Radio industry saved by growth of online sector
The talk of the radio industry in recent weeks involved Brian May and his quest to buy troubled GCap Media-owned radio station Planet Rock. Although the bid ultimately proved unsuccessful, it highlighted the changing face of this deeply personal media sector that, as lamented on the disgruntled former Queen guitarist's blog, "is now run by large corporate organisations for the purpose of making tons of money."
Despite May's nostalgia for the UK radio industry of yesteryear, the medium is at a point where it's regaining its financial footing after a few slippery years. Some of its current success stems from the growth of online. In April 2008 ComScore's online radio category attracted nearly 10m unique visitors, representing a significant incremental audience to the existing offline listener base.
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While Planet Rock's online decline is a microcosm of the dwindling interest in the station as a whole (the number of unique visitors to planetrock.com fell 21% during the past year), other GCap-owned properties have been performing very well. During the past year, capitalradio.co.uk grew 37% to 179,000 unique visitors, 105centuryfm.com grew 21% to 34,000, and musicradio.com was up an impressive 341% to 348,000. The overall online audience for GCap Media sites was 1.2m visitors in April 2008 (up 19%), ranking it as the UK's third most popular online radio property.
Another major corporate media conglomerate, the BBC, leads the charge in the online radio category with 4.6m unique visitors, or about one out of every seven UK internet users. And following the launch of the iPlayer in December 2007, this audience is likely to grow even larger in 2008.
In terms of its online popularity, the online radio sector still lags behind its long-established rivals. While its overall audience of nearly 10m unique visitors is substantial, it trails TV with 18.8m, newspapers with 14.8m and even entertainment news with 10.8m. Its relative position is not surprising for a medium that accounted for just 3.3% of total UK ad spend in 2007 (according to PricewaterhouseCoopers/Advertising Association/Internet Advertising Bureau/ WARC/Radio Advertising Bureau), the second smallest share among advertising media.
However, radio will always be an attractive medium for advertisers seeking cross-channel distribution, because ads are effortlessly embedded within broadcast content and require no additional adaptation for online.
At the risk of further upsetting the former Queen guitarist, expect to see the corporate media that can take advantage of the online distribution channel grow as they attract larger online audiences.
Jack Flanagan is executive VP of ComScore
