent a small fortune on parliamentary lobbying, not one iota of which has had a direct impact on 10 million increasingly baffled DAB radio receiver owners. These latest RAJAR data convey their clear message that content is their only concern.

For the BBC, the problem is somewhat similar. With the exception of Radio 7, listening to its digital radio stations remains unimpressive, despite them benefiting from massive BBC cross-promotion over many years. Some stations are outright disasters – Asian Network is listened to less now than it was almost seven years ago, when only 158,000 DAB radios had been sold. Some stations are simply not suited to the DAB platform – 1Xtra targets a youth audience who listen to a lot of radio online and via digital TV, but who have little interest in DAB (particularly as DAB is not available in mobile phones). Some stations will become redundant in an increasingly on-demand world – Radio 7 would eventually be little more than a shopfront for the huge pick’n’mix BBC radio archive to be made available to consumers online.

For the BBC, it is becoming increasingly hard to justify spending, for example, £12.1m per annum on the Asian Network when its peak audience nationally is only 31,000 adults. Broadcast platforms such as FM attract huge audiences for a fixed cost, making them the most efficient distribution system for mass market live content. As a result, Radio 1 costs us only 0.6p per listener hour. By comparison, the Asian Network is costing 6.9p per listener hour, probably making it more expensive to ‘broadcast’ than to send each listener a weekly e-mail attaching the five hours of Asian Network shows they enjoy.

The BBC should still be congratulated for creating new digital radio services in 2002 that attempted to fill very specific gaps in the market which commercial radio was unlikely to ever find commercially attractive. This is precisely why we value a public broadcaster in the UK. However, the BBC digital radio strategy over the last decade has suffered from:
•   The BBC’s evident inability to successfully execute the launch of genuinely creative, innovative radio channels that connect with listeners (GLR, the ‘new’ Radio 1, the original Radio 5)
•   The BBC pre-occupation with constantly creating new ‘broadcast channels’ when most niche content is more suited to narrowcasting and delivery to its audience via IP (live, on-demand or downloaded).

For the UK radio industry, its digital ‘moment of truth’ has belatedly arrived. A new strategy now has to be adopted which does not continue to raise the DAB platform to the level of a ‘god’ that has to be worshipped above all others. The future of radio is inevitably multiple-platform and the industry’s focus has to be returned to producing content, rather than trying to control the platforms on which that content is carried.

I suspect that Tim Davie, director of BBC Audio & Music, will eventually lead these winds of change, following in the wake of director general Mark Thompson’s pronouncements at the end of this month as to where the internal financial axe will fall. Where the BBC leads, commercial radio will inevitably (have to) follow.

The future digital radio strategy is likely to be ‘horses for courses’. Rather than all radio content being delivered via all available platforms, it will in future be delivered only where, how and when it is most demanded by listeners. Our economic times make this mandatory. The DAB platform’s mass market failure will make it necessary.


Star Wars Fan said...

Grant you use the latest listening figures to show DAB is ailing, however the graph shows it is down to The Hits and Smash Hits losing a lot of listeners, Smash Hits was removed from DAB a long time ago and The Hits is only on London DAB, however the Guardian did it's research better and said it's because The Hits and Smash Hits radio were removed from the Sky platform!
However the Sky platform is not failing, but it could be those listening on Sky might have moved to the equivelent The Hits (now 4music) and Smash Hits TV stations which are still there!
There always has been confusion in Rajar about if the The Hits and Smash Hits figures were for TV or radio and perhaps is now being corrected? This must why the listening figures for DTV radio have reduced. Also the radio EPG menu is less prominant on the new Sky+ HD boxes

DAB has been steadily growing over the last few quarters, including the last quarter, perhaps slower than it should, and this was not shown in your blog!
Live internet radio has potential but still only has a fraction of listeners compared to DAB and growth was zero last quarter!

Also the loss of listeners to the BBC Asian network does not mean DAB has failed, they might have moved to Sunrise or Panjab on DAB instead!

TimF said...

I feel that the DAB audience will continue to plateau until more investment is made in the transmitter network. Most people who are likely to be interested in DAB will have tried it already & many will have found that they just do not have good, if any, reception at home. How many new transmitters are being launched each year now?

It may also help if the BBC stations were a bit more interesting, I had great hopes for 6 music but its style bores the pants off me.

Oh, finally, any idea of the comparative cost per listener of Asian network and BBC Radio 3? Just curious.

Anonymous said...

I hate DAB. The radio is expensive, batteries last only a few hours compared to weeks/months in my analogue radio, reception is rubbish with lots of pops and crackles and periods of silence. There is nothing there for me.

Robin Burgess said...

You must be joking!

This is RAJAR data, Rajar can bearly estimate radio listening accurately, let alone platform data per fifteen minutes.

If you want to see how much DAB listening is going on stand in a John Lewis or Curreys on a Saturday, they are selling 100,000s and go to people homes and look at their radios.

Or you could just grow up and move on to a fresh topic that really matters, like revenue, investment in content/talent/training and BBC wasteage & over funding.

Grant, you are losing credibility with this mission of yours..

RMilner said...

I love my DAB when listening to BBC stations. The commercial stations have always had a poor signal strength meaning they often had such bad reception I could not listen to them. Which was a pity as there were several I like.

Since I line in west London I expect I get better reception than a lot of people.

Nosher said...

I would agree that infrastructure investment may well be the most significant factor holding DAB back now (and I don't buy the quality issue, per se, after all AM didn't exactly stunt the growth of analogue radio).

