Friday 18 May 2018

Deep Decline for Radio Ads in Norway Bad News for DAB Broadcasters

The transition from FM is considered to be the problem.
Meanwhile, all good news for local FM radio.

During 2017 national public and commercial radio made a complete with-over from FM to DAB+. Now, media agencies' investments in radio advertising show that the two commercial networks Radio Norway and P4 in four months have backed from NOK 144.5 million to a turnover of 133.2 million. By April they have backed 7.8 %, says the CEO of the Media Agency, Merete Mandt Larsen to ad business magazine Kampanje. Just for April development is even worse. Radio ad investments was down by 17%.

It is a difficult market for radio today, not least because of the transition to DAB. There are fewer listening to DAB radio and the range is decreasing, says Jarle Thalberg, Sales Manager, MediaManager GroupM. The transition from FM to DAB affects P4 and Radio Norway's main radio channels when many are listening to a broader output with more and niched channels. It's worrying is that advertisers seem to have lost their desire for radio, says Thalberg.

Read more in Kampanje

In this context, local radio advertising sales have not been included. But there are continued reports of significant increased listening and also increasing advertising revenues for local stations, which continues on FM. For example, one of the larger local radio networks with nine stations - Jærradiogruppen - has had a 35 percent increase during the first quarter of the year. It is about local advertising as well as national advertising via media agencies. Radio Metro stations reported have doubled their advertising sales.

Local radio continues to be expanded in areas outside the largest cities where FM is still allowed to broadcast. This week Radio Metro received a local radio concession for Osterøy, Masfjorden, Lindås, Modalen, Meland, Austreim, Radøy, Fedje and Vaksdal in Hordaland county (north of Bergen). The concession was obtained after lottery drawing at the Media Authority because there were two applicants.

The current strike at public broadcaster NRK may benefit local radio more than the two commercial networks DAB channels. This is mainly due to the fact that NRK now broadcasts more music in the absence of news and current affairs content. Local Radio's regional and local identity and control override the music playlists of the national commercial channels.

Local radio in Norway is owned and operated entirely by Norwegian interests while the national commercial radio is owned by two foreign companies; German Bauer and Swedish MTG.

In neighbouring Finland and Sweden the radio ad business is increasingly good on national FM networks especially for Bauer. No transition to DAB is on the agenda in those countries. In Denmark Bauer is on FM and DAB but in order to retain its business position Bauer want to stay on FM.

Also read
50 Percent of Norwegians Do Not Switch to DAB. Rather Stay on FM
Norwegian Local Radio Will Continue On FM
Local radio as big as NRK in Telemark county (