Commercial radio is starting to eat itself, according to the latest audience figures from industry research body Rajar. Having taken a steady stream of listeners from BBC Network Radio over the past five years, it seems the commercial stations are now taking listeners from each other.
In the Midlands, the Rajar figures show Heart 100.7, with a weekly “reach” (the numbers who listen to a station for at least five minutes a week) of 504,000, has overtaken its local pop music rival 96.4 FM BRMB. But local public service station BBC Radio WM has been left with its 2 miilion audience intact.
Deborah Goodman, head of radio implementation at media buying company CIA, says: “We’re beginning to see the cannibalisation of the commercial market. Principally we see it happening from FM independent local radio stations in the same areas.”
This set of Rajar results, which measure the performance of radio stations for the last three months of 1997, show a continuing tug of war between BBC radio and commercial radio for audiences.
Commercial radio is in the lead with 49.7 per cent of listening time, compared with the BBC’s 47.9 per cent. The BBC may take heart from the figures as commercial radio’s lead has dropped from 2.5 to 1.6 per cent compared with the previous quarter.
On the other hand, it is the first time the commercial stations have held their lead over the BBC for a whole year. However, the Radio Authority will grant between 25 and 30 additional full eight-year local and regional licences, including regional licences this summer for the North-east and another for central Scotland. These will add to the 170 existing commercial stations already on air in the UK.
Critics wonder where the audiences for this stream of new stations will come from – the BBC, other commercial rivals or from new listeners.
Commercial radio has failed to establish clear blue water between itself and Auntie’s original medium. For the last three years both networks have skirmished at around the 49 to 50 per cent mark in a battle to establish market leadership.
Compare this with the great strides commercial radio made in the early part of the decade. In 1992 BBC Radio, and Radio 1 in particular, started to make the painful transition towards appealing to younger or more tightly defined audiences. Commercial radio capitalised on the changing equilibrium of the market as the BBC haemorrhaged listeners. In 1992 BBC radio held a 58 per cent share of all listeners, to commercial radio’s 37 per cent (the remainder being made up of pirate stations, which are too small to be individually measured by Rajar). By 1994 commercial radio had overtaken the BBC with 49 per cent of all listeners, while the public service broadcaster mustered 48 per cent.
Jonathan Gillespie, head of radio at BMP Optimum, comments: “Historically commercial radio has taken listeners from the BBC. It will be interesting to see if this year the trend will continue, or whether it will begin to cannibalise itself.”
Predictably, the commercial stations do not think the crunch is coming yet. Malcolm Cox, marketing director of EMAP On Air, which owns 19 local radio stations principally in the North-west, says this issue is some way off because of the way the Radio Authority grants licences: “The remit of the Authority is to extend choice. So licences are given to complement existing stations,” he says. This measure is designed to avoid direct competition between commercial stations, ensuring more choice for listeners and less danger of new stations taking listeners from existing ones.
Mike Gorman, media director of Saatchi & Saatchi, disagrees that there is really much difference between the commercial stations. He believes that there is still potential for commercial radio to take share from the BBC. However, this can only be done if the sector moves away from the pop and chat format. “Commercial radio offers the same diet,” adds Gorman. “There is very little that is dramatically different.”
But the commercial stations have the resources to stop new stations eating into their share of listeners.
One way to avoid cannibalising commercial audiences may be to develop more stations and shows as brands. BMP Optimum’s Gillespie says that out of the 170 stations in the country only three – Kiss 100 FM, Classic FM, and Capital Radio London – can be classed as brands. These stations have among the largest shares in their markets, having engendered loyalty among their listeners.
The growth of syndicated shows, like the Pepsi Chart can provide commercial stations with high quality programmes at affordable prices. Syndicated formats such as Capital Gold’s roll-out in Birmingham, Sussex, Hampshire and Kent, are other ways the commercial sector can grow while keeping costs down.
Observers also welcome plans to experiment with “masthead” radio. Radio stations will team up with magazines to produce programmes with ready-made audiences. EMAP On Air is looking at joining forces with FHM and Empire, while Talk Radio is considering making programmes under the Good Housekeeping name (MW December 11 1997).
If commercial radio is not to devour itself, it will need to act like any producer facing a saturated market. The station needs greater differentiation, new programme for mats and fresh ideas to see off the threat of an overcrowded market and a revitalised BBC.
Torin Douglas, page 19