I’ve just appeared on R4s media show to discuss the Global Radio restructuring. The audio is here
Amol didn't ask how much I think Global will save with this move. No one outside the Global boardroom can know for sure, but I'd guess that losing, say, 100 front line programming staff - the estimate that the good folk at RadioToday calculated (many of whom, as breakfast talent, will have been well paid) will save c £5m per annum. Closing 10 offices will probably also save £500,000 per annum each, given there will be some further redundancies there. So another £5m, giving an overall guesstimate of £10m in annual savings.
Amol did ask me one of those jaw dropping questions that only people who have never spent time worrying about their P&L can ask. Why do profitable groups need to make “more” profit? Why can't the status quo continue?
I’d say three things.
First, it’s what all private companies do (media or not) - search out profits. Like killer sharks, businesses need to keep moving forward or they die. The whole of western capitalism is built on the search for profit - remove that and you undermine everything that keeps powering our economic growth as a country.
Second, don’t get fooled that those existing profits can remain forever - there are other media sharks out there - many of them much, much bigger than Global. Newspapers, online aggregators, streamers, podcasters, vloggers - everyone wants a share of our media time, and then their unfair share of the advertising that this media time brings. Many a seemingly invulnerable big company has been brought low in double quick time when the market changes, and media feels more in flux today than it ever has.
Third - you need investment to stay alive, and in the case of these effectively new national radio brands with their new national breakfast shows, that means one thing only - marketing.
A national TV campaign of decent weight (70% cover/280 TVRs - which means 70% of the population would see the ad, on average 4 times (280/70=4)) on ITV will cost around £2m in media costs alone. Add in creative, fees and a bit of support (although external will increasingly come for Global via their OOH network) a decent campaign is probably a £2.5m investment. So, given three brands to promote, an extra £10m in profits soon gets eaten up in a campaign or two for each brand a year. Frighteningly, that may very well not be enough, as I will shortly explain.
Of course the goal is bigger listening numbers. And that's easy to say, and people might be forgiven thinking that if you throw £2.5m at TV advertising your audience is bound to go up - but this is at best a zero sum game, so your marketing spend isn’t just "picking up gold from the pavements".
As an industry, we are not adding new radio listeners every year - each one you gain has to be prized away from another station - in Global’s case almost certainly BBC R1 or R2 - and those guys aren’t going to give their listeners up easily. And in case we’ve forgotten - R1 and R2 have their own TV network to help them fight back. So if Global are headed this way, direct one-on-one combat with the BBC, it's a fight to the death. There's absolutely no point in doing a couple of quick bursts of TV and then sitting back, hoping for the best. You've got to have a five to ten year plan here. And that means big pockets are needed.
Knowing Ashley (Tabor, the ultimate owner of Global) and his ambition, and the drive of those around him, he will have written down somewhere the answer to the question that drives all successful business people - “What does success look like?”
And I think his answer will be “Capital to be bigger in share and reach than R1, and Heart to be bigger in share and reach than R2”.
Now Capital as a network (excluding Capital Xtra) reaches 7.3m listeners (13%) vs 9.4m for R1(17%), so that feels like a closable gap to me with a new, national breakfast show with significant marketing - although R1 with Greg James at breakfast are definitely having a creative resurgence, so it won't be easy.
Heart network (excluding its spin-off brand extensions) is currently on 8.5m listeners (16%) vs R2s 14.9m (27%). That's a significantly bigger gap, and will take longer to close, but nothing is impossible, and R2 itself is perhaps more vulnerable now to challenge than it has been for 15 years or so.
Smooth, at around 5.8m listeners, is perhaps too far back to itself overtake R2, but of course any audience it can draw away will help Heart in its goal of overtaking the BBCs premier radio network. So I'd expect to see Smooth being marketed too, though perhaps not as intensively as Heart.
When we launched Heart 106.2 in London in 1995, no one gave us a hope of catching and overtaking Capital FM in either share or reach. 10 years later, in 2005, we were doing both.
I'm sure Ashley will see this restructuring as a fresh start, 12 years on from his entry into the radio business. He will have a new 10 year time frame very much in mind, and R1 and R2 in his sights. He thinks long term. Very long term. I certainly wouldn't put achieving both of these goals past him.
And where does that leave Bauer? I'll come back to them in Pt II next week
Thursday, 28 February 2019
Wednesday, 13 February 2019
The Big Play
Now the dust has settled (for now at least) on Bauer's remarkable series of deals the week before last, I thought I'd just post a few thoughts on where we and they go from here.
