MEDIA FORUM: Is commercial radio officially on the way down?

With commercial radio turning in yet another set of lacklustre Rajar audience figures, is the medium in the doldrums, Alasdair Reid asks.

In times of crisis, apparently, we turn to the BBC - or so you'd think if you believed elements of the commercial radio industry last week, when they were attempting to explain away the latest set of Rajar figures.

They're not spectacularly bad on the face of it, with the commercial sector's audience share versus the BBC declining by just one percentage point.

The explanation is simple. There was a war on. So we tended to tune in to the voice of the nation more than usual to hear how our boys and girls were doing. Plausible? Well perhaps. But the broader context puts a different shading on matters. Over the past half-dozen Rajar reports, stretching back over 18 months, commercial radio's share has increased on only one occasion - and we haven't exactly been in a state of crisis for the last year-and-a-half. Is radio about to run out of excuses?

If we don't watch out, the medium will have to reconfigure all its notions of its own historical destiny. You know - humble and quaintly shambolic origins in the 70s; growth in cover, audience and professionalism in the 80s; a growing sense of unity as a medium and marketing strength under the Radio Advertising Bureau a decade ago, which, coupled with the launch of national commercial stations, brought sustained advertising revenue growth. By the mid- 90s, the medium had pulled level with the BBC in audience share and was seemingly destined to eclipse the corporation, confirming its inexorable rise.

But has commercial radio stalled? Are the figures worrying for media owners and indeed the advertising industry? Phil Riley, the chief executive of Chrysalis Radio, says we shouldn't jump to any glib conclusions. You have to dig a little deeper beneath the top-line numbers. He states: "You have to unpack some of the broader demographic trends. In particular you should look at commercial radio's share of the 15 to 44 demographic. The vast bulk of revenues come from (ads targeting) this group so commercial radio tends to focus on it. But the demographic trend is against us in that respect because the population is ageing and moving away from us. We have to paddle twice as fast to keep up with the BBC because much of its output - Radios 2, 3 and 4, for instance - is rooted in reaching an older demographic."

Riley argues that the BBC is not just cashing a war dividend but is also reaping the benefits of two years of a more populist approach, especially on Radio 2. As Charter renewal comes closer we may find the BBC rediscovering its public service broadcasting roots.

"But if you take the long view we're actually in a very stable period. Nine years ago, commercial's share was maybe 35 per cent. Recently it has been around 45 per cent. If it has declined recently, the declines have been small. But, yes, perhaps we need something to jolt us out of that," he adds.

Like many in the commercial radio industry, Riley believes that the advent of digital will help. Digital listening is not yet comprehensively captured in the figures but if you look at the Emap stations, Smash Hits and Kerrang!, which are in this report, they have five million listening hours a week between them - equivalent to half a share point.

Mark Helm, the head of radio at MediaVest, agrees that BBC strength is a major factor here. "Not Radio 1 so much - it has had its own problems - but certainly 2 and 4," he says. "The war was a big factor last quarter. BBC national output is comparatively serious - it's broadsheet rather than tabloid and people tend to like that during a war."

Helm agrees we should feel heartened about digital. It will close the AM-FM gap (many local services and Virgin's national service are only available on crackly old AM) in terms of production values.

"But the big picture is that people aren't really tuning out of commercial radio. It continues to attract substantial audiences and the busier our lives get the more we'll be listening to radio - no matter what platform it's on," he argues.

But James Kydd, the brand director of Virgin Mobile, does not share this basically optimistic outlook. He concedes that a two or three percentage point fall in commercial radio's share of listening may not make a huge impact on its own but it may be symptomatic of a more deep-rooted malaise.

Recently, Virgin Mobile has been using radio only if it has a seriously good idea that will work on the medium - and mostly those good ideas have been for promotions rather than mainstream ad executions. "My feeling about commercial radio generally is that it has become a bit tired. It needs new ideas. You only have to look at the relative success of programming such as The Chart Show to see what can happen if you apply a bit of innovative thinking," he says.

Kydd concedes that BBC aggressiveness has gone beyond a joke but he says he admires the innovative spirit at both Radio 1 and Radio 2. "If you listen to the average commercial station for a couple of hours you become aware of the enormous degree of repetition there is. The same tracks come around over and over and the ads are a dominant feature of that repetitiveness too. You are pummelled by the same ones again and again. And it reminds you of breakfast TV in some ways - all those jolly, sofa-type presenters.

Capital's reliance on Chris Tarrant, for instance, is a sad indictment.

At least Jonathan Ross on Radio 2 is funny. With commercial radio, you just get bored. If you are using radio as an ambient medium there are channels on satellite TV that you could use just as effectively," he says.

Paul Davies, the director of operations at Capital, admits he shares the concerns voiced by many in the industry. "Obviously, for the health of the industry we want to create more product. Over the past few years, we've had a growth in revenue share for all sorts of reasons but creating more product is clearly one of those reasons and we would very dearly like to take audience share back from the BBC. The BBC is at its strongest when the media industry is having a rough time - it doesn't have to worry about its income, it doesn't have to seek permission to change formats and it has a huge ability to cross promote."

But Davies believes the commercial radio industry is up for the battle.

The BBC will have to act less aggressively to ensure its Charter is renewed, Davies agrees, but the industry can't depend on just that.

"Where the issue of cross-promotion is concerned, we are doing things such as X-Ray magazine. We are taking the stations we have and are putting them in front of people in lots more ways, which will give them greater recognition. Digital is important too. We have 20 analogue licences and 40 digital licences, which gives us the ability to grow and have more formats in more markets," he concludes.

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