The First Annual Not The Ofcom Digital Radio Progress Report Report

Grant Goddard
radio specialist
www.grantgoddard.co.uk

August 2010

Contents

Grant Goddard
radio specialist

UK DAB & digital radio forecasts UK radio receiver hardware data UK digital radio listening data

The First Annual Not The Ofcom Digital Radio Progress Report Report Grant Goddard: August 2010

Grant Goddard
radio specialist

UK DAB & digital radio forecasts

The First Annual Not The Ofcom Digital Radio Progress Report Report Grant Goddard: August 2010

UK DAB receiver forecast Digital Radio Development Bureau

DAB receiver penetration (% adults, % households)
55 50 45 40 35 27.3 30 20.3 25 15.3 15.3 16.0 20 10.5 11.1 15 10 5 0 2004Q1 2004Q2 2004Q3 2004Q4 2005Q1 2005Q2 2005Q3 2005Q4 2006Q1 2006Q2 2006Q3 2006Q4 2007Q1 2007Q2 2007Q3 2007Q4 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 3.9 4.4 4.5 5.3 8.1 9.1 13.6 19.5 21.7 22.3 27.3 28.7 29.7

Grant Goddard
radio specialist

33.0

32.1

32.3

2009Q4

33.4

2010Q1

34.5

2010Q2

35.3 2010Q3

DAB receiver penetration falls below forecast

RAJAR actual (% adults)

[source: RAJAR, Digital Radio Development Bureau] The First Annual Not The Ofcom Digital Radio Progress Report Report Grant Goddard: August 2010

DRDB 2007 forecast (% households)

2010Q4

UK DAB receiver forecast Digital Radio Development Bureau

Cumulative DAB receiver unit sales (million at year-end)
25

Grant Goddard
radio specialist

20

15

10
10.52 8.53

DAB receiver sales lower than all industry forecasts

5
4.44 2.72

6.45

actual 2004 DRDB forecast 2005 DRDB forecast 2006 DRDB forecast 2007 DRDB forecast 2008 2009 2010

1.29 2004

2005

2006

2007

[source: Digital Radio Development Bureau] The First Annual Not The Ofcom Digital Radio Progress Report Report Grant Goddard: August 2010 5

UK DAB receiver forecast Digital Radio Working Group

DAB radio receiver sales (% of total radio receiver sales)
55% 50% 50% 45% 40% 35% 30% 25% 20% 20% 15% 10% 5% 0% 8% 13% 18%

Grant Goddard
radio specialist

22%

21%

Government forecast of DAB radio receiver sales very unlikely to be achieved

actual (DRDB four-quarter m oving average) DRWG aspirational tim etable (January 2009) trendline

2005 Q1 2006 Q1 2007 Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016 Q1 2017 Q1
[source: Digital Radio Development Bureau, Digital Radio Working Group] The First Annual Not The Ofcom Digital Radio Progress Report Report Grant Goddard: August 2010 6

UK digital radio listening forecast - Ofcom

Radio listening via digital platforms (% of radio listening at year-end)
100 90 80 70 60 50 40 30 20 11.0 10 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 5.9 12.5 16.6 18.3 20.9

Grant Goddard
radio specialist

Radio listening via digital much lower than Ofcom forecast

2018

2019

actual (RAJAR year-end)

[source: RAJAR, Ofcom] The First Annual Not The Ofcom Digital Radio Progress Report Report Grant Goddard: August 2010

Ofcom forecast (Novem ber 2006)

2020

UK digital radio listening forecast Digital Radio Working Group radio specialist
Radio listening via digital platforms (% of radio listening at year-end)
55 50 45 40 35 30 25 20.9 20 15 11.0 10 5.9 5 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 12.5 18.3 16.6 actual (RAJAR year-end) DRWG aspirational tim etable (Jan 2009) trendline 50

Grant Goddard

Government forecast of digital listening unlikely to be achieved

[source: RAJAR, Digital Radio Working Group] The First Annual Not The Ofcom Digital Radio Progress Report Report Grant Goddard: August 2010 8

UK digital radio listening forecast Digital Britain

Radio listening via digital platforms (% of radio listening at year-end)
68%

Grant Goddard
radio specialist

58% 50% 50% 43% 36% 33% 38% 43%

56%

49%

26% 24%

31% 28%

20.9%

Trendline predicts 50% criterion to be achieved yearend 2018, rather than 2013 or 2015
2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 2017 Q4 2018 Q4
9

