dab digital radio uk market update mike spencer marketing director drdb
TRANSCRIPT
DAB Digital RadioUK Market Update
Mike SpencerMarketing Director DRDB
DRDB - Who We Are
BBC
Digital OneEmap
Capital
MISSION: to ensure digital radio's wide accessibility and swift adoption in the UK
MXR
GWR
• Understand the DAB market
• Promote to the consumer
• Support retailers
• Encourage & assist manufacturers
DRDB - What do we do?
DAB For consumers it’s all about
station choice
275 analogue services
As of 30 April 2004. Analogue figure – Ofcom (licences awarded)
398 DAB servicesAnd 2 multiplexes yet to launch, so over 400 by the end of this year
55% (or 217 services) - only available with a DAB radio
181 services - straight analogue simulcast
comprising….
E.G.Bristol Analogue Radio
National Regional Local
E.G. Bristol Digital Radio
National Regional Local
71
44
40
38
21
15
9
9
8
7
5
5
2
0 10 20 30 40 50 60 70 80
To receive new digital stations
To receive improved reception of existing stations
Sound quality
Price
Product appearance/design
Easy to tune
Programme content
Size
Other
Recommendation by friends/relatives
Brand
Text and information
Recommendation of salesperson
apr-may 04
% of card returns
Source: Claritas post-reg cards
Q. Which factors influenced you to buy DAB over analogue?
Copyright: DRDB
Brand very gradually becoming more of a factor?
Consumers are buying DAB for the new digital stations
The price of DAB is increasingly more attractive – was around 20%3 months ago
DAB owners – why are they buying?
National Services - Coverage
• 50 million peoplecovered
• Digital One - 85%– 83 transmitters on-line
• BBC – 80%– 85% by mid 2004– rolling-out 47 transmitters
Digital One
BBC
BBC + Digital One
82
100
7161
45
154
2919
J an-02 jan 03 sept 03 dec 03 May 04 J ul-04 Sep-04 dec 04
forecast
DAB – explosion in product
no. of different DAB products in the marketplace – cumulative
2003 2004
50 new products so far this year Another 54 to come (est.)
DAB – value sales – continued growth Delivering a substantial market
Sales have delivered a
£54 million
market in the last year (y/e jul 04)
Analogue volume in millions5478
5458
feb-jul 03 feb-jul 04
In summary: the analogue marketin decline
Analogue value (in £ millions)
£468.833
£410.785
feb-jul 03 feb-jul 04
-0.4% -12%
Source: GFK
DAB volume in 000s
70.4
205.1
feb-jul 03 feb-jul 04
The DAB market – healthy growth
DAB value (in £ millions)
£8.978
£23.607
feb-jul 03 feb-jul 04
+191% +163%
Source: GFK
Av price of a kitchen radio – DAB v analogue Analogue price cutting
£103 £102 £102 £101£105
£101
£109 £114 £110£105
£99
£31 £29 £30 £30 £29 £28 £27 £28 £29 £28 £27 £25 £24 £24£19
£108
£25£27£30
Aug-Sept01
Oct-Nov01
Dec01-Jan02
Feb-Mar02
Apr-May02
Jun-Jul 02
Aug-Sept02
Oct-Nov02
Dec02-Jan03
Feb-Mar03
Apr-May03
Jun-Jul 03
Aug-Sept03
Oct-Nov03
Dec-Jan04
feb-mar04
apr-may04
apr-may05
DAB transistor radio
ANALOGUE transistor radio
-24.1
-17.3
-12
-6.3
1.3
25.4
45.9
0.6
3.3
0.2
Portable CD
Boomboxes
Portable MD
Clock Radios
Headphones
MP3 Players
Personal Stereo
Personal Radio
Transistor Radios
Total Portable Audio
y/e may 04 v y/e may 03
DAB sectors – the only sectors in average price increase
Most markets showeda stronger decline in average price £ in May than for the year in total - underlining the continuous price pressure in the market.
