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 (Last.fm, 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.

UK commercial radio sector revenues Q1 2011: local advertising hits 10-year low

Data published last week for 2011’s first quarter demonstrate that revenues of the UK commercial radio sector are still struggling to rebound from the previous two years’ ‘credit crunch.’

A large part of the problem is the coalition government’s swingeing cuts to its marketing budget since May 2010, which have afflicted commercial radio advertising much more significantly than other media [see blog]. Additionally, and very worryingly, in Q1 2011, revenues from local advertisers fell to their lowest level for a decade, even at a time when local radio might be thought to be making client gains from the decimation of the local newspaper industry.

As has been suggested here previously [see blog], the strategy of the largest commercial radio owner, Global Radio, to transform its local stations into ‘national’ brands would seem to be a recipe for disaster at a time when:
• the national advertising market for radio is shrinking so rapidly (down 34% in real terms between 2004 and 2010)
• the BBC continues to dominate the national radio marketplace with exceptionally well-funded, ubiquitous brands [see blog]
• Ofcom’s market research points to overwhelming demand from consumers for more local radio rather than more national radio [see chapter 4(d)]
• many local commercial radio offices have been closed just as local newspapers have closed in many local markets.

TOTAL UK COMMERCIAL RADIO REVENUES:
• Q1 2011: £126.9m (£137.9m in Q1 2010)
• Down 8.0% year-on-year
• First year-on-year decrease since Q3 2009

UK COMMERCIAL RADIO NATIONAL REVENUES:
• Q1 2011: £69.2m (£78.6m in Q1 2010)
• Down 12.0% year-on-year
• First year-on-year decrease since Q3 2009

UK COMMERCIAL RADIO LOCAL REVENUES:
• Q1 2011: £33.7m (£35.9m in Q1 2010)
• Down 6.1% year-on-year
• Lowest quarter since Q1 2001

Although the quarter-on-quarter trend during the last three years appears to be relatively flat, once the data is viewed in the longer term, it is apparent that the commercial radio sector has been unable to grow its revenues back to the peak achieved in 2004. Adjusted for inflation, the ‘real’ peak occurred in 2000 and, by 2010, commercial radio total revenues had fallen by 33%.

Following the impact of the ‘credit crunch,’ the subsequent blow to the sector caused by the government’s slashed expenditure on commercial radio advertising from its Central Office of Information [COI] has been catastrophic. COI spend on radio in the twelve months to March 2011 was down 80% year-on-year. In the year to March 2010, the COI had been the radio sector’s biggest advertiser by a factor of eight but, only one year later, it had been diminished to almost par with the second biggest radio spender, Autoglass.

In June 2011, the government confirmed that the COI will be axed altogether, offering no respite to the commercial radio sector. According to The Guardian:
“Instead the government intends to run advertising and marketing activity out of the Cabinet Office, hiring about 20 extra staff to complement existing communications teams.”

With local advertising revenues having hit a decade-low in Q1 2011, and national revenues having fallen 34% in real terms between 2004 and 2010, surely it should be time for commercial radio to ask itself:
• is the current local-station-turned-national-network policy the appropriate strategy for the current advertising market?
• is the current local-station-turned-national-network policy the appropriate strategy to satisfy radio listeners?
• how much longer can the ‘slash and burn’ strategy (as pursued by GWR, then by GCap, now by Global Radio) be applied to the commercial local radio industry before there is simply nothing left to cut?
• how much more shareholder value can be destroyed in commercial radio before revenues fall faster than costs can be cut?

A question I was asked by one senior radio executive last week was: how will all this commercial radio ‘slash and burn’ end? I wish I knew. Of one thing I am certain: it must eventually end in tears once the net book values of dozens of commercial radio licences have to be written down by millions of pounds in the accounts of their owners.

This process has already started tentatively:
• Global Radio valued its licences at £333m on 31 March 2010, after having swallowed a £54m ‘impairment’ write-down in 2008/9
• in 2009/10, the Guardian Media Group suffered an ‘impairment’ of its radio licences by £64m and now values them at £68m
• Times of India looks likely to have to take as little as £20m for Absolute Radio, a national station it had acquired for £53m only three years ago.
We have to anticipate more write-downs like these.

At some point, even millionaires must not enjoy watching as their radio assets are reduced to dust by shrinking audiences/revenues. But what can be done when those same owners have already starved the goose that had once laid the golden local commercial radio egg?

[Historical data from some previous quarters have been revised marginally at source]

When is a consultation not a consultation? When Ofcom consults about radio

Each of us has dozens of ‘consultations’ every day. You know the sort of thing. ‘I’m going to the corner shop – anything you want? A Kit-Kat? OK.’ However, if I came back with a cat rather than a chocolate bar, you would understandably be unhappy. That had not really been a consultation at all.

Ofcom’s consultations on radio are increasingly like that. Ofcom pretends it is going to listen. It doesn’t listen. And then it does whatever it wanted to do in the first place. Mmmm. Surely that is not really a consultation at all.

In June 2011, an Ofcom consultation asked six questions about a proposal by Now Digital (owned by radio transmission provider Arqiva) to extend the coverage of its Exeter and Torbay DAB multiplex to North Devon. One of those questions was:

“Q6. Do you consider that there any other grounds on which Ofcom should approve, or not approve, the request from Now Digital? Please explain the reasons for your view.”

However, Ofcom had apparently already decided that its ‘consultation’ was not a genuine consultation at all, when it explained:

“Before deciding whether to agree to Now Digital’s request, Ofcom is legally required to seek representations on the request from any interested parties. … Provided that the request meets the terms of the statute, the decision whether or not to agree to the request is at Ofcom’s discretion.”