0% 2004 Q4 2005 Q4 2006 Q4 2007 Q4 2008 Q4 2009 Q4 2010 Q4

Digital Britain ('organic grow th' forecast June 2009) Digital Britain ('drive to digital' forecast June 2009)
[source: RAJAR, Digital Britain, Value Partners] The First Annual Not The Ofcom Digital Radio Progress Report Report Grant Goddard: August 2010

historical data (RAJAR) historical data trendline

UK digital commercial radio listening target - RadioCentre

50% actual (RAJAR year-end) RadioCentre target (Jan 2007) 40%

Grant Goddard
radio specialist
50%

Commercial radio listening via digital platforms (% of commercial radio listening at year-end)

30% 30%

20% 16% 14.0% 11.0% 10% 5.0%

18.1%

19.0%

19.7%

Commercial radio listening via digital much lower than RadioCentre target

0% 2004
[source: RAJAR, RadioCentre] The First Annual Not The Ofcom Digital Radio Progress Report Report Grant Goddard: August 2010 10

2005

2006

2007

2008

2009

2010

2011

Grant Goddard
radio specialist

UK radio receiver hardware data

The First Annual Not The Ofcom Digital Radio Progress Report Report Grant Goddard: August 2010

11

UK DAB radio receiver sales

Quarterly DAB receiver sales (000 units per quarter)
1,000 179 162 153 681 750 121 101 510 489 500 382 363 338 119 796 964

Grant Goddard
radio specialist

200 863 180 160 140 120 100 Year-on-year growth in DAB 80 radio receiver sales negative during 60 2009 40 20 1 -10 20 -1 -6 -4 0 -20 483

358

366

308

294

245

287

299

183

250

205

134

111

34

38

40 5

17

13 4

18

21

28

0 2003 Q2 2003 Q3 2003 Q4 2004 Q1 2004 Q2 2004 Q3 2004 Q4 2005 Q1 2005 Q2 2005 Q3 2005 Q4 2006 Q1 2006 Q2 2006 Q3 2006 Q4 2007 Q1 2007 Q2 2007 Q3 2007 Q4 2008 Q1 2008 Q2 2008 Q3 2008 Q4 2009 Q1 2009 Q2 2009 Q3 2009 Q4

39

53

quarterly DAB receiver sales ('000) [left axis]

[source: Digital Radio Development Bureau] The First Annual Not The Ofcom Digital Radio Progress Report Report Grant Goddard: August 2010

102

year-on-year change (%) [right axis]

12

335

828

UK radio receiver sales

UK radio receiver sales four quarter moving average (000 units per annum) DAB receivers as percentage of total receiver sales 8% 9% 10% 12%13%14% 14%17%18%18% 19% 20%20% 21%21% 22%
1,208 1,051 1,407 951 1,493 1,566 1,575

Grant Goddard
radio specialist

12,000

22% 21% Only 21% of new radios sold in the UK are DAB

2,006

2,114

2,174

10,000

1,680

1,734

1,761

1,824

2,180

2,070

1,988

8,000

1,899 Q1 2010 7,101

10,678

10,611

10,657

10,550

6,000

2,000

0 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009

analogue radio unit sales ('000)

[source: GfK/Digital Radio Development Bureau] The First Annual Not The Ofcom Digital Radio Progress Report Report Grant Goddard: August 2010

DAB radio unit sales ('000)

13

7,284

4,000

7,854

Unit sales of DAB radios declining from 2008 peak

10,169

9,892

9,495

8,140

8,062

7,978

8,209

8,227

7,906

8,030

UK DAB radio receiver ownership

Percentage of adults (15+) who own a DAB radio receiver at home
45 40 33.0 32.1 35 32 27.3 30 25 19.5 22 20 15 10 4.4 5 0 2004Q1 2004Q2 2004Q3 2004Q4 2005Q1 2005Q2 2005Q3 2005Q4 2006Q1 2006Q2 2006Q3 2006Q4 2007Q1 2007Q2 2007Q3 2007Q4 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 3.9 4.5 5.3 8.1 9.1 10.5 20.3 22.3 27.3 28.7 29.7 41

Grant Goddard
radio specialist Take-up of DAB hardware is slowing
34.5 2010Q1 35.3 2010Q2
14

18

15.3

11.1

13.6

15.3

16.0

21.7

2009Q2

2009Q3

32.3

RAJAR
[source: RAJAR, Ofcom] The First Annual Not The Ofcom Digital Radio Progress Report Report Grant Goddard: August 2010