Portable audio – % change in £ average priceDAB sectors – the only sectors to see price increases
CE market – % change in £ average priceDAB sectors – the only sectors to see price increases
-36.5
-26.3
-24.9
-24.1
-17.3
-13.2
-12.8
-11.8
-11.4
0.6
25.4
45.9
-29.3
-19.5
-10.3
-22.5
-24.6
DVD Players
DVD Total
DVD Recorders
Home Theatre Systems
TVR
Port CD
Plasma
LCD TV
RCR
CTV Total
CTV 16:9
Audio Systems
Camcorders
VCR
Portable Audio
Pers Rad
Tran Rad
Source: GFK % change y/e May 04 v y/e May 03
Retailers
600
4,000
6,000
2002 2003 2004
7 fold growth
End of 2003 March 2004
+50%
Competitive marketin a short space of time
independents
over
48.760.7
74.6
176.0
36.730.4
22.5
69.6
17.122.6
dec02/jan
03
feb/mar 03 apr/may
03
jun/jul 03 aug/sept
03
oct/nov 03 Dec/jan 04 Feb/Mar
04
Apr/May
04
jun/jul 04*
DAB digital radio sales A record june/july predicted
Source: GFK
(volume in 000s)
GFK – approx 88% coverage of the DAB market
* = estimate
163.1185.6
216.0252.7
301.4
682.3
607.7
547.0
477.4
146.0135.060.0
160.0
260.0
360.0
460.0
560.0
660.0
up to dec02
jan 03 feb/mar 03 apr/may03
jun/jul 03 aug/sept03
oct/nov 03 dec/jan 04 Feb/mar04
Apr/May04
jun/jul 04
DAB digital radio- cumulative salesJust shy of 700k
Source: GFK
+17.1k +22.5k +30.4kGFKbimonthly sales
(volume in 000s)
+36.7k+11.0k +176k
DAB penetration estimated up to end jul 04
682k
+48.7k
GFK – approx 88% coverage of the DAB market
+69.6k +60.7k +74.6kestimate ****
Kitchen portables marketNow very much a DAB market
% of value
Source: GFK
0% 0% 0% 0% 0% 0%4%
9%
14%18%
30%
36%39%
50%
67%
61% 61%62%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Aug-Sept01
Oct-Nov 01
Dec01-Jan
02
Feb-Mar 02
Apr-May 02
Jun-Jul02
Aug-Sept02
Oct-Nov 02
Dec02-Jan
03
Feb-Mar 03
Apr-May 03
Jun-Jul03
Aug-Sept03
Oct-Nov 03
Dec-Jan 04
feb-mar04
apr-may 04
jun-jul04
DAB Kitchen portableAnalogue Kitchen portable
Kitchen Radios Market Value 1987-jan 2004
17.8 17.7 18.1
22.5 20.619.7
19 18.517.6 19.1
21.323 22.5
27.4
30.5 30.4
54.6
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002* 2003**
Value £ millions
* 52 w/e Nov **feb03-jan04
Source: GFKCopyright: DRDB
Consumer Marketing
DAB – ever increasing press coverage
45
130
155
175
155 155170
238
172 167
206
170
213 212203 210
237222
272
302
256267
385
283297
374
312 313M
ay
-02
Ju
n-0
2
Ju
l-0
2
Au
g-0
2
Se
p-0
2
Oc
t-0
2
No
v-0
2
De
c-0
2
Ja
n-0
3
Fe
b-0
3
Ma
r-0
3
Ap
r-0
3
Ma
y-0
3
Ju
n-0
3
Ju
l-0
3
Au
g-0
3
Se
p-0
3
Oc
t-0
3
No
v-0
3
De
c-0
3
Ja
n-0
4
Fe
b-0
4
Ma
r-0
4
Ap
r-0
4
Ma
y-0
4
Ju
n-0
4
Ju
l-0
4
Au
g-0
4
Source: Romeike
No. of articles
March – regional GM Daewoo articles
= £1.2 millionadvertising value
Virgin – Win ‘His and Hers’ DAB digital radiosSept 2004
Classic FM Survey / Win a DAB digital radio
DAB Pink Intempo - Cosmo Bride September 04 issue
DABIn the lifestyle
magazines
Pure’s The Bug in ‘Closer’
Retailer advertising
Currys
in-store brochureSept 04
Comet
Comet
Summer 2004Flyer
Roberts Radio The 1st radio brand - high profile ad campaign
• £0.5 million press campaign
• Autumn 2004• 65 insertions, across
the broadsheets, the Sunday broadsheets and the Radio Times
Growth in retailer effectiveness
24% first learnt about their DAB radio from a
in-store display
Source: Claritas
% of card returns
Where did they first learn about this product?
