GCap changes
Big news from GCap Media this morning, although not totally unexpected they’re pulling back from all but their ‘core’ business, which really seems to be London and Classic FM. They’re in the process of selling their share in Digital One to Arqiva, closing their 2 remaining national DAB stations (thejazz and Planet Rock) and disposing of the 3 Xfm licences outside London, either through sale or a hand-back. I’m guessing Global Radio could be in the wings here.
Before their merger with Capital the GWR group had really pushed ahead with digital radio, pouring (probably) millions into getting going and keeping it going despite still rather slow growth, there’s still only a few million sets out there and only a small (but increasing) percentage listen via DAB. According the last RAJAR sweep (Q4 2007) 9.9% of the audience listen via DAB by the 22.3% who own a DAB set… so either half the people who own a set don’t use them, don’t report them or don’t know their listening to it. But then this is the problem with radio, we listen to it all over. I have a DAB radio in my kitchen and one by my bed. So my night-time, morning and ‘while I am cooking’ listening is all digital. I have sky in the lounge and use that for radio too (like 3.1% of the audience in Q4) BUT… I have a normal analogue radio in the car, so all the listening I did whilst driving about this weekend was analogue. Unlike TV, where I do 99% of my viewing in the front room with sky… in fact I have freeview in the bedroom, my girlfriend has digital tv and so do my friends. I can’t think of the last time I watched analogue TV. For DAB to really take hold we all need DAB everywhere and that will take a long time. And that’s a problem for radio even before we start the argument about how crap the actual DAB technology is!
So, can we blame GCap for this? Well, yes and no. In business if it’s not maxmising your profits it goes, whether you’re tescos, a media giant or the corner shop. But this is about developing a platform and yes, it is taking longer than some thought to make the kinds of dividends the city would hope for. DAB also faces unexpected challenges, with almost 2% is listening online. In Q4 RAJAR also report that 8.1 million people listen to radio online (live and listen again) EVERY week. Radio is in more places and whilst RAJAR says that this has a positive impact on radio generally it doesn’t do much for poor old DAB… and could still be replaced by the better DAB+ being use elsewhere in Europe or the much lauded DRM. So getting out now and focusing on the tried and tested and new, cheaper online platforms make economic sense.
There always a promise of ‘Jam tomorrow’ with DAB, the money WILL come when the audiences and there… thing is they’re taking too long. It’s been a waiting game and one that clearly GCap is bored with.
It is always a shame when a radio station closes, the people who loved it will feel lost, angry and a bit detached. The problem is however bad, unprofitable a radio station is someone will still love it… a bit like a dog with a gammy leg and no teeth. It’s no use to anyone but someone loves it. The thing is, I know lots of people who like Planet Rock and some who probably love it. So, it’s shame to lose it. I never listened and maybe I should have done but in all honesty it would have made no difference, as this is about strategy and GCap deciding where it wanted to be and that wasn’t owning a huge chunk of digital real estate and 2 national radio stations - it has already closed Core and Capital Disney.
My only hope is that the one decent station they do run, Fun Radio a joint venture with Hit Entertainment WILL continue. I like it, my kids like and if that means they’ll grow up with radio then that’s a good sign for the future of the medium, DAB of no DAB
Thanks for reading
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The problem with GCaps game plan is that they only wanted to recruit young listeners, as that is where the adverts are. Unfortunately, the people buying DAB sets tended to be older. People who own their homes and so on. GCap never really had a clue how to attract this younger audience. Perhaps we can pass on the bandwidth to others who are more likely to be creative with it?
Comment by Rob Watson — February 12, 2008 @ 11:57 am
Plus this could be as much about Fru Hazlitt fending off a hostile takeover from Global by putting Gcap in healthier financial as it is about saying something about their position on DAB and the future of the platform
Comment by Richard — February 12, 2008 @ 9:23 pm