As a former Non-Executive Director of Celador Radio I'm obviously constrained from discussing our deal completely - but I should give a hat-tip in passing to Bauer's Development Director Peter Brimacombe, who I dealt with extensively in the run up to the disposal/acquisition. Having seen everything on his plate, I now know why he was sometimes late in returning my calls!
So, via Celador, Lincs and the Wireless local stations, Bauer have bought another 20m hours or so (some have been subsequently sold off, but with national sales retained) to add to the 156m hours they already had under control. If they are also now selling all of Nation Radio's stations in the national marketplace, that represents around a 15% increase in their nationally traded hours. That's some move in an already heavily consolidated market.
John Myers has blogged on how he sees these developments here, and my good friend Matt Deegan did some tabulations which I have stolen, to show the new, approximate, state of play.
Bauer have closed the hours gap on Global, which for them is a necessary but not sufficient condition to close the revenue gap.
Between them, Global and Bauer did have a little more than 80% of all UK Commercial radio listening before these transactions, and managed to convert this into around 90% of UK commercial radio national revenue - via trading arrangements with agencies which essentially said "we have X% of the listening, so we want "X + another 5%" to "X + another 10%" of your revenue".
Of course in order to get the agencies to agree to these deals, prices have had to be carefully constrained. There hasn't been much price inflation in radio airtime for many years, as these two groups have traded price increases for dominant share deals.
This has meant that up until last week the 20% of the industry outside to two big groups has been forced to share just 10% of the national revenue. Bauer have just bought a little under half of that non-aligned business (the rest is principally Wireless Group's national brands and a very small number of still unaligned local stations). Bauer won't immediately be able to fold those additional hours into their share deals, and if you think about the maths, every extra pound they can persuade agencies to spend on their new acquisitions has to come from somewhere, and if it isn't from the existing locked-down deals with Global (which it won't be, knowing how well structured any Global deals are likely to be), it is difficult to see how it isn't right now a case of "robbing Peter to pay Paul", or should that be "robbing Steve to pay Graham"?
This is why the deals just done are a necessary, but not sufficient, condition for Bauer to improve their revenue share. In order to move the deals they have with agencies, I think they will have to offer more than just the same brands and stations that are on offer now. If nothing happens, agencies will rightly say "what has changed, apart who who holds the shares in the licences?" If the radio pot stays the same size, it's difficult to see the new, enlarged Bauer (but still some way behind Global in terms of listening share) shifting the needle very much at all. And if the point of these deals wasn't to close the gap, and leverage more national money, I'm not sure whether the overall level of return will be there for them.
I do think there will be a real desire, from national agencies, for Bauer to perform some radical surgery on their portfolio of brand offerings if they are going to be able to persuade advertisers to switch revenues. The real opportunity is to grow the radio cake overall by having two equally matched groups offering rival, attractive, national brands to advertisers. At the moment Bauer are (despite their protestations about the size of their Hits network) some way behind in this offering, and as long as Global have the biggest national brands all to themselves I can't see this changing the dynamic.
Classic, Heart, Smooth and Capital are all bigger than Kiss, Magic and Absolute at a national level. If that could be reversed, with Bauer's brands coming out on top (or even in the mix) the resulting rivalry to pitch to national clients for big ad spend budgets and sponsorships could genuinely persuade advertisers to move money out of other media and into radio - and particularly into Bauer's coffers. Although they probably wouldn't agree, I'd suspect Global too would benefit from an increased level of inter-brand rivalry being played out in the dealing rooms of the top London media agencies.
The other big question is where does Wireless Group/NewsUK sit in all this. At just 25m hours they are only 10% of the size of Global, and 15% the size of Bauer. This means that despite TalkSport having a very attractive audience demographic, TalkRadio starting to gain some traction, and Virgin obviously about to benefit significantly from the arrival of Chris Evans, they are arguably too small to really punch their weight on media agency radio schedules.
Bauer aren't sellers, so unless NewsUK want to offer an incredible price I can't see the Bauer assets changing hands. NewsUK aren't sellers either to my knowledge, and if they were you'd have thought Bauer would have bought those assets in this latest set of transactions - which they didn't.
So the only thing left is some form of merger. Probably not of assets - both parties will surely want to retain control of what they own. But national sales? NewsUK wouldn't want to be just "repped" by Bauer, and lose control over their only income stream, but a joint venture, where both parties are protected and jointly share control? Surely there is a deal to be done here to sell all of Bauer and NewsUKs portfolios together in a single company as a counterweight to Global? Then we really would have, in the national sales marketplace, two equally matched groups, both with an attractive bouquet of high profile brands and talent.
That really would be quite exciting for radio, if it comes off.