Success to date
24
21
13
88
4 5 46
3 21 1 0.3
In s
tore
Dis
pla
y
Re
ceiv
ed
as
a g
ift
Ra
dio
ad
vert
ise
me
nt
Fri
en
d /
Re
lativ
e
Inte
rne
t / W
eb
site
TV
ad
vert
ise
me
nt
Ne
wsp
ap
er
/ Ma
ga
zin
e a
rtic
le
Ma
ga
zin
e a
dve
rtis
em
en
t
Oth
er
Ne
wsp
ap
er
ad
vert
ise
me
nt
Fro
m a
Sa
les
pe
rso
n
Wh
ich
? R
ep
ort
Sa
telli
te T
V a
dve
rtis
em
en
t
Co
mp
etit
ion
/Pro
mo
tion
Jan-Mar 04
% of card returns
DAB prompted awarenessOver half of the UK population now aware of DAB
Source: DRDB Tracker (Ipsos RSL Omnibus) – prompted awareness
• Awareness up 8 percentage points in just 6 months
• And up 18 percentage points in the last year
16%
30%33%
43%
52%
0%
10%
20%
30%
40%
50%
60%
end of 2001 May-03 Aug-03 Jan-04 Aug-04
= 25.4 million 15+ adults
(15+ population: 48.862 million Rajar Q2 2004)
Q. DAB digital radio is……Have you heard of this? (prompted awareness)
Broadcaster advertising
Emap
full page adin Retail Week
Sept 04
Offering retailers who are advertising DAB brands a 50% discount on Emap’s
digital stations
Consumer Feedback
94 94 9392 91 91 89 88
82 79
0
10
20
30
40
50
60
70
80
90
100
Easy to tune Sound quality To receivenew digitalstations
Productappearance
To receiveimproved
reception ofexistingstations
Size Average Programmecontent
Text andinformation
Value formoney
% of respondents who state good/excellent satisfaction for that feature
High satisfaction amongst owners89% state good/excellent satisfaction with their radio & its features
Source: Claritas oct-dec 2003
• ALL features above 79% good/excellent satisfaction
• Easy to tune, sound quality & new stations are the big winners
• Increased satisfaction in product appearance – now 4th
Listening Changes
• Commercial radio share increasing– 47% of analogue listening– 80% of digital listening
• Number of stations listened to increasing– 2.4 stations (analogue listeners)– 3.6 stations (digital listeners)
• Length of listening increasing– Digital listening ~1.4 hours more a day
Sources: RAJAR Q1 2004, and Continental Research report for MXR (April 2004)
In-car developments
DAB in-car developmentsVauxhall New Astra• Excellent uptake of DAB so far.
– Total cars built: 28,000 With DAB: 1,245 (3.9%)– Total cars registered: 19,000 With DAB: 745 (4.4%)– NB. Compares to typical 1 to 2% uptake of similar options
• Special Edition model – ‘SXI Digital’ – In showrooms from 20th September
– 500 display/ demo cars in dealers. Complete with livery that says “Go Digital. DAB Digital Radio as standard”
– DRDB-produced ad campaign on-air from 9th Sept to 8th Oct
– Vauxhall running motoring press ads to say “DAB fitted as standard”
DAB in-car developmentsVauxhall – Other models• DAB option now extended to
other models– Vectra, Corsa, Meriva,
Signum, Corsavan and Combo
– DAB is included in most basic audio upgrade
– Same pricing (£400 for DAB + 6-CD changer)
• DAB option part of New Zafira launch, summer ’05
• From Oct 1st DAB fitted as standard on Vectra higher end variants – Design, Elite, GSi
Marketing plans 2004
Advertising & Forecasts
DRDB advertising plans
• “Breadth of range” 5th - 31st July
• “In-car” Vauxhall 9th Sept – 9th Oct.
• “Teaser campaign” 9th Oct – 7th Nov.
• Christmas campaign i.e. easy access, breadth of range, price, in-car.
1st -24th Dec.
DRDB Aims this year
• Sales target – 1 million cumulative
• Converting the 48% ‘DAB non-aware’ mass market
• Driving consumers to retailers
• Broaden product range
• Broadening the ownership profile