Ofcom

2009Q4

33.4

UK DAB radio receiver consumer likelihood to purchase

Grant Goddard
radio specialist

How likely is it that your household will get a DAB radio in the next 12 months? (6 months in 2006 and 2007) - % of responses
80 76 74

64 60 55

40

No evident increase in intention to purchase DAB radio receivers

28 19 16 20 17

20

17

0 likely
[source: Ofcom]

unlikely 2007 Q1 2009 Q1

2006

don't know 2010 Q1

15

The First Annual Not The Ofcom Digital Radio Progress Report Report Grant Goddard: August 2010

UK consumer access to digital radio

Access to digital radio platforms (% of UK households)
100 92 90 80 73 70 60 50 40 30 20 10 0 internet
[Source: Ofcom & RAJAR, Q1 2010] The First Annual Not The Ofcom Digital Radio Progress Report Report Grant Goddard: August 2010

Grant Goddard
radio specialist

Consumer accessibility to digital radio much higher for platforms other than DAB

35

digital TV

DAB radio

16

Grant Goddard
radio specialist

UK digital radio listening data

The First Annual Not The Ofcom Digital Radio Progress Report Report Grant Goddard: August 2010

17

UK radio listening by platform

UK radio listening by platform - hours listened (% of total adult hours listened)
9.4% 9.5% 12.5% 12.6% 12.9% 13.0% 12.7% 21.1% 13.9% 12.8% 100%

Grant Goddard
radio specialist

16.6%

17.8%

12.5%

9.3%

15.0%

17.9%

18.7%

18.3%

20.1%

60%

12.9%

71.1%

72.7%

69.5%

68.4%

68.6%

40% 66.1%

74.0%

67.5%

21.1%

80%

21.1%

66.6%

20.9%

66.7%

24.0%

66.2%

66.1%

20%

Analogue platform is two-thirds of radio listening

0% 2007 Q2 2007 Q3 2007 Q4 2008 Q1 2008 Q2 2008 Q3 2008 Q4 2009 Q1 2009 Q2 2009 Q3 2009 Q4 2010 Q1 2010 Q2 analogue
[source: RAJAR] The First Annual Not The Ofcom Digital Radio Progress Report Report Grant Goddard: August 2010 18

digital

unspecified

67.0%

24.6%

8.5%

UK radio listening by platform

UK radio listening by platform - hours listened (% of total adult hours listened)
80% 66.1% 71.1% 74.0% 72.7% 69.5% 68.4% 68.6% 67.5% 66.2% 66.1% 66.6% 66.7% 67.0%

Grant Goddard
radio specialist

60%

Digital platforms listening is recorded as increasing, partly because less unspecified listening is being recorded

40% 12.9% 15.0% 16.6% 17.8% 17.9% 18.7% 18.3% 20.1% 21.1% 21.1% 20.9% 24.0% 24.6%

21.1% 13.9% 9.4% 9.5% 12.6% 12.9% 13.0% 12.5% 12.7% 12.8% 12.5% 9.3% 8.5% UNSPECIFIED 2009 Q3 2009 Q4 2010 Q1 2010 Q2
19

20%

0% ANALOGUE 2007 Q2
[source: RAJAR] The First Annual Not The Ofcom Digital Radio Progress Report Report Grant Goddard: August 2010

TOTAL DIGITAL 2008 Q2 2008 Q3 2008 Q4 2009 Q1 2009 Q2

2007 Q3

2007 Q4

2008 Q1

UK radio listening by platform

UK radio listening by platform - hours listened (% of total adult hours listened)
80%

Grant Goddard
radio specialist

60%

40%

RAJAR definition of internet listening excludes on-demand, listen again, podcasts, internet-only radio and online music (Last.fm, Spotify, etc.)
7.0% 8.6% 9.9% 10.8% 11.0% 11.3% 11.4% 12.7% 13.1% 13.3% 13.7% 15.1% 15.8%

20%

2.6% 2.9% 3.0% 3.2% 3.3% 3.2% 3.2% 3.4% 3.6% 3.6% 3.4% 4.0% 4.1%

1.5% 1.6% 1.9% 2.1% 2.0% 2.2% 2.0% 2.2% 2.2% 2.2% 2.1% 2.9% 2.9% LISTENING VIA INTERNET

0% LISTENING VIA DAB 2007 Q2

[source: RAJAR] The First Annual Not The Ofcom Digital Radio Progress Report Report Grant Goddard: August 2010 20