So, Ofcom’s 21-page consultation document was really a complete waste of time and money. The decision was already made. And it would be even more of a waste of time and money for anyone to respond. But respond they did.

In July 2011, Ofcom admitted that, out of 234 responses submitted to its consultation, “the vast majority … were opposed to Now Digital’s request.”

Most objected on the grounds that:
• “agreement to the extension of the multiplex would enable the holder of an existing FM local commercial radio licence for Barnstaple to secure the renewal of that licence, precluding the advertisement of a new such licence (which otherwise would have been due to take place forthwith); and;
• the level of coverage of North Devon proposed by Now Digital was unsatisfactory as it would leave 30% of households in the area with no access to radio services in the event of a digital radio switchover.”

Did Ofcom care about this volume of public opposition? Not at all. Did it investigate why the share of listening to the merged Heart FM Devon had fallen dramatically to an all-time low last quarter (behind BBC Radio 2, BBC Radio 4, BBC Radio 1 and BBC Radio Devon) [RAJAR, 2011 Q1]? Apparently not. Ofcom explained:

“The [Ofcom Radio Licensing] Committee [RLC] noted the strong opposition to the fact that approval of Now Digital’s request would allow Lantern Radio Limited, the holder of the local [Heart] FM commercial radio licence for Barnstaple, to apply for a renewal of the licence and thereby preclude advertisement of a new licence. However, the RLC did not consider that this fact should preclude the granting of Now Digital’s request.”

And why not? Because Ofcom’s wholly unrealistic policy objective, for DAB to replace AM/FM radio, is still being doggedly pursued to the exclusion of any wider regulatory issues – consumer choice, market competition or the removal of barriers to sector entry. As well as to the exclusion of the majority of the 234 respondents to this consultation.

To put the same thing in Ofcom’s own weasel words: “What Now Digital Limited sought in its request is provided for in section 54A of the 1996 Act. Agreeing to the request would be consistent with the broad policy aims of that section. Namely, the extension and promotion of local DAB broadcasting with the consumer benefits of greater choice of services.” [emphasis added]

Now Digital promised to launch the first of three new DAB transmitters in North Devon within six months of Ofcom’s approval. And what about the remaining two? Now Digital promised these will be installed “six months after a positive decision in 2013 by Government regarding digital switchover”. Oh, so you mean ‘never.’

The ulterior objective of this proposal was that the promise to build a single new DAB transmitter in North Devon would enable Global Radio to automatically renew its existing FM licence in Barnstaple for a further eight years without a public contest, thus denying any potential new entrants. Ofcom simply rolled over and complied. And what did Ofcom suggest to the complainants who might not have felt that London-based Global Radio was offering them a genuinely local radio station in Heart FM? It stated:

“The RLC recognised the strength of feeling among many respondents to the consultation for there to be an opportunity for an alternative provider of a local radio service in North Devon to apply for a licence … Ofcom is always keen to facilitate new local radio services for listeners where such services are viable and therefore able to offer consumer benefits over the long term. To this end, the RLC noted that, in its response to the consultation, Arqiva stated that there is presently capacity for at least one further new station to be accommodated on the Exeter & Torbay local [DAB] radio multiplex.”

This is patronising rubbish. “Viable”? “Consumer benefits”? Can Ofcom please name any DAB-only radio station that is making an operating profit as a standalone business? No? Because there isn’t one. DAB radio has proven to be one massive financial black hole that has wasted approaching £1bn. Suggesting to consultation respondents that they start their own new local radio station on DAB is akin to Ofcom recommending these correspondents burn down their own houses.

All Ofcom has done is raise two fingers to the people of North Devon in this consultation. If I were Ofcom’s director of radio, Peter Davies, I would not consider booking a holiday in North Devon any time soon.

Unless Global were to return the favour by picking up the tab for his bodyguards?

GERMANY: "DAB [radio] remains a problem child"

