Insights at the ‘Future of Radio’ seminar

Our columnist Raymond Snoddy chairs MediaTel Group’s ‘Future of Radio’ seminar and finds the industry confident about its future.

There were some remarkable insights into the nature of radio and the radio market at last week’s MediaTel Group radio seminar.

“I don’t like music that’s why I listen to commercial radio,” announced panellist Morag Blazey, former chief executive of PHD, to gales of laughter.

In her rapidly expanding role as media iconoclast she also welcomed the controversial appointment of Chris Evans as Terry Wogan’s successor at Radio 2. The station had to be refreshed and Evans was 43 after all.

Without such changes insisted Blazey, who also chairs the IPA Radio Working Party, the Radio 2 audience could turn into the bunch of “old gimmers” like those who listened to Radio 4. The old gimmers laughed and laughed.

James Cridland, the radio futurologist who lives in London with the BBC – his Big Black Cat – was among the panellists who argued that commercial radio’s near universal move from the publicly quoted sector into private ownership was a good thing for the industry.

“Not being on the market gives you more of a chance to take a longer term view – not just protecting next quarter’s revenues but protecting the long term future of radio,” argued Cridland, who revealed he is planning a world tour of radio stations in the next few months in search of best practice wherever it can be found.

Private ownership gives you freedom, emphasised Jonathan Gillespie, group commercial director of GMG Radio, and a former head of YouTube and display at Google UK.

In fact, overall from a diversity of panellists there was a remarkable degree of unanimity and optimism on the major issues facing radio.

The current difficulties all boiled down to just one small problem – money – or rather the lack of it, and in particular the small issue of the missing £100 million.

The numbers tell the story with more than usual eloquence. In the first quarter of 2008 radio revenues added up to a moving annual total of £609.1 million. By the second quarter of this year the comparable figure was £514.4 million.

Yet over the past five years, despite a revolution in both media delivery and consumption, radio’s reach has remained remarkably stable. Among the highly valued adults aged between 15 and 24 there actually has been an overall rise in radio’s weekly reach, although most of the increase came from BBC services with commercial radio steady.

In this age group the BBC has gone from around 4.5 million to 4.95 million over the period, while the commercial sector remains bang on 6 million.

Compared with newspapers, radio has fared remarkably well over the past five years – partly future proofed by the exploitation of new delivery mechanisms such as the internet, satellite broadcasting and mobile.

But would all the non-traditional listening attract lower advertising yields along the lines of newspaper websites?

Mike Gordon, former deputy managing director of News Group and News International, now group commercial director of Global Radio, thought not. It was all down to reach and exposure and there was no entry charge – such as a cover price in the case of newspapers – to get in the way.

There was general agreement that much, if not all of the missing £100 million, would slowly come back once the recession was over, although competition for advertising revenue would inevitably intensify. It may, however, be 2011 before positive territory is reached again.

Blazey forecast that all the lost money would come back – but probably over a four or five year period. Even in the depths of the recession there were groups which had been increasing their spending on radio. Organisations which have increased their radio spend over the past year include Specsavers, Blockbuster,T-Mobile and Autoglass.

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