BBC radio: endangering commercial radio's 'heartland audience'

Dear David Liddiment

I was interested to see your article in The Guardian, on behalf of the BBC Trust, defending Radio Two from accusations made by the commercial radio sector that the station has deliberately sought a younger audience. You say:

“What about the challenge that Radio 2 is getting younger? We found that Radio 2’s under-35 audience did grow significantly between 1999/00 and 2004/5 (albeit from a low base). However, over the past five years, the age profile of the station has remained stable and there’s been no increase in reach to under-35s.”

Your analysis here focuses on two specific metrics – under 35’s and Radio 2’s ‘reach’ – whereas the important issues raised by commercial radio rightly concentrate on:
• Commercial radio’s ‘heartland audience’ of 15 to 44 year olds, which it has pursued for many years as a result of advertiser demand to reach this segment of the population;
• ‘Share of listening’ as the appropriate metric because there is a direct correlation between this figure (how many hours are listened to commercial radio) and how much revenue the sector generates.

The graph below, taken from RAJAR data, shows the ‘share of listening’ attracted by BBC radio stations amongst 15-44 year olds since 1999.

It is evident that the listening share of most BBC stations has remained relatively static over this period. The exception is Radio Two, whose share of listening amongst 15-44 year olds has more than doubled from 4.9% to 10.5% over the last decade. It is true that this growth has started to level out in recent years, as your article asserts, but there is no denying that the damage has already been done.

The graph shows clearly that this significant increase in listening has not been achieved by migration from competing BBC radio services to Radio 2. On the contrary, the BBC’s overall share of listening amongst 15-44 year olds has increased from 36.5% to 44.7% during the last decade and, most importantly for commercial radio, is continuing to grow year-on-year.

The graph below demonstrates clearly that it is commercial radio which has lost listening share, from both its local and national stations, that has migrated to the BBC. As a result, commercial radio’s listening share amongst 15-44 year olds has fallen from 61.7% to 52.1% over the last decade.

 
The danger for the commercial radio sector is that, if its market share falls below 50%, potential advertisers might no longer consider radio to be the ‘powerhouse’ delivery platform amongst 15-44 year olds that it used to be. The impact will not simply be a proportional loss in advertising revenues, but a significant loss of confidence in radio as an advertising medium to reach 15-44 year olds.

This is why, inside the BBC and Radio Two, a change in strategic policy might look as if it only results in an increase in BBC market share of a percentage point or two. For the commercial sector, not only does that single percentage point lead directly to a proportional loss of revenue but, sustained in the longer term, it can potentially undermine the medium’s ability to convince advertisers to use radio rather than, say, digital TV or the internet.

This is why the promise you make that “Radio 2 listeners won’t get any younger” is little comfort to a sector that has already been damaged by BBC strategic policies and which is continuing to lose market share year-on-year amongst its ‘heartland audience’ to BBC radio as a whole.

Of course, some of this listening loss can be attributed to commercial radio’s own competitive (in)ability to compete with the BBC – I would be first in line to argue that case – but unless its downward spiral of diminishing listening and diminishing revenues can be reversed, commercial radio could be decimated to the point where it can no longer be a financially viable business.

I write to you not to criticise Radio Two, which is a remarkable station, nor to apologise for the commercial radio sector, which has to shoulder considerable blame for losing touch with its audience. I write to illustrate that the industry’s own data clearly shows the BBC continuing to eat away at commercial radio’s ‘heartland audience’, and I write so that the BBC Trust might understand the consequences if the migration of radio listening to the BBC continues at its current rate.

Yours,
Grant Goddard

30 November 2009