On 2 May 2011, a panel convened at the Central Germany Media Conference in Leipzig to discuss the future of digital radio. The panellists were: Gerd Bauer from LMS, Erwin Linnenbach from Regiocast, Christophe Montague from NRJ International Operations and Willi Steul from Deutschlandradio.
The panel felt that one of the main problems around the planned (re-)launch of digital radio in Germany on 1 August 2011 was the lack of DAB+ capable radio receivers in the market. “The left shoe is there, but not the right one,” commented Erwin Linnenbach, who was concerned that it would be difficult to persuade consumers to buy a digital radio if they did not know what they would be able to receive on it.
Willi Steul said that he had had to visit three shops before he had found one that stocked a DAB+ radio. “An ordinary customer would not make that effort, but would have bought an FM radio from the first place,” he suggested. Deutschlandradio would save €12m per annum from being able to shut down its Long Wave and Medium Wave transmitters, said Steul. However, even if DAB+ were available nationwide, he did not believe that FM switch-off was an issue.
Christophe Montague suggested that, where there were already a wide range of FM radio stations, there was no need for new channels. This was the reason why it would prove so hard to launch digital radio in France. Whereas, in many parts of Germany, Montague said that it was a “radio desert.”
The panellists agreed that the biggest problem was the lack of DAB+ radios in shops. Linnenbach did not believe that this issue could be fixed by 1 August because there was not enough time. The objective had to be to make radio listeners understand the benefits offered by DAB+. If that succeeded, he believed the chances were good for a successful launch.
The panel proceedings were reported in the German press under sceptical headlines:
“DAB Plus before launch – an uncertain outlook for success,” said Business-on
“Media conference – success of DAB Plus not guaranteed,” said Digitalfernsehen
“Media conference – DAB remains a problem child,” said Rein-Hoeren
According to the latter publication, Erwin Linnenbach had said that the monopoly of transmission company Media Broadcast was the major obstacle to nationwide digital radio in Germany. He felt that Media Broadcast’s requirements did not offer a sensible business model to potential DAB+ broadcasters [see blog Dec 2010]. Christophe Montague agreed and said he had the impression that Media Broadcast would make the most out of the DAB tender process.
Heinz-Dieter Sommer, director of radio at Hessischen Rundfunks, said that economically viable conditions had to be created to enable commercial radio companies to participate in DAB+ alongside the public service broadcasters. “Otherwise,” he said, “in ten years time, FM will still not be switched off.”
Two British digital radio companies have committed financial support to the roll-out of national DAB+ in Germany in August 2011. This follows the slow-down of DAB radio receiver sales in the UK in 2009 and 2010 [see blog].
In December 2010, Frontier Silicon announced that, in order to persuade four commercial radio broadcasters in Germany to persevere with DAB+, it had promised them it would purchase an unspecified amount of their advertising airtime over the next four years [see blog].
Then, in March 2011, Pure Digital announced that it had forged “a strategic marketing partnership with Germany’s commercial radio stations in advance of the launch of the first nationwide digital radio multiplex.” It said that “the partnership and financial investment” it was providing would ensure that its digital radios would be “heavily promoted in various German media.”
Germany could be under the mistaken impression that DAB radio is already a roaring success in the UK market. It was reported in the German press last week:
“While listening in Germany is still dominated by analogue radio, the British have long joined the digital age. Figures from RAJAR have shown that, in Q1 2011, nearly 92% of the population have listened to digital radio, on average for more than 22 hours per week.” [source]
“Britain remains a pioneer in listening to digital radio via DAB. On Thursday, new RAJAR record figures were recorded. 47.3m listeners (91.6%) in the first quarter listened at least once a week to digital radio.” [source]
In fact, the most recent RAJAR research found that 43% of the UK adult population listened to digital radio in a week, and only 27% listened to DAB radio. The high percentages quoted in the German press are for listening to ALL radio via ALL platforms, not for digital radio or DAB radio alone.
I recall Frontier Silicon chief executive Anthony Sethill having been quoted in his company’s press release in 2008 saying: “Digital radio is here to stay, with DAB sets outselling analogue models by six to one.”
In fact, in the UK, analogue radios outsell DAB radios by four-to-one. Mmmm. It looks as if the DAB propaganda war in Germany has only just begun.

Government expenditure cutbacks clobber UK commercial radio

As soon as the coalition government came to power in May 2010, it implemented Conservative Party policy to make substantial cutbacks to the amount of public money spent on government marketing campaigns. Commercial radio was hit the hardest because, more than any other medium, it had become increasingly dependent upon government expenditure on advertising airtime.

In 2010, before the general election, I had predicted [see blog] that the impact of these cutbacks would prove “disastrous” for the commercial radio sector. I had calculated that a 50% cut in total public expenditure on commercial radio advertising would lose the sector £44m to £48m in revenues, equivalent to 9% of total sector revenues.

Interviewed by BBC Radio Four, I was asked if my scenario was not overstating the potential impact on commercial radio. I argued that it was not – the amount spent by the government’s Central Office of Information [COI] on commercial radio dwarfed all other radio advertisers by miles. By February 2010, government expenditure on radio commercials was greater than that of the second, third, fourth and fifth largest advertisers combined.

The Radio Advertising Bureau had put a brave face on the losses from its biggest advertiser. In June 2010, it said: “We are optimistic that radio’s strengths will be recognised as COI budgets come under ever greater scrutiny.” In September 2010, it said it was “working with a wide range of advertisers to bridge the gap” left by public expenditure cuts.

However, the latest data from Nielsen show that the impact upon commercial radio has been even greater than I had forecast. In the year to February 2011, COI expenditure on radio advertising was down 70% year-on-year, much greater than the 50% cut that had been anticipated from previous Conservative Party pronouncements. In total, commercial radio lost £44m per annum from all public expenditure on radio, compared to the previous year.

The worse news was that, as the graph above shows, the fall in COI expenditure has become steeper in recent months. As a result, the impact on the sector in 2011 is likely to be just as severe as it was in 2010. The hard fact is that this is not a temporary cyclical loss for commercial radio – these revenues will not rebound for as long as the coalition government remains in power.

The graph shows clearly that no individual or group of advertisers have been able to substitute entirely for the losses caused by government cutbacks, although some gains were made from clients in 2010 [see blog]. No commercial advertiser spends more than £10m per annum on radio, whereas the COI had spent £58m in the year to March 2010 (but was down to £17m by February 2011). This is simply too big a gap to be filled by a few individual commercial advertisers.

Media Week reported recently that “the more optimistic media owners are hoping the COI’s former spend [on radio] can be clawed back by year’s end.” It is hard to see how that can be realistically achieved, given the scale of the £44m per annum loss from public sources to date, particularly in the face of declining consumer disposable incomes.

In an attempt to offer a positive outlook, Media Week suggested: “But the situation is set to improve. From April [2011] onwards, there will no longer be any comparable year-on-year COI spend left in the system, as purdah [sic] kicked in 2010.”