As a former Non-Executive Director of Celador Radio I'm obviously constrained from discussing our deal completely - but I should give a hat-tip in passing to Bauer's Development Director Peter Brimacombe, who I dealt with extensively in the run up to the disposal/acquisition. Having seen everything on his plate, I now know why he was sometimes late in returning my calls!
So, via Celador, Lincs and the Wireless local stations, Bauer have bought another 20m hours or so (some have been subsequently sold off, but with national sales retained) to add to the 156m hours they already had under control. If they are also now selling all of Nation Radio's stations in the national marketplace, that represents around a 15% increase in their nationally traded hours. That's some move in an already heavily consolidated market.
John Myers has blogged on how he sees these developments here, and my good friend Matt Deegan did some tabulations which I have stolen, to show the new, approximate, state of play.
Bauer have closed the hours gap on Global, which for them is a necessary but not sufficient condition to close the revenue gap.
Between them, Global and Bauer did have a little more than 80% of all UK Commercial radio listening before these transactions, and managed to convert this into around 90% of UK commercial radio national revenue - via trading arrangements with agencies which essentially said "we have X% of the listening, so we want "X + another 5%" to "X + another 10%" of your revenue".
Of course in order to get the agencies to agree to these deals, prices have had to be carefully constrained. There hasn't been much price inflation in radio airtime for many years, as these two groups have traded price increases for dominant share deals.
This has meant that up until last week the 20% of the industry outside to two big groups has been forced to share just 10% of the national revenue. Bauer have just bought a little under half of that non-aligned business (the rest is principally Wireless Group's national brands and a very small number of still unaligned local stations). Bauer won't immediately be able to fold those additional hours into their share deals, and if you think about the maths, every extra pound they can persuade agencies to spend on their new acquisitions has to come from somewhere, and if it isn't from the existing locked-down deals with Global (which it won't be, knowing how well structured any Global deals are likely to be), it is difficult to see how it isn't right now a case of "robbing Peter to pay Paul", or should that be "robbing Steve to pay Graham"?
This is why the deals just done are a necessary, but not sufficient, condition for Bauer to improve their revenue share. In order to move the deals they have with agencies, I think they will have to offer more than just the same brands and stations that are on offer now. If nothing happens, agencies will rightly say "what has changed, apart who who holds the shares in the licences?" If the radio pot stays the same size, it's difficult to see the new, enlarged Bauer (but still some way behind Global in terms of listening share) shifting the needle very much at all. And if the point of these deals wasn't to close the gap, and leverage more national money, I'm not sure whether the overall level of return will be there for them.
I do think there will be a real desire, from national agencies, for Bauer to perform some radical surgery on their portfolio of brand offerings if they are going to be able to persuade advertisers to switch revenues. The real opportunity is to grow the radio cake overall by having two equally matched groups offering rival, attractive, national brands to advertisers. At the moment Bauer are (despite their protestations about the size of their Hits network) some way behind in this offering, and as long as Global have the biggest national brands all to themselves I can't see this changing the dynamic.
Classic, Heart, Smooth and Capital are all bigger than Kiss, Magic and Absolute at a national level. If that could be reversed, with Bauer's brands coming out on top (or even in the mix) the resulting rivalry to pitch to national clients for big ad spend budgets and sponsorships could genuinely persuade advertisers to move money out of other media and into radio - and particularly into Bauer's coffers. Although they probably wouldn't agree, I'd suspect Global too would benefit from an increased level of inter-brand rivalry being played out in the dealing rooms of the top London media agencies.
The other big question is where does Wireless Group/NewsUK sit in all this. At just 25m hours they are only 10% of the size of Global, and 15% the size of Bauer. This means that despite TalkSport having a very attractive audience demographic, TalkRadio starting to gain some traction, and Virgin obviously about to benefit significantly from the arrival of Chris Evans, they are arguably too small to really punch their weight on media agency radio schedules.
Bauer aren't sellers, so unless NewsUK want to offer an incredible price I can't see the Bauer assets changing hands. NewsUK aren't sellers either to my knowledge, and if they were you'd have thought Bauer would have bought those assets in this latest set of transactions - which they didn't.
So the only thing left is some form of merger. Probably not of assets - both parties will surely want to retain control of what they own. But national sales? NewsUK wouldn't want to be just "repped" by Bauer, and lose control over their only income stream, but a joint venture, where both parties are protected and jointly share control? Surely there is a deal to be done here to sell all of Bauer and NewsUKs portfolios together in a single company as a counterweight to Global? Then we really would have, in the national sales marketplace, two equally matched groups, both with an attractive bouquet of high profile brands and talent.
