The past three months have been tumultuous even by commercial radio's rollercoaster standards. While commercial operators have had consolidation in their sights, the signing of new breakfast presenters has been more akin to the Premiership transfer market. This has taken place against a backdrop of falling ad revenues (down 9.2 per cent year on year for April to June 2005) and a future of more digital stations fighting for listeners.
If GCap hoped the latest set of Rajar figures would help alleviate its merger pains and bring some welcome good news, it will be disappointed. With Ralph Bernard in sole control as the new chief executive, the City may be happier with a clearly defined management team but it will not be pleased with the GCap stations' performance.
The worst result was 95.8 Capital FM's slump: the former leader is now third, behind Heart 106.2 and Magic 105.4 in the London commercial radio share rankings.
This is a tough time for commercial radio, with the BBC continuing its dominance and little sign of better times ahead. With Ofcom proposing up to ten more national digital stations (much to Bernard's chagrin) this fiercely competitive market is only going to get tougher.
1. These are a set of Rajar results GCap would probably prefer to forget.
As Howard Bareham, the head of radio at MindShare, says, Capital's fall from the top slot in London in terms of listener numbers is "momentous".
Capital had 1.8 million listeners in the third quarter, compared with almost 2.2 million in the same quarter the previous year. It was overtaken by Heart, with 1.9 million listeners.
GCap could take some solace in London with a good performance from Xfm, which increased its reach by 24 per cent on the past quarter to 628,000.
On a national level, Classic FM fared badly with both audiences and share falling. Bernard admitted the results were "disappointing" and said investment was being funnelled into its "priority areas".
2. Stations have been spending heavily in London to support their breakfast shows. While Capital is down in London, both overall and in its breakfast slot, Johnny Vaughan did cling on as the coveted number-one breakfast show with 893,000 listeners. Heart was up both in breakfast (883,000) and overall, with Jamie Theakston only 10,000 listeners short of Vaughan. Virgin's breakfast show had a large year-on-year increase in reach, from 437,000 to 664,000.
3. Heart's strong performance was the jewel in Chrysalis' crown but its Galaxy network also saw modest growth in its share, growing to 1.9 per cent with 2.56 million listeners. The commercial network has four analogue stations around the country as well as a UK digital service.
4. This was Emap Radio's first Rajar since it bought Scottish Radio Holdings in August. In London, Magic's share rose to 5.3 per cent with a 1.7 million reach while its national audience (via AM and Freeview) remained static at 2.95 million and a 2 per cent national share. However, Kiss' audience was down more than 10 per cent on the previous year.
5. Digital is still a niche market. Ownership of digital radio at home is increasing - 10.5 per cent of adults now own a DAB set, according to Rajar - but the number of adults listening to digital-only services sits at 4.1 million per week, compared with 3.2 million the previous year. Bareham says: "Digital is a growing area but not fast enough - in-car stereos are thin on the ground."
6. Radio and its listeners are adapting to a digital future and more adults are tuning in via new technology. Rajar reveals that while only 6.1 per cent have listened via their mobile phones, 28.3 per cent have on the internet, rising to 35 per cent via digital television.
7. Commercial stations are faced with an increasingly strong BBC. It recorded a record 54.6 per cent market share, up from 54 per cent the previous quarter.
8. Meanwhile, commercial radio has seen its share of the UK market drop 0.5 per cent to 43.5 per cent. George Howard, the joint head of radio at OMD UK, is optimistic. "There is no reason for a continual decline. We have yet to see the benefits in terms of programming from some of the changes in structure (such as GCap)," he says.
WHAT IT MEANS FOR ...
- These are very competitive times and the BBC continues to be a formidable opponent, increasing both its hours and share. The pessimistic viewpoint is that commercial radio will never claw back share from the BBC.
- Changes are afoot but more time is needed for many of the effects of consolidation among the companies to bed down. It will probably be next year before the benefits of those changes begin to be seen.
- Commercial radio stations must "have a close look at what type of programming they are offering", OMD's George Howard says.
- The market is going to get more fragmented. This is both good and bad news for advertisers. While it means clients will need a wider choice of stations to reach the same number of people, the increasing number of digital and niche stations will allow for tighter targeting of groups.
- As each station fights for its position, this should lead to innovation in programming and revenues. With the stations being more evenly balanced, especially in London, where Heart, Capital and Magic are fighting it out, the lack of a single dominant player could benefit advertisers during negotiations.
- Advertisers will be pleased that commercial radio listening is up among ABC1 adults, 15- to 24-year-olds and housewives.