Perhaps what Media Week was trying to say was that COI expenditure will level off this year once the savage cuts have been in situ for more than a year. Yes, inevitably, but that does not in any way help an industry that has just witnessed £44m per annum of revenues disappear into thin air. Remember that total commercial radio revenues in 2010 were only £523m, already down from £641m in 2004. Now a further huge 8% chunk of income has gone.

Another commentator recently noted optimistically: “The [radio] medium took £523 million in revenue in 2010, up 3.3% year-on-year, and 2011 looks like another positive year of growth, not the inevitable management of decline forecast by some.”

However, once inflation is taken into account, 2010 commercial radio revenues fell in real terms [see blog]. Far from a decline being “forecast by some,” the industry’s own data demonstrate that decline has been occurring since 2004 in real terms, long before the recent cuts to government expenditure. Adjusted for inflation, commercial radio revenues in 2010 were lower than they had been in 1998.

This is not the time for spreading unfounded optimism based on ignorance of the facts. If anything, the impact of government cuts has proven to be more than “disastrous” and will necessitate even more restructuring of the commercial radio sector in the short term. This could include the closure of further unprofitable digital ventures and of sector support agencies whose subscriptions will begin to appear increasingly discretionary when the axe has to fall somewhere.

When UK radio listening figures are this good, why does RAJAR need to fib?

It is good to know that radio is still an extremely popular medium in the UK, something borne out by the latest radio audience metrics published by industry body RAJAR for Q1 2011. However, in its determination to make every quarter’s results newsworthy, RAJAR has a track record of bending the truth to achieve press headlines [see blog May 2010]. This latest quarter was no exception.

According to the RAJAR headline:
• “Total radio listening hours reach 1,058 million per week – new record.”^

RAJAR explained:
• “The total number of radio listening hours broke all previous records to reach 1,058 hours per week …”^

Fantastic news! Except that this is not at all true. RAJAR’s own historical data tell a different story:
• 1,088 million hours per week in Q2 2001
• 1,092 million hours per week in Q3 2001
• 1,092 million hours per week in Q4 2001
• 1,090 million hours per week in Q1 2002
• 1,072 million hours per week in Q4 2002
• 1,094 million hours per week in Q1 2003
• 1,066 million hours per week in Q3 2003
• 1,076 million hours per week in Q4 2003
• 1,086 million hours per week in Q1 2004
• 1,072 million hours per week in Q2 2004
• 1,068 million hours per week in Q3 2004
• 1,059 million hours per week in Q1 2005
• 1,068 million hours per week in Q2 2005
• 1,072 million hours per week in Q3 2005
• 1,060 million hours per week in Q4 2005
• 1,063 million hours per week in Q3 2006

During sixteen quarters between 2001 and 2006, total hours listened to radio were greater than they were last quarter. “New record?” No. “Broke all records”? Er, no.

The reality is that total radio listening has not yet returned to the level it had achieved in 2001. Except that, ten years ago, the UK adult population was 48.1 million, whereas now it is 51.6 million. So the population has increased by 7% over the last decade. Yet total UK radio listening is still less than it was then.

Most statisticians I know would refer to that as a like-for-like 7%+ decline in total hours listened to radio. However, to RAJAR, it is evidently a “new record” that “broke all previous records.”

Why does any of this matter? Because radio broadcasters have been progressively losing usage over most of the last decade. Initially, it was 15-24 year olds that were spending less time with radio. Increasingly, it is also 25-34 year olds. For a decade, the UK radio industry has desperately needed a coherent strategy to reverse this loss of listening. The decline in young adult listening to broadcast radio does not merely impact the NOW. If these consumers do not find anything in their youth worth listening to on the radio, they will grow old without the radio habit. Their radio listening patterns NOW are likely to influence radio listening for the next half-century.

This is why RAJAR’s continuing efforts to achieve yet another headline in the Daily Mail proclaiming “Radio listening at an all time high” are ultimately redundant. Those headlines do not impact the reality of the data collected from tens of thousands of radio listeners every month. Those data show incontrovertibly that listening is in significant long-term decline amongst younger demographics. And radio will be in mortal danger if it does not re-invent itself for the next generation.

You only have to listen to any pirate radio station in London to understand that the gulf between what young people are actually listening to and what the old fogies who run UK radio are giving them has never been wider. Chris Moyles is as passé as Dave Lee Travis was twenty years ago.

So, yes, RAJAR’s fibs and the resulting Daily Mail headline will be another opportunity for champagne corks to pop in radio boardrooms across the land. But if radio doesn’t start making itself exciting and relevant to young people, broadcast radio’s future role will be relegated to a soundtrack in old people’s homes. Complacency such as that propagated by RAJAR will only make many radio businesses redundant in the long run.

^ in a footnote this small, the RAJAR press release admits the caveat “since new methodology was introduced in Q2, 2007.”

DAB Radio Downgrade: how is '90% of FM coverage' a sensible target for DAB to replace FM?

“Makin’ a good t’ing bad!”

Moving the goalposts. Governments are adept at doing just that to help them achieve their targets or to make figures look better than they really are. Digital radio switchover is no exception. Given the technical and financial impossibility of the task plotted twenty years ago to completely replace analogue radio broadcasting with DAB radio, it has became necessary in recent months for the civil servants and digital radio lobbyists to move the goalposts.

In a blog in April 2011, I had outlined Ofcom’s latest ruse to deliberately plan to make DAB reception worse than existing FM reception for many radio listeners. Nevertheless, Ofcom will still declare this a victory for the technical superiority of the DAB platform.

