3. Radio and audio 1 Figure 3.1 UK radio industry key metrics 2004-2009 UK radio industry 2004 2005 2006 2007 2008 2009 Weekly reach of radio (% of population) 90.3% 90.0% 89.8% 89.8% 89.5% 89.8% Average weekly hours per head 21.9 21.6 21.2 20.6 20.1 19.8 BBC share of listening 55.5% 54.5% 54.7% 55.0% 55.7% 55.3% Total industry revenue (£m) 1,158 1,156 1,126 1,175 1,131 1,092 Commercial revenue (£m) 551 530 512 522 488 432 BBC expenditure (£m) 607 626 614 653 643 660 Radio share of advertising spend 3.5% 3.3% 3.0% 2.9% 2.7% 2.8% DAB digital radio take-up (households) 5% 10% 16% 22% 30% 33% Source: Ofcom, RAJAR 2008 (adults aged 15+), BBC, WARC, radio operators 2008 Figure 3.2 Digital radio’s share of radio listening, Q2 2010 Year-on-year increase (percentage points) + 3.5 + 2.7 + 0.5 + 0.7 + 0.3 25 20 15 24.6 10 15.8 5 4.1 2.9 1.8 0 Digital radio platforms share of all radio hours hours radio all platformsofshare radio Digital All digital DAB DTV Internet Digital unspecified Source: RAJAR (adult listeners 15+), Q2 2010 Note: ‘Digital unspecified’ relates to listening to digital-only stations where the survey respondent has not specified the listening platform used. 3 Figure 3.3 Ownership of DAB set, Q2 2010 Percentage of adults who claim to own a DAB set / have a DAB set in the home 40% 30% 20% 33.0% 35.3% 27.3% 10% 20.3% 15.3% 9.1% 4.4% 0% Q2 2004 Q2 2005 Q2 2006 Q2 2007 Q2 2008 Q2 2009 Q2 2010 Source: RAJAR / Ipsos MORI / RSMB Q1 2004-2010. 4 Figure 3.4 Listening to podcasts Weekly podcasting (percentage adults) 8.1% 8.2% 8.6% 7.3% 7.1% 3.8% 0 Oct 2007 May 2008 Oct 2008 May 2009 Nov 2009 June 2010 Source: RAJAR / Ipsos MORI, ‘Measurement of Internet Delivered Audio Services (MIDAS 6)’, conducted during June 2010, and previously Nov 2009, May 2009, October 2008, May 2008, and October 2007. Figure 3.5 Proportion of listening time, by age and activity Live radio on a TV set 55+ Radio on a radio set Radio on a computer 45-54s Streamed music on a computer 25-44s Downloaded audio on a computer Downloaded audio on a mobile phone 16-24s Radio on a mobile phone ALL 16+ Streamed music on a mobile phone Audio on a music centre 0% 20% 40% 60% 80% 100% Radio on a handheld device Other audio on a handheld device Source: Ofcom research June 2010 Base = All respondent days: 16+ = 7966; 16-24s = 1106; 25-44s = 3003; 45-54s = 1484; 55+ = 2373 6 Figure 3.6 BBC and commercial listening / income, indexed against 2004 figures Listening hours and radio income / funding (as an index from 2004) 140 124.2 123.6 125.6 117.0 BBC radio expenditure 120 111.9 101.3 100.8 99.5 98.6 97.8 BBC radio listening hours 100 Commercial listening hours 97.2 94.7 80 96.2 95.4 89.6 89.9 92.9 92.9 Commercial radio revenues 60 88.6 40 78.4 20 0 2004 2005 2006 2007 2008 2009 Source: Listening data based on RAJAR (Adults 15+). Funding share data based on commercial radio revenues and estimated BBC expenditure on radio for 2009. Figure 3.7 Change in listening hours 2008-2009 All Radio All BBC All Commercial BBC network BBC local Nat commercial Local commerc Share of all 100% 55.3% 42.3% 46.6% 8.7% 10.6% 31.8% radio hours: 10% 5% 0.4% 1.1% 0% -0.4% 0.0% -1.2% Percentage change Percentage in hours listening -5% -3.2% -10% -9.0% Source: RAJAR, (all listeners aged 15+). Data based on calendar year 2008 - 2009 Figure 3.8 Changes in listening hours, 2009 vs. 2008, by age group radio hours: 93.0% 7.0% 11.4% 12.7% 16.5% 16.9% 35.5% All adults 15+ Children 4-14 15-24 25-34 35-44 45-54 55+ 5.8% 6% 4% 2.1% 2% 1.2% 0% -0.4% -0.4% -2% -4% -3.1% -4.2% -6% Percentage change in in change Percentage listening hours Source: RAJAR , data based on calendar years 2008 – 2009 Figure 3.9 UK commercial radio revenue and BBC radio spending £ million 1174 1,200 1076 1118 1126 1137 1092 Total 1,000 BBC expenditure (estimated) 800 652 649 660 Total commercial 588 614 600 525 National commercial 551 530 512 522 400 488 432 286 274 268 271 Local commercial 246 201 177 169 153 156 200 142 136 Commercial 100 94 0 88 87 91 96 sponsorship 2004 2005 2006 2007 2008 2009 Source: Ofcom / operator data / BBC, 2004-2009 Notes: BBC expenditure figures are estimated by Ofcom based on figures supplied by the BBC; figures in the chart are rounded. Revenue £m Share of all advertising Figure 3.10 UK radio advertising spend and share of display advertising, 2007 – 2009, (based on 2005 prices) Revenue £m Share of all advertising £1000m 4% Radio advertising expenditure Radio share of all media advertising £800m 2.9% 2.8% 2.8% 3% £600m 474 420 2% £400m 365 1% £200m £0m 0% 2007 2008 2009 Source: WARC (World Advertising Research Council), data based on constant 2005 prices 11 Figure 3.11 Commercial radio revenue per listener £ per listener 20 £17.60 £17.13 £16.59 £16.69 £15.70 15 £13.71 10 5 0 2004 2005 2006 2007 2008 2009 Source: Licensee revenue data and RAJAR listening data, 2004-2009 Figure 3.12 Recorded music retail revenues, 2006-2009 Revenues (£bn) 1.75 1.63 CAGR(%) 0.09 1yr 3yr 1.5 0.08 1.38 1.32 1.31 0.06 0.08 0.05 0.06 -0.8 -6.9 Total 1.25 0.10 0.13 1 12.7 -15.8 Music videos 0.75 1.45 27.4 15.6 Singles 1.23 1.17 0.5 1.13 -3.8 -8.0 Albums 0.25 0 2006 2007 2008 2009 Source: Entertainment Retailers’ Association yearbook, 2010. 13 Figure 3.13 Distribution of recorded music retail revenues, 2006-2009 Total recorded music revenues £1.54bn £1.32bn £1.27bn £1.26bn 100% 4% 8% 13% 19% Albums 80% Albums 50% 60% Singles 96% 92% 87% 81% Digital share 40% Singles 50% 20% Phsyical share Revenue share (%) Revenue 0% 2006 2007 2008 2009 Single/album split in 2009 Source: Entertainment Retailers’ Association yearbook 2010 Note: This chart does not include revenues from music videos. 14 Figure 3.14 Recorded music sales by volume, 2006-2009 Sales volumes (million units) 175 162.3 2.8 152.8 150 144.7 139.8 6.2 134.6 10.3 125 16.1 115.2 100 86.6 Digital 75 159.5 66.9 149.7 138.5 Physical 129.5 118.5 110.3 50 78.0 53.1 25 13.8 0 8.6 4.9 3.1 2006 2007 2008 2009 2006 2007 2008 2009 Albums Singles Source: Entertainment Retailers’ Association yearbook 2010 15 Figure 3.15 Digital music revenues by business model, 2006-2009 Revenues (£m) CAGR(%) 250 £236.8 1yr 5yr 14.3 22.9 200 37 78 Total £172.8 12.7 150 20.8 12 37 Mobile sub- scription £114.4 £92.5 12.1 10 48 Mobile DTO 100 189.6 15.7 22.0 £56.9 23.9 129.8 7 42 Online sub- 50 13.5 scription 13.2 72.1 £13.3 46.9 46 104 Online DTO 3.0 25.7 0 2004 2005 2006 2007 2008 2009 Source: Screen Digest Note: excludes revenue from ad-supported services. Due to different data sources this chart is not directly comparable with previous charts. 