Monday, February 9, 2009

Did the BBC and not Video kill the Radio Star?

Hayden's note:
I'm extremely please to have a guest posting this Monday morning, from Marc Ames, who is my friend and colleague at Ideal Interface.

I am sure that many of you in the UK were like me and the first thing you did every morning last week was check what the weather was like, and then put the television on and switched on the computer to check for weather forecasts and websites to see whether you would be able to make it into work or whether the kids’ schools were closed.

However, if you go back twenty five years ago then when the snow arrived everyone would be switching on to their local radio station – when the web was but a twinkle in Tim Berner-Lee’s eye and breakfast TV was still in its infancy.

As well as the wintry weather, last week saw the National Audit Office release a report commissioned by the BBC Trust into the efficiency of BBC Radio’s output.

Now in the style of the BBC television’s daytime output, how much do you think that the BBC spent on radio in 2007-08? Who will start me with £100m? £150m, £200m, £300m, £400m, £450m – and the final offer is £462m – 14% of the licence fee!

This covers the costs of the 10 network stations that broadcast UK wide (Radio 1, 2, 3, 4 et al) and the six national stations, two each for Scotland, Wales and Northern Ireland. It does not include the costs for running the 40 English regional stations.

So faced with that backing who would want to be a commercial radio operator? With the advent of the internet, the iPod, multi-channel TV, mobile phones, which sees advertising revenues fragmented further and companies demanding better evaluation for their £s – and yet radio has the most antiquated and archaic audience measurement tool – the RAJAR diary – which relies on people selected to fill in diaries about the times and stations they listen to.

When one diary can be the equivalent to thousands in audience, just to put into context about the research, I have been approached many times to take part in market research in towns or by phone, I have done jury service four times and yet I have never been approached to fill in a diary for RAJAR and I have never ever met anyone who has!

The industry has tried to grapple with this issue, especially as people now listen to radio stations online or on their mobile phone but have yet to resolve it.

Factor in the need for the radio industry to invest and pay for digital radio and yet one of the main areas for radio listening is in the car and the automobile industry have yet to commit building all new cars with digital radios and in the current climate this is not going to be high on their priorities then the future does not look bright. By the way, the BBC does not need to pay for carriage on any of the digital transmitters unlike their commercial rivals.

The relationship between OFCOM and commercial radio seems to be erratic, and that rather than moving with the times and creating a radio industry that is vibrant and strong, we have a media and a regulator that is struggling to cope with its place in a multi-channel market.

The irony is that if you listen to any commercial station these days, then two of the biggest advertisers are the Government’s COI and the local and regional councils.

Consolidation has been the word for many years in the industry and it now seems that within the next 12 – 18 months we will see the end game, with Global taking over GCap, Bauer taking over EMAP and some of the smaller radio groups are struggling or putting themselves up for sale, the heritage radio stations are or soon will become part of pseudo-national networks such as Smooth, Kiss and Magic.

So did the BBC indeed kill the radio star? As with all answers, there is not a simple yes or no. The problem lies in several areas, some of the commercial sector is poorly managed, and the regulator OFCOM has certainly not helped the industry move into the 21st century, for example, who else would think that a city the size of Bristol could sustain three commercial stations as well as BBC Bristol?

But the BBC has expanded and invested its output at a proliferate rate, unchecked by anyone and in filling in the vacuum created by the issues discussed above, may end up destroying most of its competition and indeed the media itself.


Marc Ames is an Online Marketing Consultant who is particularly interested in helping companies achieve maximum value from their online channels. His skills include: online marketing strategy, web site development, e-commerce, usability, search engine marketing, online advertising and media selection, e-mail marketing and affiliate marketing.
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