The latest proposal under consideration is to make coverage of local DAB transmitters equivalent to 90% of existing FM coverage. On the one hand, this represents a belated admission that DAB radio cannot realistically achieve the same robust coverage as FM. On the other, it is a massive kick in the teeth to radio listeners – an attempt to purposefully replace something good (FM) with something worse (DAB). Madness!

A recent presentation by DAB lobbyist organisation Digital Radio UK invoked a new, vague “local digital coverage equivalent to 90%” criterion [see below]:

“90%” of what? The government’s Digital Britain report in June 2009 had fixed the digital radio switchover criteria as:
• “When 50% of listening is to digital; and
• When national DAB coverage is comparable to FM coverage, and local DAB reaches 90% of the population and all major roads.” [emphasis added]

There was never anything in Digital Britain about achieving “90% of existing FM coverage.” It was always “90% of the population.” The goalposts are being moved to make it easier for the government and DAB lobbyists to declare that DAB has achieved the criteria. Despite this outcome making the consumer experience of radio evidently worse.

We were told that one result of the Digital Radio Summit meeting on 31 March 2011 between government, regulator and the radio industry was:

“It is understood that it will cost around £20-30m to extend the local DAB signal to 90% of the FM signal in the UK…”

At a Westminster Media Forum conference on 5 April 2011, the topic of this newly created “90% of FM” criterion was raised by several speakers:

Jimmy Buckland, director of strategy, UTV Media: “There’s a DCMS [Department for Culture, Media & Sport] plan that’s been referred to today that’s currently on the table that would take local multiplexes to just 90% of what FM already delivers, with no commitment on major roads. If that plan’s agreed, it just about gets us to base camp.”

[…]

Neil Midgley, assistant media editor, The Daily Telegraph: “Now the briefing that we were getting last week was somewhere below £30 million for a build out to about 90% of current FM coverage. “

[…]

Daniel Nathan, director, Brighton & Hove Radio: “Just leading on from that, in Jimmy’s slide we saw the figure being an aspiration of ‘90% of the population’ and I was quite disturbed to hear that now that they are kind of moving away from ‘90% of the population’ to ‘90% FM coverage.’ When was that decided and by whom?”

[…]

Jimmy Buckland: “There were two different figures, there was originally a figure which was the criterion, at which point you would make a decision about switchover which was that the Government said that once we had ‘90% population coverage’ and ‘coverage of all major roads,’ you could make a decision and there were a couple of other criteria that go with that. The second figure which was ‘90% coverage of current FM’ for local DAB concerns what would be delivered by a proposal which is currently on the table. So to tie in with the previous point, what that £30 million delivers is a little bit more coverage at the local level, aggregated to 90% on a UK wide basis, so in some local markets it could be comfortably less than 90%, in other markets it could be higher and it doesn’t get you to the universality that you need for switchover.”

So, two questions remain unanswered:
• Who came up with the idea of ‘90% of FM coverage’ to be sneaked in as an easier criterion?
• Why are large parts of the radio industry (including RadioCentre and the BBC) not publicly campaigning against this ridiculous proposal intended to make reception of their radio stations on DAB WORSE for listeners than existing reception on FM?

It is hard not to conclude that the parties involved in this latest wheeze seem happy to treat the UK’s 46,727,000 radio listeners with utter contempt.

Which? says: DAB radio switchover must be "consumer led or not at all"

What would have to be done to make DAB radio successful?

“What there does need to be, as Freeview and digital satellite has shown in television, is simply a sufficient combination of services, technology, simplicity and price or discount to provide a value proposition for the consumer,” suggested Stephen Carter in 2004, when he was chief executive of Ofcom.

“….. for the consumer” were the key words. They were also the words that became forgotten. The consumer was ignored in the radio industry’s pursuit of the radio industry’s own agenda for DAB radio. As a consequence, DAB radio has still not succeeded … with consumers. The failings were acknowledged by Quentin Howard, one of the architects of DAB radio in the UK:

“The mistake by broadcasters was in not understanding that ‘build it and they will come’ is no longer practical in this integrated technological age.”

Which?, the UK consumer advocacy, noted the radio industry’s lack of attention to the consumer in a February 2011 briefing paper entitled ‘Digital Radio Switchover in 2015? Consumer Led Or Not At All’:

“The transition to digital radio is currently industry led. The benefits of a transition to digital radio over the current analogue service are not clear to consumers, and the uptake of the technology over the past 10 years reflects this.”

Which? suggested that, before the government can announce a date for digital radio switchover, the following criteria should be met:

• “Uptake should be a minimum of 70% of all FM radio listening transferred to digital, leaving 30% still listening on analogue (FM/LW/MW/SW) (the Government’s Digital Radio Action Plan suggests 50%)
• The transition to digital must not be announced until coverage, including a measure of signal quality, is better than that of FM radio
• DAB must have been fitted as standard in all new cars for at least two years and an effective and affordable solution to in-car conversion must be available prior to the announcement of a switchover (which costs no more than for in-home conversion)
• Government must conduct a full cost-benefit analysis from a consumer perspective as a priority because increasing consumer desire for DAB should not focus on cost alone
• Minimum standards associated with a kite mark must be ambitious and future-proofed and any incentive scheme to switch to DAB should offer only kite marked receivers
• Consumer group representatives must be involved in the development of an information campaign independent from industry to raise awareness of the digital switchover by consumers and ensure guidance and training tools are available to retailers. In this regard, any lessons from the Digital TV switchover should be acted upon
• In its assessment of the environmental impact of a switchover to digital radio, the Government must tackle the full range of issues around recycling of analogue sets and the energy impacts of DAB”

