MEDIA SPOTLIGHT ON: COMMERCIAL RADIO - Commercial radio fails to live up to its growth expectations. Will the digital revolution reinvigorate the sluggish sector, Alasdair Reid asks

When commercial radio ’overtook’ the BBC five years ago, the widespread assumption was that this was another marker in the inexorable rise of the commercial medium. This wasn’t just about overtaking, it was supposedly about ’preparing to supersede’. Whereas, in fact, it turned out to be overtaking as in the tortoise and the hare rather than as in the internal combustion engine replacing horse power.

When commercial radio ’overtook’ the BBC five years ago, the

widespread assumption was that this was another marker in the inexorable

rise of the commercial medium. This wasn’t just about overtaking, it was

supposedly about ’preparing to supersede’. Whereas, in fact, it turned

out to be overtaking as in the tortoise and the hare rather than as in

the internal combustion engine replacing horse power.



This has to be worrying for the commercial radio industry - an industry

whose brand proposition, its defining characteristic, has been dynamic

growth.



With the advent of national stations like Classic FM and Virgin, it

reached parity with the BBC in terms of presence on the dial.



Now we’d see if the commercial sector’s innovation, creativity, flair

and sheer drive and desire - much vaunted by many observers and

theorists at the time - would begin to tell.



The story it has told, though, has been inconclusive, with neither side

producing sustained dominance; and in the latest Rajar figures published

last week, the BBC was back on top. Listening share for all BBC stations

was 50.3 per cent; commercial radio weighed in at 47.8 per cent.



So perhaps it was no coinci- dence that the biggest noises being made in

the commercial radio sector last week were not about audiences but the

future impact of new technologies.



GWR, in announcing decent results, said it was focusing its efforts on

digital in the belief that this would be where the greatest growth

prospects were to be found - indeed, the new era is almost upon us with

the launch of the national commercial digital service, Digital One, on

15 November.



But is digital really going to provide commercial radio with its next

leap forward? Or does its faltering performance in the overtaking lane

underline some fundamental concerns for the medium’s future?



Justin Sampson, the operations director of the Radio Advertising Bureau,

says the medium is already winning the battle for future audiences

because it is succeeding in targeting the all-important 15- to

44-year-old age group, where commercial radio has a 77 per cent share.

He also maintains that commercial radio’s great leaps forward have come

at times when it has increased its share of the dial.



Digital, Sampson argues, will see commercial radio competing on a level

playing field for the first time. He says: ’With digital, commercial

radio will be able to compete equally with the BBC for the first time on

a national basis - by 2000, we will have six national stations and they

will have five.’



But some sources insist that the commercial sector shouldn’t take its

eye off the ball.



Robert Ray, the joint managing director of MediaVest, comments: ’The BBC

thing is a barometer but I think people get preoccupied with it. The

most important thing from the advertisers’ point of view is whether the

commercial sector is losing audience year on year. If it doesn’t deliver

audience, the prospect of inflation rears its ugly head.’



Radio treats its best customers extremely well - while a select few of

the medium’s longest, biggest and best supporters are cushioned, the

worst effects of inflation are loaded on to the broad rump of the

medium’s less-favoured customers.



Some observers believe that’s a dangerous policy. But it’s not a real

problem if you have faith in growth. Unfortunately, even if digital has

the potential to deliver that growth, it isn’t going to happen

overnight. And there are those who doubt the wisdom of putting your

faith in technology rather than programming excellence and brand

development.



Ray says: ’Digital will offer better sound quality but the public isn’t

going to listen to more radio because the sound quality is better -

they’ll only do so if the licences bring something new in terms of

programming.



We’re waiting to see evidence of that. Possibly the biggest thing that

digital will bring is more fragmentation. Will that mean more revenue

for commercial radio? I suspect not.’



Topics

Become a member of Campaign

Get the very latest news and insight from Campaign with unrestricted access to campaignlive.co.uk , plus get exclusive discounts to Campaign events

Become a member

Looking for a new job?

Get the latest creative jobs in advertising, media, marketing and digital delivered directly to your inbox each day.

Create an alert now

Partner content