Radio - UK

Published by: Mintel International Group Ltd.

Published: Feb. 1, 2008 - 91 Pages

Table of Contents

Issues in the Market

Main issues

Definition

Abbreviations

Market in Brief

Radio targets ‘Third Space’

Two beneficial triangles: Mobile-MP3-radio, ‘hear-like-buy’

The DAB debate

Brand extension: long-term fixture or digital battering ram?

The new digital divide

Switch off from work, switch off from radio

MP3 diverts youth

The Trojan horse of new technology

Radio online: threats and opportunities

Increased competition hits commercial sector

Internal Market Environment

Key points

Interest in radio

Figure 1: Radio listening, 2003-07

Listening habits

Figure 2: Radio listening trends, 2003-07

Figure 3: Average weekday reach of radio and television, by daypart, Q2 2007

Platform proliferation: radio’s ‘third age’

Figure 4: Digital platform shares, 2007

Figure 5: Devices used to listen to radio, June 2007

Podcasting

Demand for radio on portable devices

Figure 6: Interest in media on portable devices, February-June 2007

Mobile phones

Figure 7: Listening to radio via mobile phone, 2002-07

MP3 players

Figure 8: Use of MP3 players for podcast listening, 2006-07

UK goes digital

Figure 9: Ownership of DAB radios at home, 2004-07

The end of analogue?

Switch-off consumer-led

Not all thumbs up for digital

Figure 10: BBC digital station reach, 2006-07

Technological convergence, brand divergence

Figure 11: Method of listening to music nowadays, July 2007

Broader Market Environment

Key points

Population structure

Figure 12: Trends in the age structure of the UK population, by gender, 2002-12

Socio-economic structure

Figure 13: Forecast adult population trends, by socio-economic group, 2002-12

Employment

PC ownership

Figure 14: Household ownership of PCs, 2003-07

Portable device ownership

Mobile phones

Figure 15: Mobile phone ownership, 2003-07

MP3 players

Figure 16: MP3 player ownership, 2003-07

Figure 17: MP3 player ownership among music consumers, 2005-07

Figure 18: MP3 player ownership, by demographic 2005-07

Internet penetration

Figure 19: British Internet penetration at home/work/place of study or elsewhere, 2001-07

Methods of buying music

Figure 20: Value sales of pre-recorded music, 2004-06

Figure 21: Attitudes towards downloading music to mobile phones, 2006 and 2007

Consumer mobility

Figure 22: Average hours per week spent travelling, by mode of transport, 2003-07

Competitive Context

Key points

Internal competition

The commercial sector vs the BBC

Channel 4 enters the fray

BBC facing reduced resources

Commercial sector networks for success

External competition

Figure 23: Entertainment habits, 2003-07

Internet poses greater direct threat to television…

…but opens the door to a new breed of radio competitors

MP3 stalks 4x4

Competition for advertisers

Figure 24: Total UK adspend, by medium, 2004-06

Strengths and Weaknesses in the Market

Strengths

Penetration rates

Opportunities of new platforms

Versatility

Cost

Positive consumer attitudes

Weaknesses

Losing touch with teens

Listening habits are hard to change

Funding

New platforms pose new threats

Digital costs

Market Size and Forecast

Key points

Listeners spoiled for choice

Figure 25: Radio listening, quarter 3, 2002-12

Figure 26: Hours of radio listening, quarter 3, 2002-07

Radio forced to look beyond the spot

Figure 27: Commercial radio revenues, 2002-07

The future: More choice, more competition

More words from our sponsors

Switch-off the trigger for take-off?