However, in some of these areas of concern, current policy on DAB radio appears to be moving in the opposite direction to that advocated by Which?:

• The 50% criterion (50% of radio listening via digital platforms before switchover can be announced) is not mandatory because it was never included in the Digital Economy Act [see Jan 2010 blog]
• The latest plan for DAB is not to deliver reception even as good as FM, but to make it worse than FM [see recent blog]
• Only 1% of cars have DAB radios fitted and future take-up will inevitably be slow [see recent blog]
• Roberts Radio reported a 35-40% customer return rate for its in-car DAB radio adaptors [see Nov 2010 blog]
• The cost benefit analysis of DAB radio to be considered by the government will also be authored by the government, rather than commissioned independently [see Jan 2011 blog]
• Roberts Radio admitted having had to pull the plug on several DAB receiver projects, including the industry’s promised ‘£25 DAB radio’, because they could not meet Roberts’ minimum quality standards

In July 2010, after the formation of the new coalition government, culture minister Ed Vaizey had said:

“If, and it is a big if, the consumer is ready, we will support a 2015 switchover date. But, as I have already said, it is the consumer, through their listening habits and purchasing decisions, who will ultimately determine the case for switchover.” [see Sep 2010 blog]

So, it might appear that the Minister and Which? are, in fact, both lined up in agreement that digital radio switchover can only happen if it is supported by consumers. So why has the government not yet recognised that consumers already seem to have given the thumbs down to DAB?

Because there are middle men (Ofcom, DCMS, Digital Radio UK, Arqiva, DAB multiplex licence owners) who persist in keeping the DAB dream alive in Whitehall. Yet again, consumers are being drowned out by the clamour of agencies eager to pursue their own narrow objectives. And the mantra of the middle men is: DAB crisis, what crisis?

DAB Radio Downgrade? The new masterplan to deliver DAB radio reception worse than FM

When something works well, it just works. You do not need to analyse why it works. It just works. And nobody asks questions as to why or how. That is the case with FM radio. During half a century of development, more and more FM transmitters have been built across the UK (2,100 currently in operation) so as to reach the point now where almost the entire population receives an FM signal (maybe not always perfect, but some reception rather than none at all).

DAB radio was intended to replace FM radio. However, it must only be worth replacing FM with DAB if DAB is actually better than FM. Why replace a transmission system that has taken 50 years to perfect with something that is going to be worse? Unfortunately, nobody thought to conduct a cost/benefit analysis during the last two decades to determine what the cost would be of making DAB radio reception as good as FM radio, let alone better. As a result, DAB radio was foisted upon the public in 1999 without a roadmap to ensure that reception was even as good as FM radio for consumers.

Twelve years later, DAB reception remains worse than FM reception in many places, or is non-existent. Whereas poor FM reception gives the consumer a poor quality listening experience, poor DAB reception provides no listening experience whatsoever. With DAB, a poor signal is the same as no signal.

Instead of Ofcom valiantly admitting defeat over DAB radio – which might infer that the regulator and its predecessor, the Radio Authority, had screwed up the implementation of DAB in the UK – Ofcom presses ahead with increasingly desperate attempts to try and salvage this technological and regulatory disaster.

Ofcom’s latest ‘project’ is to try and understand why FM radio, more than half a century after its introduction, gives consumers acceptable radio reception. Intrinsically, the work is redundant. If FM works well, why bother to analyse why it works? The answer is: because DAB radio does not work. In order to make DAB work, an understanding is deemed necessary of why the system it was intended to replace – FM radio – does work.

Belatedly, it has been understood by the bureaucrats that the expense of making DAB as good as FM will prove too costly. It requires too many DAB transmitters, too many DAB power increases, at too great a cost for the radio industry. Might this not be a good time for them to back away from the notion of DAB radio REPLACING FM radio because it is simply too costly, even just to make it AS GOOD?

Not for the bureaucrats involved. Instead, the philosophy within Ofcom and the government is a new plan to deliberately make DAB radio NOT AS GOOD as FM radio. But still to persuade consumers that DAB is intended to replace FM radio for national and large local radio stations. Madness? Yes. Self-defeating? Yes. Contempt for radio listeners? Totally.

Peter Davies, who is responsible for radio at Ofcom, explained part of this 1984-style philosophy to replace ‘good’ FM with ‘worse’ DAB to the Digital Radio Stakeholders Group meeting in the calmest of tones on 3 February 2011. Although his presentation is lengthy, I have included Davies’ words in full below so that you too can try and decipher the logic of a solution for DAB radio that is purposefully sub-par.

Perhaps the Digital Radio UK marketing slogan next winter will be: ‘Buy a DAB radio! Worse reception than FM guaranteed. But better than no radio at all.’

Peter Davies, Ofcom: “The Coverage Planning Working Group is chaired by Ofcom, but we have effectively two groups that are feeding into this. There is the actual Working Group that is doing all the sort of hard grind of doing the planning work, and that consists of Ofcom, Arqiva and the BBC. There is also a Planning Advisory Group which consists of all the [DAB] multiplex operators, with Digital Radio UK and RadioCentre as well. So what I’m going to run you through this afternoon, quite quickly because of the time, is just what we’re doing in terms of FM. What is it we are trying to match? Secondly, how you then do that with DAB. Thirdly, looking at what we need to do to the frequency plan in the UK to achieve that. And then just onto the next steps.