LISTENING VIA TV 2008 Q1 2008 Q2 2008 Q3 2008 Q4

2007 Q3

2007 Q4

2009 Q1

2009 Q2

2009 Q3

1.7% 1.9% 1.7% 1.7% 1.7% 1.9% 1.7% 1.8% 2.1% 2.0% 1.7% 1.9% 1.8% DIGITAL UNSPECIFIED 2009 Q4 2010 Q1 2010 Q2

UK commercial radio listening by platform

UK listening to commercial radio by platform (% of adult 15+ listening) Commercial radio platform share: DAB = 13%

Grant Goddard
radio specialist

digital: internet, 2.6%

digital: unspecified, 3.4%

digital: DTV, 5.0% digital: DAB, 13.4% unspecified, 8.5% all analogue, 67.1%

[source: RAJAR, Q2 2010] The First Annual Not The Ofcom Digital Radio Progress Report Report Grant Goddard: August 2010 21

UK BBC radio listening by platform

UK listening to BBC radio by platform (% of adult 15+ listening) BBC radio platform share: DAB = 18%
digital: internet, 2.5% digital: unspecified, 0.7% digital: DTV, 3.3% digital: DAB, 17.9%

Grant Goddard
radio specialist

unspecified, 8.3% all analogue, 67.3%

Dial-up

[source: RAJAR, Q2 2010] The First Annual Not The Ofcom Digital Radio Progress Report Report Grant Goddard: August 2010 22

10

12

14

16

18

BBC Radio 2 BBC Radio 4 BBC Radio 1 Heart Network (UK) 5.8 4.8 3.8 2.7 2.4 2.1 2.1 1.9 1.7 1.3 1.1 1.1 1.0 1.0 0.6 0.5 0.5 Planet Rock Total XFM (UK) The Hits Smash Hits Radio Sunrise Radio National Heat 1Xtra from the BBC BBC Asian Network UK Jazz FM Absolute 80s Five Live Sports Extra Absolute Classic Rock NME Radio Panjab Radio Chill 0.5 0.5 0.4 0.3 0.3 0.3 0.3 0.2 0.2 0.2 0.1 0.1 0.1 0.1 0.1 BBC Radio Five Live Classic FM Galaxy Network (UK) Total Magic Total Real Radio Total Smooth Radio Total Kiss Network talkSPORT Total LBC (UK) Total Absolute Radio Gold Network (UK) BBC Radio 3 BBC 6 Music BBC World Service BBC Radio 7 Total Kerrang! 9.3 12.5

0 15.9

UK listening to national radio stations

[source: RAJAR, Q2 2010]

The First Annual Not The Ofcom Digital Radio Progress Report Report Grant Goddard: August 2010

Share of UK radio listening (% of adult 15+ hours listened)

Listening to digital radio stations [red] remains at low levels radio specialist

Grant Goddard

23

UK digital radio stations on Digital One national DAB platform

National digital radio stations
digital platforms national DAB RAJAR Q2 2010

Grant Goddard
radio specialist

local DAB

Freeview

internet

FreeSat

launched on national DAB

owner

station

business model

trial period (expired)

% share of total radio listening (adults)

weekly reach (adults)

1999 Planet Rock 2010 TIML Absolute 80s 2009 Premier Christian Radio 2009 UCB UK 2009 Amazing Radio 2008 BFBS Radio 2009 IPC NME Radio 2009 Panjab Radio 2009 Folder Media Fun Kids 2006 GCap Media TheJazz 2000 GCap Media Capital Life 2000 C4 + UBC Oneword Radio 1999 GCap Media Core 2000 Saga PrimeTime Radio 2000 Bloomberg Talkmoney 2000 ITN ITN News % SHARE OF ALL RADIO LISTENING % SHARE OF LISTENING VIA DIGITAL PLATFORMS % SHARE OF LISTENING VIA DAB PLATFORM

commercial commercial donations donations unsigned music government commercial commercial commercial commercial commercial commercial commercial commercial commercial commercial

0.50 0.15

718,000 288,000

closed 2010

6 months 3 months 8 months 6 months 4 months

0.13 0.07

253,000 155,000

closed 2008 closed 2008 closed 2008 closed 2008 closed 2006 closed 2003 closed 2002

Many commercial digital radio stations have closed

0.85 3.48 5.43

[source: RAJAR] The First Annual Not The Ofcom Digital Radio Progress Report Report Grant Goddard: August 2010 24

UK radio listening to digital stations

UK listening to digital-only radio stations - 000 hours per week (adults 15+)
50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 2003Q1 2003Q2 2003Q3 2003Q4 2004Q1 2004Q2 2004Q3 2004Q4 2005Q1 2005Q2 2005Q3 2005Q4 2006Q1 2006Q2 2006Q3 2006Q4 2007Q1 2007Q2 2007Q3 2007Q4 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1
Satellite