That really would be quite exciting for radio, if it comes off.
Tuesday, 22 January 2019
Radio Wars
How interesting is radio in the UK right now?
Less than 24 hours after Chris Evans launches his new breakfast show on Virgin, another R2 escapee, Simon Mayo, is announced as the lead presenter on another new station, Scala Radio, due to launch in March. More on Scala in a moment, but first an update on my previous blog here on the economics of the Evans move.
I'm sticking to my guns on the cost to Wireless/News UK of Evans move. Despite the claimed creative challenges inspiring him to move, Chris will not have gone without personally matching his peak BBC fees of c £2m. His team will add a few hundred thousand on top. Add in employers NI/pensions etc and you must be looking at a £2.5m-£3m incremental cost. I did predict this would be a five year play, and Chris has already said he will extend his current three year contract to five years.
I did also predict they would need to bolster the team for the rest of the schedule. So far that hasn't happened, but it will be interesting to see if that changes when new listeners do arrive. Will they be happy with the current line-up or might they be expecting a back-up team as good as he had on R2? David Lloyd's first day review of the output augurs well and the link has some telescoped audio from the show if you missed it.
This is probably a secondary point. What is more critical is his decision, I'm sure taken with full board approval and based on solid research, not to run with ads in the show - just a sponsorship deal. as Adam Bowie reflected in his blog yesterday, sponsorships of high profile radio breakfast shows are valuable - and if I had to guess I'd say the Sky deal was worth £1m-£1.5m, although I'd also reckon a biggish chunk of that is in the form of a barter arrangement to run ads for the show on Sky (some of which have already aired). The show is also being promoted, as you would expect, across News UK titles (both a wrap around in The Sun and full page ads in The Times so far this week). Has there been any truly external, 3rd party paid-for advertising so far. A little, I think, on terrestrial TV, but so far not the major, all guns blazing ITV campaign we might have expected.
I still think £10m is the sort of sum required to launch a big, ambitious, popular music national show in the face of fierce competition from both BBC and commercial rivals. I'd regularly spend between £0.5m and £1.5m on station launches (aggregated over a 24-36 month period) in either London or big regions/cities. Grossing that up, and discounting for economies of scale but adding inflation, I think a biggish number is needed to cut through nationally at the level required. Quite possibly the big guns are being saved for later - a strategy I'd support, using the barter and in-house promotion, alongside inevitable launch pr, as a first salvo in the war. But I think they must know this is a "go big or go home" play - especially if they want to get weekly reach into the millions, which they must in order to make a return.
The biggest delta to the original numbers I quoted last year has been the decision to only run sponsorship at breakfast, and not advertising. Although breakfast only counts for 3 out of 24 hours (so around 12.5% of spots available by number), the size of the audience, and its prominence within the output, means weekday breakfast would on most stations generate a good 20%-25% of the total revenue booked across a year. I'd estimated they need £20m in annual revenues by the end of this five year period for the station to be making sufficient profits to be deemed a success. If you are going to block the easiest £5m of that off the bat, it makes the rest of the project that much harder to succeed. In the short term it will undoubtedly make the show more comfortable for new listeners - but in the long term will it fatally undermine the economics? It's all to play for, and the good news for all commercial radio listeners is it will put huge pressure on other stations to limit their own commercial exposure. For too long now operators have overloaded stations, particularly at breakfast time, with too many commercial messages. Chris may well force a rethink, if he succeeds in taking listeners away with a format and music mix closer to his commercial rivals than ever was the case on R2. Heart, Smooth, Magic and Absolute together have a size equivalent to R2, so The Wireless Group programming gurus will be training their guns on them as well as Chris's former BBC home.
On to Scala, a smaller, but no less interesting new play. Simon Mayo is, like Chris, a hugely talented and experienced radio player at the highest level. He doesn't of course have Chris's level of fame, nor the desire to get up at 4am again in order to host the breakfast show on this new station as he is booked in to mid-mornings (as a former R1 breakfast host, he knows the pain). Nevertheless a good six figure annual fee, alongside some other reasonable talents, will mean a programming budget I'd guess at c £1m per annum. Matt Deegan has nicely blogged here about the likely feel to the output. The transmission capacity for Scala is being found on DAB multiplex D2 from other channels being either discontinued or possibly having their bandwidth reduced, so arguably at nil additional cost to Bauer. But, to make a fair comparison, we should budget, say £0.5m per annum as the cost of using this capacity, which could be sold to 3rd parties if Bauer really didn't want or need it. Add in £0.5m for other incremental back-room/admin costs and you have a station which should be able to operate on a £2m per annum budget. Realistically this is not a staton which is going to "go big or go home" on its marketing. Slow burn is the order of the day here I'd guess. Bauer don't have an obvious newspaper or high profile magazine in their stable to use as a promotional vehicle - but I could imagine creative deals where, say, The Guardian could be partnered with to promote the station, in return for exposure for that newspaper across the Bauer Radio portfolio. You are still going to need some hard cash to get your marketing message across - but I could see £2m-£3m over the first couple of years doing a decent job.