So, FM coverage. I should say we are doing this for national services as well as local. So it’s both BBC and commercial national services, as well as the local. But I’m going to focus this afternoon on the local because that’s, in a way, where some of the more difficult issues are. This is a map of Manchester. I know you won’t be able to see the detail on that, but it gives you an impression, at least. So what we’ve done in each part – in fact, in the whole country – is define a set of ‘editorial areas.’ So that’s shown on this map by that dotted line – you can see around the edge, a sort of dark purple dotted line – so that everywhere in the country is covered by one or more areas – there are some overlaps – but at least everywhere is covered by one area. So the editorial areas are areas that have been agreed by the BBC and by the [DAB] multiplex operator and commercial radio operators as being the sort of area that they would, in an ideal world, like to cover. It’s also based on [DAB] multiplex areas, so it’s a bit of a compromise.

So, if you look at the actual coverage of BBC Radio Manchester [GMR] within this, that’s shown in the sort of standard way of measuring – 54 db – is shown in green but, actually, editorially BBC Radio Manchester would like to cover the bits within the dotted line. So there is coverage beyond the editorial area where people can pick up the service, but it’s not really intended for them. And, equally, there are bits within the existing editorial area which aren’t covered terribly well on FM but which, nevertheless, the station would like to think it serves.

In terms of the actual [FM] coverage, it’s been quite difficult to determine what that is. The ‘54db’ is the standard internationally agreed planning measure. So that’s 54db per μv per metre, but I’m not an engineer so don’t ask me any more detail than that. But it’s a definition that was drawn up back in the 1950s and is really about reception 10m above the ground, using a rooftop aerial and it sort of tells you whether you can get a signal on your radiogram, which is not terribly useful [now]. So we know that people use radios in very different ways, but we sort of know that this works, but it has never actually been tested. So it’s a planning definition, which is very old and slightly messy.

So what we’ve been doing as part of this work is drawing up what’s known as a ‘link budget ‘, which is effectively taking the signal strength as it leaves the transmitter and then adjusting it all the way along until it actually gets to the receiver. So, in other words, you adjust it because it’s a distance from the transmitter going over some hilly ground, going down into buildings, loss within the receiver itself and so on. So that you can work out what signal strength you will need to work to get decent FM coverage. So we’ve looked at three different strengths because we know that the 54db is probably a little bit conservative, so we also looked at 48db and 42db, again because conditions vary between what you can receive on a portable kitchen radio and what you can get in your car. We are also looking at coverage not only of households, but also of major roads as well, so it’s not just an indoor measurement we’re looking at.

What we have seen so far is actually that the link budget we have developed is that these numbers are probably about right. So 42db is probably about right for cars. But you can see that there’s not actually very much yellow on that map, so that most places either get a good solid indoor signal, or the signal’s not good at all, basically. So, for each area, we have looked at both the BBC local service – so that’s BBC Manchester – and also the commercial coverage, and we’ve taken the largest commercial station in each area. So, for Manchester, this is ‘Key 103.’ As you can see, the coverage is very different, mainly because they are using different transmitter sites and different powers on FM. But, of course, both of those services and others are on the same multiplex for DAB, so you have to think ‘what exactly is it on FM that we are trying to match?’ It’s no good just matching Key 103, you can’t just match to Key 103 because then you would be missing out BBC Manchester and other services. In this case, commercial [radio coverage] is smaller. In other cases that we have looked at, the commercial [stations] cover one part of the county but not another, but the BBC [station] will do the opposite.

So, what we’ve then done is to look at the composite coverage of both BBC local [radio] and the largest commercial station. So this is what we think people in the area would expect to be able to hear as a local service on FM. So you get either the BBC or the commercial radio [station] or both. So that’s the basis of what we think we should be trying to match. So it would be sort of green or blue for indoor, and the yellow bits for road coverage. As I say, we’ve done that for basically every area in the country, including the Nations services – so Radio Scotland, Radio Wales, etc for the BBC – and for the national services as well.

The question then is ‘how do we match DAB [to FM]?’ So the approach to that again has been to build up a link budget for DAB, starting with the transmitter and going right the way through to the receiver. And we’ve been doing receiver tests as part of that. And what we tried to do – because that sort of coverage is slightly debatable on FM – is [identify] where exactly is that band, and where exactly is that field strength? The approach we have taken is, first of all, to say that, within the editorial area, let’s plan for absolutely universal coverage. So how many transmitters – if you wanted to cover it as near as possible to 100% – how many transmitters would you need, both to get indoor coverage and road coverage as well? And we’ve tried to do that in a sort of commonsense way by starting with where the existing FM transmitters are. So rather than just look for new sites, because actually if coverage from FM is good from that site, so you should get decent coverage from DAB from that site as well. And then we’ve added on transmitters at decreasing levels of coverage until you get as close as we can to 100%.

Then, once we’ve done that, we’ve said ‘okay, actually some of those are now covering areas which aren’t covered by FM’ so actually you might not need them. So then you can then sort of roll back from that full universal coverage. The question then is ‘where do you draw the line?’ So, if you look at Manchester. Again, you’ve got the editorial area, which is a bit hard to see on this, but is the solid purple line around the edge. That is the existing local DAB coverage in Manchester, so you see 66.4% of households at the moment. In terms of households [for FM coverage], we have got 96.2% indoor at the moment, 98.2% (that’s a slightly sort of spurious measurement because it’s not actually a road measurement, but it’s households), so 96.2% for FM. So 66.4% existing [DAB] coverage from the two transmitters which are currently operating from the Manchester multiplex. It is one in central Manchester – sort of there – and there is one at Winter Hill at the top in the northwest corner.