16 Figure 3.16 Number of commercial analogue stations owned, by group Lincs FM Guardian Media 3.8% 6-10 stations in group 4.5% UTV 14.8% 5.2% UKRD 3.8% 2-5 stations in group 12.4% Bauer Radio 14.1% Independent 18.6% Global Radio 23.0% Source: Ofcom, July 2010 Note: The percentages are derived from a universe of analogue stations rather than licences Figure 3.17 Share of all radio listening hours, Q2 2010 Percentage share of listening hours Orion, 1.0% Other, 8.9% Absolute, 1.1% UTV, 2.7% BBC network, 46.2% GMG, 4.3% Bauer, 10.7% Global, 16.6% BBC local/negional, 8.3% Source: RAJAR Q1 2010 Figure 3.18 Commercial radio: weekly audience reach, Q2 2010 Weekly UK audience reach 37.7% 25.2% 9.6% 7.0% 3.9% 2.5% 1.2% Annual change + 0.5pp + 0.5pp - 0.2pp - 0.1pp + 0.2pp n/a - 0.1pp in reach 20,000 40% 35% 15,000 30% (thousands) 25% 10,000 19,454 20% 15% Q2 2010 Q2 12,982 5,000 10% 4,952 3,608 5% 2,020 1,297 639 0 0% Global Bauer GMG UTV Absolute Orion Lincs FM Weekly reach Weekly Source: RAJAR Q2 2010, adults Figure 3.19 Weekly reach of BBC stations, Q2 2010 Average weekly listening (% UK adults), and year on year change BBC Radio 2 26.6% (+ 0.4%) BBC Radio 1 22.9% (+ 0.8%) BBC Radio 4 20.2% (+ 0.7%) BBC Local/Regional 17.7% (0.0%) BBC Radio FIVE LIVE 13.1% (+ 0.6%) BBC Radio 3 3.6% (- 0.3%) BBC World Service 2.5% (- 0.3%) BBC 6 Music 2.3% (+ 1.2%) BBC 7 1.8% (+ 0.2%) 1Xtra from the BBC 1.2% (- 0.1%) BBC Asian Network UK 0.8% (0.0%) 0% 10% 20% 30% Source: RAJAR Q2 2010, adults 15+ Figure 3.20 BBC network radio broadcast hours, by genre: 2009/10 Share of output (%) yr on yr -0.2% -0.6% -0.2% 0.4% 0.0% 0.1% 0.4% 0.3% -0.1% 0.1% 0.0% 60% 51.0% 40% 14.9% 20% 9.4% 6.0% 5.1% 2.7% 3.1% 1.5% 1.8% 1.5% 3.0% 0% Arts Sport Other Music Drama Factual Religion weather Children's News and News Entertainment Current affairs Current Source: BBC annual report 2009/10 Figure 3.21 BBC radio stations: cost per listener hour of programmes, 2009/10 Cost (pence) per listener hour, (and change year on year) BBC Radio nan Gàidheal 16.7 (-1.5p) BBC Radio Cymru 13.7 (+ 2.2p) BBC Radio Asian Network 8.5 (+ 1.6p) BBC Radio Scotland 7.8 (+ 0.7p) BBC Radio 3 6.3 (no change) BBC Radio Wales 5.9 (+ 0.9p) BBC Radio Uslter / Foyle 4.3 (- 0.1p) BBC 1 Xtra 3.6 (- 0.9p) BBC English Local Radio 3.2 (+ 0.3p) BBC Radio 6 Music 2.7 (- 0.7p) BBC Radio 5 Live 2.3 (no change) BBC Radio 5 Live Sports Extra 2.2 (- 0.4p) BBC Radio 7 1.7 (- 0.3p) BBC Radio 4 1.3 (no change) BBC Radio 1 0.6 (no change) BBC Radio 2 0.5 (no change) 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Source: BBC Annual report 2009/10 Figure 3.22 UK radio stations broadcasting on analogue, DAB digital radio, and community radio, July 2010 Type of station AM FM AM/FM DAB Total total Local commercial 31 203 234 139 267 UK-wide commercial 2 1 3 10* 10 BBC UK-wide networks 1 4 5 11 11 BBC local and nations 36 46 46 32 46 Community radio 4 172 176 0 176 Source: Ofcom, July 2010 TOTAL 74 426 464 192 510 Note 1: In total there are 288 individual analogue services on AM/FM as 36 simulcast over both AM/FM wavebands.