Segment Performance

Key points

No break for commercial radio

Figure 28: Radio listening, BBC and commercial broadcasters, 2002-07

National stations gain ground

Figure 29: Radio listening, national and regional stations, 2002-07

Danger of digital cannibalism

Figure 30: Digital listening, 2007

Market Share

Key points

BBC retains dominant position

Figure 31: Radio market share of listening hours, 2002-07

Global eyes top spot

Figure 32: Commercial radio group share of listening hours, 2004-07

Known brands give head start in digital space

Figure 33: Reach of digital-only radio stations, 2007

Figure 34: Digital-only radio stations’ listening hours, 2006-07

Brand Communication and Promotion

Key points

Fluctuating adspend is campaign-led

Figure 35: Adspend by leading radio broadcasters, 2003-07

Cross-group promotion gains currency

Above-the-line still the main route to the mass market

Below-the-line activity builds station brands

Branding

Event marketing

Companies and Products

Key points

Industry keen on consolidation

Bauer Radio

Figure 36: Emap Radio financials, 2005-06-2006-07

BBC Radio

Figure 37: BBC Radio, average 15-minute reach, 2004-05-2006-07

Licence fee disappointment

Figure 36: BBC licence fee distribution, 2006-07

GCap Media

Figure 38: GCap Media plc financials, 2005-06-2006-07*

Global Radio

Figure 39: Chrysalis Radio financials, 2005-06-2006-07

GMG Radio

Figure 40: GMG Radio financials, 2005-06-2006-07

SMG

Figure 41: SMG radio financials, 2006-07 (first half only)

Radio Listening Habits

Key points

How often do consumers tune in?

Figure 63: Frequency of listening to the radio, December 2007

Who listens?

Changing listening habits?

Figure 64: More or less radio listening, compared with two years ago, December 2007

Who’s tuning in, who’s tuning out?

Listeners’ Choice of Platforms

Key points

How are consumers tuning in?

Figure 65: Radio listening platforms, December 2007

Who’s on what platform?

Infrequent listeners show interactive potential

Figure 66: Radio listening platforms, by frequency of listening to the radio, December 2007

New platforms the driver for increased listening

Figure 67: Radio listening platforms, by whether listen more or less than two years ago, December 2007

Analogue and DAB the ‘primary’ platforms

Figure 68: Combinations of radio listening platforms, December 2007

Appendix - Radio Listening Habits

Who listens?

Figure 78: Frequency of listening to the radio, by demographic sub-group, December 2007

Who’s tuning in, who’s tuning out?

Figure 79: More or less radio listening, compared with two years ago, by demographic sub-group, December 2007

Appendix - Listeners’ Choice of Platforms

Who’s on what platform?

Figure 80: Radio listening platforms, by demographic sub-group, December 2007

Appendix - Attitudes Towards Radio

Attitudes to radio by demographics

Figure 81: Agreement with most popular statements about radio listening, by demographic sub-group, December 2007

Figure 82: Agreement with next most popular statements about radio listening, by demographic sub-group, December 2007

Appendix - Radio Target Groups

Radio Target Groups - Detailed Demographics

Figure 83: Radio target groups, by demographic sub-group, December 2007

Abstract

The UK radio industry is approaching a crossroads: it has more platforms available to it than ever before, meaning it faces more opportunities and more threats and some difficult and far-reaching decisions over its future direction.

Digital broadcasting is already beginning to change in-home listening patterns, but radio also has real potential to engage consumers in the potentially lucrative out-of-home ‘Third Space’ and is well-placed to take a central position on the converged mobile devices of the future. On the other side of the coin, new digital technologies are exposing it to new levels of competition from new sources, while it must also adapt to wider changes in media consumption patterns.

This report assesses how radio is approaching these challenges and opportunities by examining and testing the hypothesis that: “the emergence of new radio platforms is changing fundamentally the way consumers engage and interact with the medium, but is not yet attracting new listeners to the extent that was hoped.”

Key themes:

• How are radio listening habits changing with the growth of digital radio and an increasing variety of listening platforms?
• Is radio listening becoming more interactive?
• How is radio competing with other entertainment media?
• How effectively does the radio industry promote itself?
• How is the structure of the industry changing?

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