We then looked at ‘okay, what would you do if you just increased the power of the existing transmitters and moved them up the mast a bit?’ And, actually, that gets you, as you can see, quite significantly increased coverage. In order to do that, we need to change the frequency plan, and I’ll come back to that in a minute. So that gets you up to 82% [DAB coverage] and then we keep adding on transmitters until we get as close as we can to 100%. This goes to 99% and that means 15 transmitters which are shown by the crosses dotted all over that map.

But then, as I say, you look at it and you say ‘well, actually, the two smallest of these – which are these two up here – actually have no household coverage at all, and the smallest one only adds 8km of road coverage.’ Now, obviously, if you’re driving and you lose your radio reception, then that’s a problem. But there’s a question as to whether that is essential for local coverage – it might be for national, but is it for local? So the question is ‘where do you draw that line in terms of a sort of cost/benefit analysis,’ if you like? You might decide, actually, you wouldn’t bother with those, but the question is ‘how far down the list of 15 [transmitters] do you go,’ as to what’s commercial viable and what provides an acceptable level of service to consumers?

So that’s the approach that we’ve taken. As I say, in order to do that, we need to change the frequency plan. Those are the big [frequency] blocks we use for DAB at the moment, dotted around the country. And you can see that they – the colours represent frequencies – so you can see that we have to reuse the same frequencies over and over again around the country. And that does cause interference so, at the moment, Manchester uses the same frequency as Birmingham. And, because of that, we can’t increase the power of the Manchester transmitters to get beyond that 66% to the 82% [coverage]. And that problem is repeated around the country. So what we’d like to do is re-draw the frequency map, which means that, as far as consumers are concerned, means doing a re-scan of their radio but does then allow us to boost the coverage quite significantly from existing transmitters and reduces that problem of interference which, in same places, can be quite significant. In order to that, it’s quite a long process – we need international co-ordination – but that part of the planning process we are going through at the moment.

So, the next steps are to finalise that frequency plan and begin the international co-ordination. We’ve got to complete the FM coverage maps and just check that link budget for FM, both for local and national [stations]. And then, for each of the local DAB areas and for the BBC national multiplex and for Digital One, the commercial multiplex, to produce the coverage maps and the household count and the road count as well for all of these existing multiplexes. Once we have done all of that, we plan to publish the whole thing later in the spring or early summer in a consultation so that we can then begin a debate as to whether this approach is actually right or not, and where it gets us.

Obviously, one of the big questions in all of that is actually ‘how much does it cost the broadcasters?’ I should say that that’s not something the Coverage Planning Group is looking at. It’s not something that we’ve been asked to look at, so it’s purely a technical approach at this stage but we think, sort of by the end of April, we should have the answers of how many extra transmitters you would need in order to achieve switchover.”

So the overarching question posed by the forthcoming Ofcom consultation seems to be: how poor can DAB coverage be made but still be accepted by consumers? If Peter Davies’ workplan, as explained here in February 2011, sounds vaguely familiar, it might be because he had addressed the Radio Festival in July 2008 and promised:

“Once we have defined what existing DAB coverage is, we then have to work out what it would take to get existing DAB coverage up to the level of existing FM coverage. Now, we have already done a lot of work on this, and certainly enough to inform the interim report, and the whole thing will be finalised in time for the Digital Radio Working Group final report later this year.” [see Dec 2008 blog]

Incredibly, three years late[r], the promised work is only just being completed. An amazing lack of urgency has been demonstrated by Ofcom, despite DAB radio resulting in more correspondence from angry consumers to the broadcasting minister Ed Vaizey than any other issue.

What most astonishes me is that the digital radio sector is still trying to persuade people living in Manchester to purchase a DAB radio, just as it has for the last twelve years, when it knows that there is a one-in-three chance that a Manchester household will be unable to receive ANY local stations via DAB, according to Davies. I assume a similar situation prevails in other cities.

Time for a class action by disappointed DAB radio receiver buyers?

[no accompanying graphics because DCMS explained: “Peter Davies’ Ofcom presentation is not attached as the content is still work in progress. Ofcom plan to publish all of the data later in the year.”]

Commercial radio: "so keen to hold back the BBC?"

House of Lords Select Committee on Communications
Inquiry on Governance & Regulation Of The BBC [excerpt]
22 March 2011 @ 1515

Baroness Deech: Listening to you, I am a bit puzzled about why you are so keen to hold back the BBC. Can’t Virgin Media and the local commercial radio stations stand on their own two feet? Why have they got to hold back the BBC?

Mr Andrew Harrison [chief executive officer, RadioCentre]: I would not characterise it at all as wanting to hold back the BBC; I would characterise it as wanting a level playing field for the commercial sector to compete. The truth is that, in radio, the BBC is hardly held back. It has 55% national market share, it has the vast majority of national FM spectrum and it has a huge raft of local radio stations, so it is hardly held back. We seek the opportunity to build our own commercial businesses, entrepreneurially and innovatively, without facing the elephant in the room that, every time we try to do something new, there is a BBC service that pops up to squash it before it has time to be established.

Mr Andrew Barron [chief operating officer, Virgin Media]: With great respect, I think we are in slightly different places. I would argue that Virgin Media is one of the companies pushing the BBC forward in many instances.

[This is an uncorrected transcript of evidence taken in public and webcast on http://www.parliamentlive.tv. Any public use of, or reference to, the contents should make clear that neither Members nor witnesses have had the opportunity to correct the record.]