Sunday, 14 August 2011

Growing DAB radio usage in the UK. Confused? You should be!

"Digital listening at an all-time high," shouted the headline of one online news story. Yes, it was the quarterly RAJAR radio ratings, offering opportunities for some journalists to pitch their stories just about any which way they wanted. The opening sentence of this particular report said:

“The digital revolution shows no signs of slowing down, and not even the radio airwaves are set to maintain their analogue tradition, as a new [RAJAR] study suggests.”

Hardly. This news story was interesting because it achieved two simultaneous feats of confusion:
• ‘DAB radio’ and ‘digital radio’ are two different things. ‘DAB’ is the platform on which the UK radio industry bet the farm in the 1990s. ‘Digital radio’ is radio received on any platform that is not analogue (AM/FM) and includes the internet, smartphones, digital TV … and DAB
• The fact that DAB listening is growing does not necessarily mean that it is replacing analogue listening at a rapid rate of attrition. Why? Because DAB listening, even after 12 years, is still at a remarkably low level.

These confusions are not accidental. At every opportunity, statements made by Digital Radio UK have sought to confuse the public by referring to ‘digital radio’ as if it means precisely the same as ‘DAB radio.’

A look at the graphs below of the latest RAJAR data illustrate clearly that the “analogue tradition” in radio remains so dominant that the real question to be asked is: how come DAB usage is still so low after so many years and after so much money has been invested in content, transmission systems and marketing?

The adage ‘a picture speaks a thousand words’ has never been more true than with DAB/digital radio usage. The four graphs above – all taken from the industry’s latest RAJAR data – say it all by showing:
• how little impact DAB radio has had on analogue radio usage in the UK
• how slow the rate of growth is of DAB receiver take-up and of digital radio station listening.

Far from radio losing its “analogue tradition,” as the news article asserted, the old FM/AM platforms look, from these data, to be as strong as ever in the market.

One hint that some digital radio stations on the DAB platform could be on their way out is the BBC’s latest decision to aggregate listening for Radio 4 and Radio 4 Extra in RAJAR. It had been doing this from the outset for Five Live and Five Live Sports Extra, on the premise that ‘Sports Extra’ was only a part-time broadcast station.

I would not be at all surprised to see the BBC:
• similarly aggregate Radio 2 listening with 6 Music
• similarly aggregate Radio 1 listening with 1Xtra
• downgrade its digital radio stations from full-time DAB broadcast stations to online, on-demand ‘extra content’ available via RadioPlayer, iPlayer and applications.

The problem with national broadcast BBC radio stations, whether analogue or DAB, is that the BBC Charter insists they must be made available universally to all Licence Fee payers. Given the huge cost of extending the BBC’s national DAB transmission multiplex to near-universal coverage equivalent to FM radio, particularly at a time when the BBC is having to cut budgets massively, it would be more sensible to downgrade ‘1Xtra’, ‘2Xtra’ and ‘4Xtra’ to ‘red button’ status whereby they offer additional content on a part-time basis. The consumer would access these Extra 'stations' via a complementary platform (IP) rather than the BBC having to shoulder the financial burden of programming them as 24-hour broadcast entities.

It would prove a convenient solution for the BBC. As it found with 6 Music last year, public controversy surrounds any decision to close a radio station, however small its audience in absolute terms. Alternatively, by pursuing the 'Extra' route, the digital stations can be re-branded, re-purposed and re-platformed away from expensive, fixed-cost DAB and towards IP, where the cost of delivery varies proportionately with the number of people using it. What better way to deliver value for money to Licence Fee payers? And what better way not to face public wrath for 'closing' a digital radio station.

As BBC Radio 2 DJ Steve Wright said on today's Broadcasting House show:
"Maybe full digitisation [of radio from FM/AM to DAB] may well take thirty years …"

As the graphs above demonstrate, there IS slow growth in DAB usage, but the rate is insufficient to replace analogue radio as the dominant consumer platform any time soon. It's time for BBC strategy to catch up with that reality.

Saturday, 6 August 2011

UK DAB radio receiver sales fell in 2009 and 2010, but "digital radio sales have held up - they are flat" insists Mr Switchover

For an organisation that has been charged with marketing DAB radio to the British public, Digital Radio UK has managed to remain remarkably invisible during 2011. This alone made the appearance of Digital Radio UK’s chief executive on BBC Radio 4’s ‘You & Yours’ show notable. The fact that nothing new was said was hardly surprising – there is nothing new to say about DAB.

Out in the real world, as opposed to the imaginary world inhabited by Digital Radio UK, the notion that ‘DAB radio’ will replace AM/FM radio is already a dead duck. The only believers still worshipping ‘DAB’ seem to be Digital Radio UK, RadioCentre, Ofcom and government civil servants.

