03 15-1200 patrick hannon - going for a digital future
TRANSCRIPT
3
The world in which radio competes is changing
•Media consumption habits are shifting
-especially younger listeners
•Greater competition for advertising revenues
•Analogue radio has limited ability to innovate
Digital music services with power to disrupt
4 Note: (1) French-speaking part
Sweden: planning for DAB+
Denmark: 34% have digital radio
Germany: DAB+ launch 2011
Norway: DSO planned for 2017
UK: 40% have digital radio
NL: planned migration to DAB+
Belgium1: creating DAB+ strategy
Switzerland: 25% have digital radioFrance: by end 2012,
10 cities DAB+
Across Europe, the footprint of digital radio is expanding
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Consumer Automotive
Benefits of experience
• Over 20% of listening is in-vehicle
• New cars: in UK, digital as standard
-Q4 2011, 21% of all new cars
-by 2015, 75-85%
• Other countries following, e.g. Toyota Lexus in Australia
• Aftermarket solutions being developed and refined
• Device prices falling
-Chip prices falling
-Economies of scale
-Jan 2013, DAB royalty ends
Newer territories can benefit from the experiences of other markets
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Sound &ease of use
ChoiceAdditional
functionality
Consumer benefits
• Lack of interference
• Clear, consistent sound
• Easy tuning
• Scrolling text / info
• Visuals
• Pause / rewind / record
• Detailed traffic info
• EPG
• Interactivity (smart radio)
• Extra stations
• Specialist stations (e.g. live sport)
• Pop-up / event stations
Listener benefits can be classed in three areas
8
Sydney analogue services Sydney digital services
17 services on AM and FM 40+ on DAB+
Digital radio offers listeners significantly greater choice
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• Exclusive live rights to German football
• Up to 5 matches simultaneously
Germany Australia Hong Kong
• Comedy radio station • Digital Money
-business news / stock market reports
-horse racing
Providing a range of new speech-based services…
10
UK Australia Germany
Electronic music
ClassicalJazz Country
Unsigned bandsClassic Rock
… and music services designed for the tastes of specific audiences
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Existing radio groups can retain share on digital radio
Share of listening by platform, %
Note: (1) includes analogue services broadcast on digital-only outside their analogue licence areaSource: RAJAR, PH analysis
98%83%
66%
19%
15%14%
3%2%
UK AM / FM UK DAB UK online
AM / FM services (simulcasts) Incumbent digital-onlyNew entrants and others
1
12
Geographic coverage
Develop portfolioDeepen user experience
Strategic options
• Extend beyond analogue licence area
• Value add through
-Text
-Visuals
- Interactivity
• Analogue stations in digital quality
• Niche and temporary stations
• Cross-promotion
How can digital radio build value for commercial broadcasters?
21 3
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First, digital radio can enable broadcasters to extend their geographic coverage – potential to create national brands
XFM – UK coverage
•XFM on FM in London and Manchester
-14m population
•XFM on DAB in many regions
-40m population
•Listening up by 22%
FM and DABDAB-only
14
Analogue and digital Digital-only services
Second, broadcasters can use digital to extend their brand portfolio
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Absolute Radio, weekly listening hours, m
11.4 11.3 11.1 11.6 11.6
1.2 2.04.412.6 13.3
15.5
19.020.3
8.77.4
Q4 09 Q2 10 Q4 10 Q2 11 Q4 11
Absolute Radio (core service) Absolute digital-only services
Source: RAJAR; four quarter moving average
Classic Rock and Extreme
80s replaces Extreme
Launch of 90s
Launch of 00s
+60%
New digital-only services have increased Absolute’s listening hours by 60% in two years
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Third, broadcasters can enhance the user experience – for example through colour screens
• Top-end devices typically over €150
• This year, in Germany, new colour screen devices will be available
-expected prices from ~€100
Revo Axis(launched 2009)
Pure Sensia(launched 2009)
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Stations in UK, Germany and Australia use colour images to provide information and cross-promote services
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Smart radio(connected)
New song
Advertising
Listen later
Looking ahead, smart radio (broadcast and IP) will provide new listener benefits - and create new revenue opportunities
2
1
3
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New song – no longer a passive relationship
•Hear new song on radio
•Use IP to
-access info
-add to playlist
-share with friends
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•Listening to programme is interrupted
•Tag and listen later
-same or different device
Listen later – on any connected device
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•Hear ad on radio / see visual display
•Use IP to
-access more information
-register interest
Hybrid radio gives access to online and mobile marketing budgets
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Collaboration between various industry groups, government and regulators is essential
Policy and regulation
Broadcasters & stakeholder
body
Network operators
Broad-casters
Consumer devices
Cars Retail Consumers
25
5.6
6.7
5.4
6.7
8.6
9.2
5.7 5.8
Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11
Radio 4ExtraRadio 7
Radio 7 / Radio 4 Extra weekly listening hours, m
The BBC has also seen significant benefits from co-branding, cross-promotion & smart scheduling
Note: rebranding coincided with increase in cross-promotion and greater emphasis on complementary scheduling Source: RAJAR
37%increase
Service rebranded1 April 2011