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Digital Radio In The UK: Progress & Challenges Product Image

Digital Radio In The UK: Progress & Challenges

  • Published: June 2009
  • Region: United Kingdom, Great Britain
  • 71 Pages
  • Grant Goddard

The Digital Radio In The UK report analyses the progress made to date in the United Kingdom with the migration of radio broadcasting from analogue to digital transmission platforms. It also examines the challenges that need to be overcome in order to successfully complete consumers’ migration from analogue radio to digital radio in the UK market. The report presents data, tables and graphs in a presentation format that together provide a comprehensive snapshot of the market for digital radio broadcasting in the UK.

The report’s overview analyses radio listening by analogue and digital platforms for commercial radio and BBC radio in the UK market. It also documents the growth in personal ownership of Digital Audio Broadcasting (DAB) radio receivers and the growth in sales volumes of DAB receivers.

The report goes on to analyse a range of forecasts published by different agencies regarding digital radio listening and DAB receiver penetration in the UK market, and then compares them with the latest actual data.

The final, most substantial part of the report identifies more than twenty challenges that need to be overcome to achieve successful migration of READ MORE >

OVERVIEW
Percentage of adults in UK with a DAB radio receiver at home
Percentage share of hours listened to BBC radio in UK by platform
Percentage share of hours listened to commercial radio in UK by platform
Cumulative UK sales of DAB radio receivers

FORECASTS
DAB radio receiver penetration in UK
Cumulative UK sales of DAB radio receivers
Digital platforms percentage share of total UK radio listening
Digital platforms percentage share of UK commercial radio listening
Digital platforms percentage share of total UK radio listening (2)
DAB radio receiver volume sales as percentage of total UK radio receivers sold

CHALLENGES
Percentage of UK households with access to digital radio platforms
Percentage of UK adult take-up of digital radio services
Percentage share of hours listened to BBC radio in UK by platform
Percentage share of hours listened to commercial radio in UK by platform
Percentage weekly reach of radio platforms amongst UK adults
Ownership of analogue radio receivers in UK households
Percentage and volumes of digital/analogue radio receiver sales in UK
Quarterly DAB radio receiver sales volumes in UK
Intention of purchasing DAB radio receiver within next six months in UK
Availability of radio platforms within mobile phone models sold in UK
Usage of mobile phone features in UK
Forecast of global FM-capable handset market
Average number of radio stations listened to in UK by region
Consumer satisfaction with available choice of radio stations in UK
DAB radio set penetration by local DAB multiplex area in UK
Timetable of Ofcom licence awards for local commercial DAB multiplexes
Comparative geographical coverage of DAB multiplexes in UK
Factors persuading consumer purchase of DAB radio receiver in UK
Adult listening to commercial digital-only radio stations in UK
Adult listening to BBC digital-only radio stations in UK
Adult listening to national digital and analogue UK radio stations
Availability of DAB radio services by service area
Number of DAB-only radio stations available in UK
Location of adult UK radio listening
BBC digital radio stations share of listening by platform in UK
DAB awareness and ownership in UK
Age profile of DAB radio receiver ownership in UK
Electronic equipment available from UK retailers incorporating radio platforms
Estimated cumulative expenditure on DAB in UK

Many territories are considering public policies that will migrate their radio broadcasting system from analogue (AM and FM) to digital transmission. There are important lessons that can be learnt from the experiences of the United Kingdom, which publicly launched the Digital Audio Broadcasting (DAB) terrestrial platform for radio in 1999.

The UK market is widely regarded as the most advanced market for digital radio in the world, with digital platforms accounting for 20% of all radio listening, and with more than 9 million DAB radio receivers sold to date. Although these figures are impressive, the growth trend has remained stubbornly linear in recent years and now seems unlikely to demonstrate the exponential increases which prove necessary to fulfil a complete consumer migration to digital radio within the anticipated timeframe.

The heart of the problem is that DAB radio receivers are not considered a ‘must have’ consumer purchase by significant sections of the UK population, particularly young people. Only 22% of new radios sold in the UK incorporate DAB reception capability, and the majority of DAB radios currently on sale also include FM analogue radio reception. As a result, large numbers of new analogue radios continue to be added to the substantial legacy of old analogue radios already in the UK market.

The prospect of being able to listen to exclusively digital content on the DAB platform is not motivating consumers sufficiently to purchase DAB radio receivers. In fact, the data demonstrate that consumers who have access to digital radio platforms are mostly listening to content which is already available to them on analogue radio, a phenomenon that has led to the closure of many advertising-funded digital-only radio services in the UK market.

Q4 2008 was the first quarter in which the year-on-year growth in volume sales of DAB radio receivers in the UK moved into negative territory, notable because the Christmas gift market still remains the hardware’s main sales opportunity. At the same time, FM radio is becoming an increasingly common feature in ‘smartphones’ and all types of handheld devices, a market which the DAB platform has not yet penetrated. The lack of listening mobility offered by DAB radio is reinforced by the tiny proportion of the UK’s car stock that is equipped with DAB radio receivers.

Furthermore, the significant investments required to date of the UK radio industry in the DAB platform have helped to reduce the present aggregate profitability of the commercial radio sector to zero. The problem is that DAB radio has achieved a measure of success in the UK, but that success has not been sufficiently large to make the platform a profitable venture, even after a decade. Instead, DAB is continuing to make a substantial financial impact on a commercial radio sector already having to make difficult structural adjustments to address falling listening and declining revenues.

The DAB platform which, a decade ago, had been embraced by UK commercial radio owners as a potential opportunity to profit from the impact of digital media on consumers’ lives, is now seen more as a ‘problem’ and as a balance sheet liability. With complete consumer migration from analogue to digital radio now looking less likely, radio owners are trapped in a situation where they are forced by the regulatory framework to continue to meet the expenses of dual transmission on both analogue and digital platforms without the benefit of an end-date.

The UK experience demonstrates that the challenges inherent in migrating consumers from analogue to digital terrestrial broadcast platforms are much greater than simply making digital radio receivers available within the market and broadcasting some content on the digital radio platform. Using data from the UK market, this report highlights the many issues that need to be considered in formulating an integrated strategy to successfully launch a new digital platform for radio broadcasting.

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