The evidence is transparent. The number of DAB radio receivers sold in the UK fell year-on-year in both 2009 and 2010 (by 6% and 2% respectively). These data are collected by GfK and supplied to Digital Radio UK. These numbers, together with a nice colour graph, were distributed at last month’s RadioCentre members’ get-together. These are industry data of which Digital Radio UK is perfectly aware.

Yet, Digital Radio UK’s chief executive insisted in this interview on national radio that “digital radio sales have actually held up – they are flat year-on-year.” This is untrue. ‘Down’ is not ‘flat.’ ‘Down’ is ‘down.’ DAB radio receiver sales peaked in 2008 and have been falling since. DAB receiver sales in 2010 were 8% below that 2008 peak. That is clearly not ‘flat.’

I wonder how it is that:
• The chief executive of a high-profile marketing organisation can appear on Radio 4 (audience: 11m adults per week) and flatly state something that he must know not to be true?
• The board of Digital Radio UK does not haul him in and remind him that his job description is to ‘persuade’ consumers of the value of DAB, not deceive them?
• A substantial proportion of this organisation’s funding is derived from the BBC Licence Fee, so the public is effectively paying for an executive to tell them untruths about consumer take-up of DAB radio?

You & Yours
BBC Radio 4
29 July 2011 @ 1200

Ford Ennals, chief executive, Digital Radio UK [FE]
Wiiliam Rogers, chief executive, UKRD [WR]

Q: Are you not disappointed with the lack of a rise in [DAB] radio sales?

FE: No, I think what the Ofcom report confirms is the solid progress that is being made. We see growth in overall digital listening, we see growth in terms of the number of homes that have a digital radio receiver in there. So, 40% of all homes now have a DAB receiver in them, we know that 47% of all listeners are listening to digital radio every week, and we have seen growth in digital listening. So I think progress is being made. I think we are in a difficult sales period for overall retailers and we have seen a decline in overall consumer electronics sales. Digital radio sales have actually held up – they are flat year-on-year. We have now sold 13 million DAB digital radios, but the key thing, just lastly, to remember is that you can receive digital radio via digital television, via a computer or, indeed, via a smartphone and many, many households and consumers have those.

Q: William Rogers, are you surprised by the lack of increase in interest in digital radio?

WR: No, not in the least. And I think we have to remember that Ford, with respect to him, is being a little disingenuous because, of course, the switchover is about people being forced to move way from analogue and onto DAB. So that’s the issue we need to focus on. And what this report highlights, and I’m personally delighted to see it, is it really does shine a light on the shambles that is this proposed DAB migration.

Q: But things aren’t that bad. There are increases in radio usage, as Ford has just indicated.

WR: Well, hang on a minute. The whole premise behind the switchover is that it will be, quote, consumer led. And the one thing we know from these statistics is that, whatever else it is, it’s not being consumer led. As your reporter quite rightly said earlier, of the eight-and-half million radio devices sold in the twelve-month period we are talking about, four out of five of them did not have a DAB receiver capacity. And, more interestingly, of those people who were asked whether they were likely to buy a DAB set at any time in the next twelve months, four out of five of them said they were not likely to. So the consumer is making it very clear what they want and, after eleven years, it’s time this thing was put to bed.

Q: Ford Ennals, one of the things that we constantly hear from listeners is the whole issue of reception. That’s really what, I think, the message is that we get from people. That is what they are worried about. Whether they approve or not [of DAB], what they say is an awful lot of people can’t get them [DAB radio signals] and, if they can get them, they can’t get them consistently.

FE: Well, I think, where the industry and the broadcasters are absolutely unified and agreed is that digital is the future of radio in the UK. And I think it’s just a matter of the timetable and the transition path for that. One of the big issues is, as you have said, is about coverage and about the ability of everyone to get a strong [DAB] signal. Now, what Ofcom have done is developed a plan to extend coverage, both of the local services and the national services, so that people can receive those services and get more confidence. But there is a direct parallel here with TV and digital television – I ran the TV switchover programme – and, back in 2006, the majority of TV sales were analogue and only 75% of the population could get digital television. Now, what happened over the next few years is we saw a very swift transition and we saw transmitters built out that so everyone could get digital TV. We’ll see the same on radio.

Q: What about that, William? We don’t jump ‘til we have to. We don’t buy ‘til we have to.

WR: Look, look. Let’s be clear about this. Ford Ennals is paid to market the DAB switchover, so I understand why he has to say what he has to say, because the message from this report is clearly embarrassing for him to make a case which clearly doesn’t exist. There are a number of points we have to remember. First of all, the comparison with TV switchover is plainly an absurd point to make. They are not remotely, in any way shape or form, similar. And people are choosing not to endorse DAB as an alternative [to FM/AM]. The critical thing we have to understand here is three elements. First of all, ….

