Data within the annual Digital Radio Report published by UK media regulator Ofcom demonstrate that the low take-up of listening to local commercial radio stations via digital platforms practically prevents the public policy of DAB digital radio switchover from being implemented in the UK, written by Grant Goddard in October 2012 for Seeking Alpha.

1. LOW DIGITAL TAKE-UP OF
LOCAL COMMERCIAL RADIO
PREVENTS DIGITAL RADIO
SWITCHOVER IN UK
by
GRANT GODDARD
www.grantgoddard.co.uk
October 2012

2. There are many practical reasons why the notion of 'digital radio switchover' in
the UK remains nothing more than a pipe-dream of civil servants and
regulators. One such reason was unintentionally highlighted by Ofcom's
publication today of its annual Digital Radio Report.
LOCAL radio stations are the bedrock of the UK commercial radio sector.
Around 300 local commercial radio stations account for 71% of all commercial
radio consumption. Those stations' continuing success sustains the entire
industry.
However, it will prove impossible for those local commercial radio stations to
switch off their FM/AM transmitters because the analogue platform still
accounts for at least 72% of their consumption. Analogue switch-off will never
be a realistic option when it has the impact of destroying your business.
53%
18%
16%
16%
15%
11%
20%
11%
30%
28%
30%
27%
24%
40%
33%
49%
60%
51%
Figure 1: Percentage of consumption of UK radio by digital platforms [source: RAJAR]
0%
ALL RADIO
2010 Q1
BBC National
Netw orks
National
Com m ercial
2011 Q1
BBC Local
Radio
Local
Com m ercial
2012 Q1
Digital platforms account for only 18% of consumption of local commercial
radio. This is the negligible outcome of an expensive, intensive 13-year
marketing and promotion campaign in the UK to persuade the public to switch
to DAB radio. This 18% is nowhere near the 50% threshold the government
selected as the pre-requisite for digital radio switchover. Indeed, if take-up
were to continue at its present rate, that 50% threshold would not be attained
by local commercial radio until the year 2035!
Listening to BBC national radio networks via digital platforms is almost twice
that of local commercial radio. It is evident that, whilst the BBC might consider
it is well on the way to attaining the 50% target, local commercial radio is
barely out of the starting block. Any attempt to implement digital radio
switchover would risk losing local commercial radio three-quarters of its
consumption and, as a direct result, three-quarters of the sector's revenues.
Low Digital Take-Up Of Local Commercial Radio Prevents Digital Radio Switchover In UK
©2012 Grant Goddard
Page 2

3. Figure 2: Percentage of consumption of UK radio by station type [source: RAJAR]
30%
9%
9%
9%
12%
10%
20%
12%
31%
40%
31%
46%
46%
47%
60%
0%
ALL RADIO
2010 Q1
BBC National
Netw orks
National
Com m ercial
2011 Q1
BBC Local
Radio
Local
Com m ercial
2012 Q1
And whilst one national commercial radio station may publicly boast about the
success it has had in converting its listeners to the digital platform, RAJAR
listening data demonstrate that, in aggregate, the UK's national commercial
radio stations are insignificant within the overall picture. Three-quarters of UK
radio consumption comprise BBC network radio and local commercial radio.
For local commercial radio, with 'digital listening' still only 18%, the DAB
platform could account for as little as 12% (Ofcom does not divulge). This is a
staggeringly low take-up when one considers the huge expenditure over more
than a decade on carriage charges for simulcasting hundreds of local
commercial radio stations on the DAB platform.
With no financial return yet visible from all that expenditure on DAB,
shareholders in commercial radio should stop to contemplate the extent of
destruction of shareholder value caused by the folly of station owners having
pursued this policy for digital radio. It was always a wholly unrealistic strategy
dreamt up by government and regulatory pen-pushers who evidently had no
understanding of the commercial radio industry or of consumer behaviour.
The fact that so many local commercial radio owners signed up to that pipedream and chose to divert so much revenue from content creation to a DAB
platform that so few people use is a major tragedy for the UK radio sector. It
has already destroyed a huge swathe of formerly very successful, genuinely
local radio businesses.
[First published by Seeking Alpha, 18 October 2012]
Grant Goddard is a media analyst / radio specialist / radio consultant with thirty years of
experience in the broadcasting industry, having held senior management and consultancy
roles within the commercial media sector in the United Kingdom, Europe and Asia. Details at
http://www.grantgoddard.co.uk
Low Digital Take-Up Of Local Commercial Radio Prevents Digital Radio Switchover In UK
©2012 Grant Goddard
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