In mid-Suffolk, Classic FM on the National One multiplex is nice and strong, but 6 Music (on BBC National) often disappears when driving through villages and towns - exactly where DAB's potential listeners live, and it seems to be getting worse. DAB only needs to be reasonable quality but more-or-less ubiquitous to guarantee that when people try it out it works - then at least they might stick with it if the content appeals (and for me, 6 Music most definitely fulfills that criterion).

Nosher said...

Also, you should be careful reading in too much to one particular period in the RAJAR graphs - you could have chosen about seven different points in that data where - without knowing what was coming next - you could make the assumption that "listening has fallen off a cliff", only for the graph to move upwards in the very next period.

Anonymous said...

Do you have any data on reception quality? Here in Belfast, we get complete signal drop-outs overnight for BBC Radio Ulster, that no technicians notice or fix for hours - then it happens again the next night. It gives the impression they are not taking DAB signal quality seriously.

Stephen said...

I've just bought first DAB radio. Fortunately I live in a good reception area, but only the BBC and Planet Rock are listenable. As a format it has promise, but it needs investment. However, the dross of commercial radio turns me off. Radio 2, 4 and Planet Rock are the best, by far. The question is can DAB challenge Internet based services, I suspect not.

BTW, where were the listening figures for Radio 2 and 4? Or did these not fit your arguement?

Richard Gadsden said...

I like DAB - I get decent reception on Radio 5, instead of Medium Wave.

Plus the cricket is on 5LSX, which means I don't have to insist on getting Long Wave on every radio

Anonymous said...

One of the reasons I got a DAB radio was to be able to listen to stations that weren't available in my area (Yorkshire) on FM (namely XFM and BBC 6 Music and some others). And it was great for 6-9 months, and then the signal strength on the comercial stations I liked dropped off a cliff and they became unlistenable. The BBC stations are still fine though.

DAB+ would have been nice (potentially)- but DAB is just *horrible* under low signal strength.

And shoving several low-bandwidth, over-compressed clones pumping out exactly the same garbage probably doesn't help them.

Anonymous said...

DAB has to compete with "free". No wonder it's doing badly. I would suspect that most people who have DAB radios were either given them as presents, or bought them as replacements for dead AM/FM radios. I'd be surprised if many people, leaving out the early adopters - who simply buy things because they're new, bought them specifically to listen to content that is only tranmitted as DAB.
Most people just listen to "the radio". They find a station they like and settle on that (or settle for the least bad alternative). Therefore there's little or no incentive to eschew a perfectly good FM radio for a new DAB one, unless you have some specific programme content you think is worth the cost of the new radio. Remembering that your old one has already been paid for and is therefore free to continue using.
The question then becomes: what "killer app." could DAB invent (short of having all the FM stations shut down and the frequencies commandeered by the government for sale to other users) that would persuade the population to spend £50 a pop, just to listen to "the radio" when there are now so many other alternatives? Answer that and you'll make (or lose) a great deal of money.

Jabba the Cat said...

Why anyone would waste money on mediocrity of UK local DAB radio when you can listen to the world digitally via the internet and something like a Squeeze-box is beyond me...

Anonymous said...

I have a couple of DAB radios which are more or less permanently tuned to BBC Radio 4. FM reception is lousy where I live, on the fringe for three separate transmitters, none of which is consistently listenable, only DAB provides a decent signal.

I don't give a toss for any of the other stations on DAB.

Anonymous said...

Expanding on Nosher's point;
The RAJAR numbers are estimates (they survey a number of people over a certain time). There is a statistical error on this estimate which we are not told. Without any indication of their accuraracy, the numbers do not "speak for themselves" and one cannot meaningfully guess at trends.

fletch said...

Content is king! I wouldn't have a DAB radio if it weren't for six music.

Anonymous said...

amen - 6music alone makes DAB worth putting up with. there's hardly anywhere else you can hear new music these days (as in a series of interesting new records linked by someone who knows the territory and has taste... such an old-fashioned concept).

Anonymous said...

It's about time someone took a pop at the commercial radio companies. Their problem is that they had an easy business model for years, so never really had to try to do anything very interesting to attract their local commercial monopoly listeners and advertisers. Now that they have to compete with so many alternatives (including via the internet) they whinge that their fat profit model is now more (sounds familiar? just like those music labels who ripped us off with £3.99 CD singles!). It's a shame Channel 4's radio efforts didn't take off - particularly as they included genuine innovation in speech (i.e. not just serious minded stuff or endless bland phone-ins). Yes, reception and in-car needs to improve, but anyone who's tried to use wi-fi to listen to internet radio knows that DAB still has legs for a few years as a more robust alternative (the majority of the population still has to put up with indifferent home broadband reliability and download caps). Commercial radio should have been given powerful national station opportunities sooner, but would they have really innovated? Meantime, the BBC is doing an ok job at promoting DAB, but some if its remit is mixed (eg Radio 1 doing listener request jukebox programmes is hardly public service, and I am no advocate of nicher public broadcasting). The big media companies have powerful brands out there, that could work across multi-platform, and radio hardly requires the huge investment in delivering the product that other media and technology companies do - they just need some old-fashioned creativity and an acceptance that their fat cat years will not return. So here, here, content innovation should be kind. Commercial stations have only themselves to blame, unless they really think that offering the same blandness as the next man is the route to loyalty and profit (their current strategy - do the same, but a bit cheaper).

Anonymous said...

Interesting -- let me pick on a comment though. BBC's digital 'strategy' (I know using that word to describe what they are doing is a stretch!) is a mess mostly because of their GENERAL cluelessness. They drop analogue SW for the World Service, and try to replace a true BROADcast service with Internet delivery, and put a specialty language service serving 13000 people in some of the larger cities in the UK on a transmitter. This all makes no sense, but why should you expect it to. We're talking about Auntie Beeb here after all!

Anonymous said...

Radio 4. The only quality station.