Media: All About ... The latest Rajar figures

Commercial radio faces a struggle against the BBC, Jane Bainbridge says.

The past three months have been tumultuous even by commercial radio's
rollercoaster standards. While commercial operators have had
consolidation in their sights, the signing of new breakfast presenters

has been more akin to the Premiership transfer market. This has taken

place against a backdrop of falling ad revenues (down 9.2 per cent year
on year for April to June 2005) and a future of more digital stations
fighting for listeners.

If GCap hoped the latest set of Rajar figures would help alleviate its
merger pains and bring some welcome good news, it will be disappointed.
With Ralph Bernard in sole control as the new chief executive, the City
may be happier with a clearly defined management team but it will not be
pleased with the GCap stations' performance.

The worst result was 95.8 Capital FM's slump: the former leader is now
third, behind Heart 106.2 and Magic 105.4 in the London commercial radio
share rankings.

This is a tough time for commercial radio, with the BBC continuing its
dominance and little sign of better times ahead. With Ofcom proposing up
to ten more national digital stations (much to Bernard's chagrin) this
fiercely competitive market is only going to get tougher.

1. These are a set of Rajar results GCap would probably prefer to
forget.

As Howard Bareham, the head of radio at MindShare, says, Capital's fall
from the top slot in London in terms of listener numbers is
"momentous".

Capital had 1.8 million listeners in the third quarter, compared with
almost 2.2 million in the same quarter the previous year. It was
overtaken by Heart, with 1.9 million listeners.

GCap could take some solace in London with a good performance from Xfm,
which increased its reach by 24 per cent on the past quarter to
628,000.

On a national level, Classic FM fared badly with both audiences and
share falling. Bernard admitted the results were "disappointing" and
said investment was being funnelled into its "priority areas".

2. Stations have been spending heavily in London to support their
breakfast shows. While Capital is down in London, both overall and in
its breakfast slot, Johnny Vaughan did cling on as the coveted
number-one breakfast show with 893,000 listeners. Heart was up both in
breakfast (883,000) and overall, with Jamie Theakston only 10,000
listeners short of Vaughan. Virgin's breakfast show had a large
year-on-year increase in reach, from 437,000 to 664,000.

3. Heart's strong performance was the jewel in Chrysalis' crown but its
Galaxy network also saw modest growth in its share, growing to 1.9 per
cent with 2.56 million listeners. The commercial network has four
analogue stations around the country as well as a UK digital
service.

4. This was Emap Radio's first Rajar since it bought Scottish Radio
Holdings in August. In London, Magic's share rose to 5.3 per cent with a
1.7 million reach while its national audience (via AM and Freeview)
remained static at 2.95 million and a 2 per cent national share.
However, Kiss' audience was down more than 10 per cent on the previous
year.

5. Digital is still a niche market. Ownership of digital radio at home
is increasing - 10.5 per cent of adults now own a DAB set, according to
Rajar - but the number of adults listening to digital-only services sits
at 4.1 million per week, compared with 3.2 million the previous year.
Bareham says: "Digital is a growing area but not fast enough - in-car
stereos are thin on the ground."

6. Radio and its listeners are adapting to a digital future and more
adults are tuning in via new technology. Rajar reveals that while only
6.1 per cent have listened via their mobile phones, 28.3 per cent have
on the internet, rising to 35 per cent via digital television.

7. Commercial stations are faced with an increasingly strong BBC. It
recorded a record 54.6 per cent market share, up from 54 per cent the
previous quarter.

8. Meanwhile, commercial radio has seen its share of the UK market drop
0.5 per cent to 43.5 per cent. George Howard, the joint head of radio at
OMD UK, is optimistic. "There is no reason for a continual decline. We
have yet to see the benefits in terms of programming from some of the
changes in structure (such as GCap)," he says.

WHAT IT MEANS FOR ...

COMMERCIAL RADIO

- These are very competitive times and the BBC continues to be a
formidable opponent, increasing both its hours and share. The
pessimistic viewpoint is that commercial radio will never claw back
share from the BBC.

- Changes are afoot but more time is needed for many of the effects of
consolidation among the companies to bed down. It will probably be next
year before the benefits of those changes begin to be seen.

- Commercial radio stations must "have a close look at what type of
programming they are offering", OMD's George Howard says.

ADVERTISERS

- The market is going to get more fragmented. This is both good and bad
news for advertisers. While it means clients will need a wider choice of
stations to reach the same number of people, the increasing number of
digital and niche stations will allow for tighter targeting of
groups.

- As each station fights for its position, this should lead to
innovation in programming and revenues. With the stations being more
evenly balanced, especially in London, where Heart, Capital and Magic
are fighting it out, the lack of a single dominant player could benefit
advertisers during negotiations.

- Advertisers will be pleased that commercial radio listening is up
among ABC1 adults, 15- to 24-year-olds and housewives.