Q: You’ll have to confine yourself to one because we are really tight for time.

WR: Okay, the fundamental problem with this whole process is that you cannot migrate an entire sector if the [DAB] platform you have chosen does not have the capacity to allow you to do so. And there are scores of radio stations in this country who will be denied the opportunity to move to a DAB platform, because the choice was wrong in the first place.

Q: A ten-second response.

FE: Just finally. People love digital radio. We’ve seen it with [BBC] 6 Music and we saw the campaign to save 6 Music. We’ve seen it with the response to Radio 4 Extra. And they’ll continue to enjoy it in the future.

Q: I’m sure our postbag and our e-mails will be as big as usual. William Rogers and Ford Ennals, thank you both very much indeed.

Point of information:
Ford Ennals was chief executive of Digital UK, the TV switchover marketing organisation, from April 2005. He announced his departure in November 2007, the same month that the first UK region entirely switched off analogue television broadcasts.

Thursday, 4 August 2011

UK listening growth demonstrates radio's strengths in a multi-tasking world

The latest RAJAR ratings data for Q2 2011 demonstrate the continuing strength of the radio medium in recession Britain. Maybe if your TV or mobile subscriptions are having to be pruned, you turn to radio instead. In times of austerity, one of radio’s greatest attributes is that it appears to consumers to be available ‘free’ at the point-of-use.

‘All radio’ listening (1,076m hours per week) is at its highest since 2003. Adult weekly reach is 91.7%. Each listener spends an average 22.6 hours per week with ‘radio.’ These are impressive numbers. In this respect, it is important to remind ourselves that the RAJAR definition of ‘radio’ excludes:
• ‘listen again’ consumption of broadcast radio (online catch-ups of ‘The Archers’, for example)
• all podcasts
• listening to pure online radio stations
• listening to online music streaming services or personalised online radio (, Spotify, etc).

If these additional ‘radio’ consumption sources could somehow be added to the RAJAR data, it looks likely that, using a wider definition, ‘radio’ would be performing at an all-time high. This is not at all surprising in our time-precious, multi-tasking world. Radio proves the perfect aural accompaniment to online social activities, whereas it is nigh impossible to watch television or read a newspaper at the same time as you browse the internet. Radio is a secondary medium – it never monopolises your time.

Commercial radio has benefited from this uplift in total radio listening. Total hours listened to commercial radio (470m per week) have risen from what is beginning to look like a nadir in early 2010.

During the last two quarters, commercial radio’s adult weekly reach has jumped above the 65% threshold (65.5% in Q2 2011) that had not been breached since 2003.

In absolute terms, commercial radio’s adult weekly reach has almost caught up with the UK population growth experienced since 1999, rising to 34m in Q2 2011, marginally below its all-time high the previous quarter.

The remaining stumbling block for commercial radio is that its average hours consumed per listener remain stubbornly low (13.8 in Q2 2011). As noted previously, young people are spending less time with radio [see blog]. Commercial radio's audence is considerably more youth-orientated than BBC radio, which is why the average length of time for all adults listening to commercial radio remains in the doldrums.

With all this good news for the commercial radio sector, you might imagine that its share of total radio listening had started gaining in leaps and bounds at the expense of the BBC. Unfortunately, this is not the case. The BBC has benefited just as much as commercial radio has from the overall increases in radio listening. As a result, everyone’s volumes are ‘up’ and the share of commercial radio versus BBC radio has remained relatively constant. In Q2 2011, commercial radio’s 43.7% share was certainly an improvement on the situation in 2008, when it had looked as if the 40% barrier might be plumbed for the first time.

In fact, the BBC’s sustained strength in radio is becoming increasingly understated as more and more ‘radio’ listening is attributable to ‘listen again’ on-demand usage and podcasts. The BBC dominates the content available on both these platforms, whilst commercial radio’s offerings remain relatively sparse. At present, neither platform is measured within RAJAR. If they were, commercial radio’s share would undoubtedly be diminished further.

At present, this status quo (using RAJAR’s anachronistic definition of ‘radio’ as purely live and broadcast) suits both parties. The BBC does not wish to be seen to be even more dominant than it already is (54.0% of radio listening in Q2 2011). Commercial radio does not wish to be seen to be weaker than it already is (43.7%) in comparison to the BBC.

And who pays for RAJAR? The BBC and commercial radio. So we are stuck with an old fashioned metric that does not measure radio consumption in the 21st century sense of what we now call ‘radio,’ but which keeps both its paymasters happy … particularly as neither the BBC nor commercial radio would currently wish to demonstrate publicly the increasing popularity of online ‘radio’ consumption – which remains the biggest long-term external threat to them both.