DAB - UK PERSPECTIVE Agenda

1. Overview of

2. Current state of UK Radio

3. DAB - Lessons learnt

NATIONAL BRANDS LOCAL RADIO WIRELESS STUDIOS DAB MULTIPLEXES NATIONAL BRANDS LOCAL RADIO

GREAT BRITAIN IRELAND SERVICES INTERNATIONAL SYNDICATION

is the global audio partner of the English Premier League SIX LANGUAGES Examples of partners in region English Arabic Spanish Swahili Mandarin Malay talkSPORT South Africa

• Minority partner in JV consortium

• SA’s first 24-hour sports radio station

• Huge potential audience

• Distribution via: • AM in Gauteng • webstream (app and website) • DAB+ ? DAB MULTIPLEXES SNAPSHOT OF UK RADIO UK Radio is in good health

• Record levels of listening

• Unprecedented choice of stations

• Robust revenues

Commercial radio weekly reach at all-time high

37,000

36,000

35,000

34,000

33,000

32,000

31,000 Weekly Reach (000s) Reach Weekly 30,000

29,000

28,000

27,000

Source: RAJAR All BBC Radio - Reach All Commercial Radio - Reach 51% of all radio listening is via digital platforms

Source: RAJAR Q1 2018 90% of new cars fitted with DAB as standard

Source: CAP/SMMT Q1 2018 In analogue BBC had the lion’s share of spectrum DAB has brought about an explosion of choice DAB levelling the playing field

70%

65%

60%

55%

50%

45%

40%

35%

30%

BBC share of All Radio listening - DAB platform only Commercial share of All Radio listening - DAB platform only Robust UK commercial radio revenues 200

180

160 140 120 100 80 60

40 UK Radio Industyr Revenue (£m) UKRadio Revenue Industyr 20 0

Source: Local National Branded Content Digital Digital technology a critical driver New competition in audio media Radio still holding its own

Live radio

Source: RAJAR Midas Spring 2018 …even among younger demographic

15-24s 82%

25-34s 86% Live Live 35-54s 93% radio radio Music Music streaming streaming 55+ 92%

75 80 85 90 95 SOME KEY LESSONS LEARNT The power of brands

New formats Brand extensions Off-set dual-tx costs

• Broadcasters as mux operators

• Control over key broadcast distribution platform

• Ability to off-set network costs with third party leased capacity

Structure regulation to provide incentives

• Public policy objectives

• Designing the licensing framework

• Mux licence conditions Keep the engineers in check !

• Get priorities right

• Remember you’re a platform provider • “Listen to your customers” • “Give them what they want” Diminishing marginal returns from network expansion

100%

95%

90%

85%

80%

75%

70%

UK Household Coverage (%) Coverage Household UK 65%

60%

55%

50% 0 100 200 300 400 500 600 700 800 900 Number of transmitter sites So, in a nutshell…

Broadcasters: • Embrace the competitive challenge • Be patient

Policy-makers: • “Radio isn’t TV” • Be clear about the endgame

Engineers/mux operators: • Don’t over-engineer networks • Don’t be greedy!