Grant Goddard
radio specialist

Listening to digitalonly radio stations boosted in 2010 by BBC Radio 6 Music

2009Q2

2009Q3

2009Q4

2010Q1

Dial-up

TOTAL (com m ercial + BBC)

[source: RAJAR]

COMMERCIAL RADIO

BBC RADIO

The First Annual Not The Ofcom Digital Radio Progress Report Report Grant Goddard: August 2010

2010Q2

25

UK commercial digital-only radio station listening

UK listening to commercial digital-only radio stations (adults 15+)
6 5.5 5.4

Only 5% of commercial Goddard Grant radio listening is to exclusively digital radio specialist content
50% 5.2

4.7

4.6

5.0

5.1

5.2

5.2

5.2

5.4 40% 30% 10% 0% 2010Q2

4.5

4.0

3.9

3.4

3.5

3.6

4 3.0 3.2

36% 33% 28% 29% 26% 27% 26% 24% 24% 23%

2.1

2.1

2.3

2.7

3 2.1

3.0

3.3

1.9

22%23%22% 20%

0 2003Q1 2003Q2 2003Q3 2003Q4 2004Q1 2004Q2 2004Q3 2004Q4 2005Q1 2005Q2 2005Q3 2005Q4 2006Q1 2006Q2 2006Q3 2006Q4 2007Q1 2007Q2 2007Q3 2007Q4 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1

0.6

Only 22% of commercial radio listening via digital platforms is to exclusively digital content

0.7

listening to com m ercial digital-only radio stations as % of all com m ercial radio listening [left axis] listening to com m ercial digital-only radio stations as % of digital listening to com m ercial radio [right axis]
[source: RAJAR] The First Annual Not The Ofcom Digital Radio Progress Report Report Grant Goddard: August 2010 26

4.3

UK BBC digital-only radio station listening

UK listening to BBC digital-only radio stations (adults 15+)
5

Only 4% of BBC Grant Goddard radio listening is to radio specialist exclusively digital content
40%

4 3.3 3.5

4.0 30% 3.2 2.9 3.1 2.6 2.7 2.8 2.5 2.4 2.6 2.8 2.2 22% 19% 16%16%16% 17% 16% 15%14%15%15% 14% 13% 20% 2.0 1.7 1.5 1.3 1.4 1.1 1.0 1.1 1.3 1.4 1.6 1.9 2.0 10% 0.8 2003Q1 0.0 2003Q2 0.0

Only 16% of BBC radio listening via digital platforms is to exclusively digital content
0% 2004Q2 2004Q3 2004Q4 2005Q1 2005Q2 2005Q3 2005Q4 2006Q1 2006Q2 2006Q3 2006Q4 2007Q1 2007Q2 2007Q3 2007Q4 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2

2003Q3

2003Q4

2004Q1

listening to BBC digital-only radio stations as % of all BBC radio listening [left axis] listening to BBC digital-only radio stations as % of digital listening to BBC radio [right axis]
[source: RAJAR] The First Annual Not The Ofcom Digital Radio Progress Report Report Grant Goddard: August 2010 27

UK radio listening by platform

Weekly reach of radio platforms (% of adults 15+)
26 24

Grant Goddard A separate RAJAR MIDAS survey (that includes non-linear radio consumption) demonstrates that radio specialist internet-delivered radio reaches almost as much of the UK adult population as the DAB radio platform
20.6 20.5 23.1 17.9 15.3 16.8 17.5 23.5 2010 Q2
28

18 13.3 13.5 16 11.9 14 12 10 8 6 2.7 4 2 0 2002 Q3 2002 Q4 2003 Q1 2003 Q2 2003 Q3 2003 Q4 2004 Q1 2004 Q2 2004 Q3 2004 Q4 2005 Q1 2005 Q2 2005 Q3 2005 Q4 2006 Q1 2006 Q2 2006 Q3 2006 Q4 2007 Q1 2007 Q2 2007 Q3 3.6 7.3 9.3

2007 Q4

2008 Q1

2008 Q2

2008 Q3

14.0

17.8

20

2008 Q4

18.9

2009 Q1

19.9

22

2009 Q2

2009 Q3

2009 Q4

20.4 2010 Q1

internet platform
[source: RAJAR MIDAS] The First Annual Not The Ofcom Digital Radio Progress Report Report Grant Goddard: August 2010

DAB platform