Time to end static radio listener survey

It's been a rollercoaster week for the radio industry. Smiling faces at the annual Radio Awards last weekend turned to brave faces on Tuesday for the Joint National Listenership Research (JNLR) figures. Behind both, is some genuine concern.

We should share it. For most people, radio is the main provider of news. Unlike television and print, it is almost exclusively home-produced. Damage radio and we damage a key part of Irish democracy. But the industry regulator, the Broadcasting Commission of Ireland (BCI), looks set to do just that.

On the face it, the BCI decision to licence four new stations in Dublin looks sensible. Competition rarely hurts an industry. More and better competition could clear some cobwebs and complacency from RTÉ. The national broadcaster remains high-quality, but overwhelmingly speaks to and for the middle-aged and older. Montrose requires modernisation. Furthermore, like all State broadcasters, RTÉ has an interdependent relationship with government. Strong, independent competition is a remedy for both ills.

But there are two problems with issuing the new licences: too many stations chasing limited advertising revenue and a system of measuring listenership that doesn't fairly decide who gets it.

Dublin now has 10 FM stations. Perhaps the regulator hasn't noticed that the three newest (Country FM, NewsTalk 106, Spin FM) are yet to make sufficient revenue. A fourth can probably be added to the list: following poor JNLR figures this week, these are difficult days at Lite FM.

Advertising budgets are yet to recover from economic slowdown. The spectrum is crowded, so it takes longer for newcomers to attract listeners. Add four more stations and the squeeze could be suffocating.

When revenues fall, costs are cut. In radio that means fewer staff. The cost of broadcasting technology is unavoidable and fixed. So, labour-intensive news and specialist programming will be targets.

It's the opposite of what's intended. BCI chief executive, Mr Michael O'Keeffe, asked applicants to explain how they "will add to the diversity of services". In a crowded market of a set size, diversity is expensive. Dublin radio advertising is worth €40 million. Divide it between 14 stations and there will be stations closing, yet more mainstream music, poorer news and increased dominance of quality radio by RTÉ.

The issue goes beyond Dublin. Significantly, the only independent national station, Today FM, is alone in publicly questioning the new licences. With one-third of its potential listeners in the capital and Matt Cooper currently failing to match Eamon Dunphy's grizzled brand of drivetime intelligence, the station has warned the BCI not to issue more licences too soon. Radio across Ireland will be poorer if Today FM cuts back a limited national service.

With too many stations chasing too little cash, the best we could hope for is survival of the fittest. Could intense competition, while bankrupting a handful of stations, leave survivors leaner and better?

Alas, the referee for the impending Darwinian bloodbath of Dublin radio is not Mother Nature, but the JNLR survey. Its results determine each station's advertising revenue. Most of the industry believes the JNLR is inaccurate and outdated.

In Dublin, the JNLR polls just one thousand people every six months. With 14 stations, average market share will be 7 per cent. The small sample means the margin of error is around two percentage points either way. Errors increase for smaller market share, so new stations are particularly vulnerable.

Try competing in business with revenue subject to random fluctuations of more than 50 per cent. The system is bad outside Dublin too. Jobs, careers and companies are risked on reports from a few hundred listeners.

The sample is also biased. The JNLR is, remarkably, still collected by knocking on doors. Results are likely to reflect less mobile lifestyles and so, probably, produce unrealistically conservative listening patterns.

Modern research methods allow larger, better, samples. The equivalent British system (RAJAR) gives people, of whatever lifestyle, listening diaries to complete for a week. Compared to the JNLR, RAJAR records eight times as many listening days per head of population.

Reform looks unlikely. One music station executive confessed to me that although he knows the system is wrong, it benefits established stations like his. JNLR management committee secretary, Mr Steve Shanahan, recently dismissed "the whingers" and complained of a "culture in this market that if we don't like the survey results we must blame the survey itself". Mr Shanahan says all research methods are imperfect and the JNLR is as good as any but, unlike most market research, radio surveys aren't used by companies merely to make educated guesses about consumer preferences. Listenership surveys directly determine revenue; dictating jobs, programming and solvency.

Ireland should conform to best international practice. By using the internationally recognised Nielsen system, it does so for television ratings. The newspaper readership survey was recently revamped too. It's radio's turn.

The BCI says it wants to "promote a culture of excellence in the independent broadcasting sector". It should start by checking the financial health of the industry for which it is custodian. New licences should be delayed. Then it should oversee investment in better listenership measurement. Otherwise, the culture promoted will be that of the bargain basement.

Pete Lunn is former editor at NewsTalk 106