End Of Year Round Up: Radio

Last year was an eventful one for the UK radio industry, with mixed RAJAR results, declining ad revenues and the second national digital multiplex playing on the minds of relevant industry players.

At the beginning of the year, GCap’s 95.8 Capital FM was rebranded as Capital Radio, shifting its music policy towards less repetition and focusing on a ‘no more than two ads per break policy’ (see Capital Radio Returns Following Rebrand).

Channel 4 chief executive Andy Duncan lifted the lid on the broadcaster’s long-awaited plans to enter the digital radio sector, revealing that C4 would make a “serious bid” for the second national DAB multiplex (see Channel 4 Announces Plans For Digital Radio).

J-ET, the UK radio industry’s electronic trading system which handles well over 80% of all national radio revenue, launched in Scotland in February at four media agencies and five radio sales points (see Radio Trading System J-ET Expands Coverage To Scotland).

In the same month, the Commercial Radio industry announced plans to create a single industry body, aimed at supporting advertisers and working towards a common vision for the Commercial Radio sector (see Commercial Radio Creates Single Body To Strengthen Industry).

By March, GCap backed down from its threat to sue media regulator Ofcom over the creation of a second national DAB multiplex. GCap, which holds the majority share in the UK’s only national digital network, Digital One, had previously threatened legal action against the watchdog, with claims that it had acted unfairly and, according to chief executive Ralph Bernard, illegally (see GCap Abandons Legal Action Over Second Multiplex).

By mid year, sales of DAB radio sets in the UK topped the three million mark, according to figures from the Digital Radio Development Bureau, which revealed continued growth in the sector (see Digital Radio Sales Top Three Million).

Emap’s Magic FM scooped the top spot in London in May, thanks to massive increases in weekly reach and share of listening, pushing the station above rivals Capital Radio and Heart 106.2 to become Londoners’ favourite station (see Magic Steps Up To Take London Top Spot).

The RAJAR data also showed Britain moving steadily towards full digital adoption, with the “Digitally Enabled Universe” covering over half of the UK adult population for the first time in Q1 2006. The growth saw the number of adults equipped to receive digital radio in one form or another rise from 24.6 million in the last quarter to 25.5 million, pushing the percentage of those Britons with the technology from 49.8% to 51.5% (see Digital Radio Reaches New High).

The radio body also unveiled plans for a two-year audience measurement contract starting in January 2007, to be split between Ipsos MORI, RSMB and TNS, with RAJAR joining forces with BARB on an experimental electronic data-capture programme. The new two-year contract was said to allow RAJAR to introduce improvements including a simplified radio map, faster data delivery and more efficient use of samples, with individual listening behaviour able to be tracked for the first time (see RAJAR Announces 2007 Measurement Contract Details).

GCap reported a fall in profits with annual pre-tax revenue to the end of March down 40% to £22.2 million. On a statutory basis, including the effect of amortisation and other charges, the company made a loss before tax of £47.9 million. One of the main reasons for the slump was said to be the revamp of Capital Radio and its new advertising policy (see Revamp Renders GCap Profits Down).

Also in May, first quarter figures from the Radio Advertising Bureau showed that commercial radio revenue fell 4% from the last quarter of 2005, with figures down from £162 million to £149 million at the start of 2005 (see Radio Revenue Continues To Fall).

In June, is an historic move for the broadcaster, Channel 4 launched its new radio station, Channel4radio.com, saying it would take advantage of the absence of regulation and challenge traditional radio operators (see C4 Makes History With Radio Launch).

In the same month, GCap Media’s Planet Rock station announced it would follow Capital Radio will a ‘no more than two ads in a row’ policy (see Planet Rock To Adopt ‘Two Ad’ Policy), whilst UBC Media said it had raised £3 million in order to invest in digital music download technology that allows listeners to buy music from radio stations via a handheld mobile device (see UBC Media To Invest In Digital Radio Download Technology).

Almost 14% of the UK adult population had a DAB digital radio in the home, with 23% of owners having more than one, according to the Digital Radio Development Bureau’s (DRDB) fourth annual business report on the DAB digital radio market which was released in August (see Repeat Purchasing Of DAB Radios On The Increase).

August also revealed that commercial radio revenues for Q2 2006 had risen year on year by 3.5% to £148.2 million, according to figures released by Ofcom and the RadioCentre. Despite a troubled 12 months, the industry had seen a record investment in branded content such as sponsorships and promotions (see Commercial Radio Revenues Up For Q2 2006).

GCap Media announced it would launch the UK’s first national jazz station on DAB digital radio, providing a sister service to its successful Classic FM station (see GCap Launches UK’s First National Jazz Station On DAB), whilst the company sold its two Manchester and Gateshead Century FM stations to Guardian Media Group for £60 million (see GCap Sells Radio Stations To Guardian Media Group).

October’s RAJAR data for Q3 2006 revealed that digital only stations were continuing to perform strongly, delivering record performances in weekly reach and total hours (see Digital-Only Stations Deliver Record Performances), whilst listening over the internet became more popular, with a report suggesting that BBC radio was being listened to via the internet more than ever before (see BBC Radio Listening Via The Internet Reaches Record Levels).

In November, GCap Media announced that its pre-tax profits were down 32% year on year, according to the group’s interim results for the six months to 30 September 2006. The company made £8.4 million compared to £12.4 million in the same period in 2005. Flagship London station, Capital Radio, saw its revenue down by £6.3 million year on year, deflated due to a difficult ad market and the implementation of its no more than two ads policy (see Capital Radio Continues To Impede GCap Media’s Growth).

Ofcom advertised the licence for the second DAB national radio multiplex in December, which was said to represent the first step in its DAB licensing programme intended to lead to a significant expansion in both local and national digital radio services over the next three years, with a variety of players expressing interest in putting a bid forward (see Second DAB Multiplex Licence Up For Grabs).