So maybe a £2m marketing spend, and a couple of years supporting a £2m per annum cost base. That would suggest in round terms a £5m cash investment. Can that be recouped? Of course neither Bauer or News UK are selling companies, but you do need to crunch numbers as though you are in order to establish value for existing shareholders. My investment rule of thumb is that if you can create value that is 3 x your investment, that represents a decent return. That would imply a £15m value is needed. In turn, using pretty standard value multiples for Scala I'd think an asset value of 10.0x your annual profits is a sensible metric (although I had used a slightly punchier 12.0x for Virgin). That means the station needs to be making an operating profit of around £1.5m. Assuming royalties, commissions and incremental sales costs (Bauer already has a big national team so these won't be high) take off 20% of any revenue earned, that means they would need annual revenues of £4m-£5m to make a £1.5m profit.
Commercial stations tend to generate roughly £1 of national advertising per year for every weekly hour of listening they achieve (that figure is simply the number of listeners x how long they listen each week). UK radio as a whole generates 470m listening hours each week, and total national advertising and sponsorship (including the rapidly growing pot of digital revenues) ran at a little under £500m in 2018. Some stations will do better than average, some worse, but Scala, backed by Bauer's pretty significant presence in the national marketplace, will trade at par I'd think.
So that implies they need around 4m listening hours per week. Both Radio 3 and Classic FM get around the same time spent listening to them each week (6.5 and 6.8 hours respectively), so there's no reason to suspect Scala won't get 6 average hours if its programming is good. So to get 4m listening hours it will need to reach 650,000 to 700,000 listeners. Classic's weekly audience is 5.2m, although it of course benefits both from a significant heritage, a great UK wide FM network, and a presence on the D1 DAB platform, which has excellent UK coverage. Scala will be DAB only, with no heritage, and will only be on the less extensive D2 platform. Despite this I think 650,000-700,000 listeners is a realistic aim, being just 15% of Classic's current audience, and probably only around 10% of the combined audience of Classic and R3, which I'd guess at between 6m-7m (R3 has 1.9m listeners, but there's only partial sharing of listeners).
So Scala is less risky financially than Virgin, but perhaps not with the overall upside of the Wireless/Evans enterprise. But perhaps that's inevitable, Bauer are the UKs 2nd largest group, behind Global, and their goal must be relatively safe, incremental growth to try and close that gap. Wireless/News UK are some way behind, so the risks, and rewards, need to be higher.
Let battle commence
Less than 24 hours after Chris Evans launches his new breakfast show on Virgin, another R2 escapee, Simon Mayo, is announced as the lead presenter on another new station, Scala Radio, due to launch in March. More on Scala in a moment, but first an update on my previous blog here on the economics of the Evans move.
I'm sticking to my guns on the cost to Wireless/News UK of Evans move. Despite the claimed creative challenges inspiring him to move, Chris will not have gone without personally matching his peak BBC fees of c £2m. His team will add a few hundred thousand on top. Add in employers NI/pensions etc and you must be looking at a £2.5m-£3m incremental cost. I did predict this would be a five year play, and Chris has already said he will extend his current three year contract to five years.
I did also predict they would need to bolster the team for the rest of the schedule. So far that hasn't happened, but it will be interesting to see if that changes when new listeners do arrive. Will they be happy with the current line-up or might they be expecting a back-up team as good as he had on R2? David Lloyd's first day review of the output augurs well and the link has some telescoped audio from the show if you missed it.
This is probably a secondary point. What is more critical is his decision, I'm sure taken with full board approval and based on solid research, not to run with ads in the show - just a sponsorship deal. as Adam Bowie reflected in his blog yesterday, sponsorships of high profile radio breakfast shows are valuable - and if I had to guess I'd say the Sky deal was worth £1m-£1.5m, although I'd also reckon a biggish chunk of that is in the form of a barter arrangement to run ads for the show on Sky (some of which have already aired). The show is also being promoted, as you would expect, across News UK titles (both a wrap around in The Sun and full page ads in The Times so far this week). Has there been any truly external, 3rd party paid-for advertising so far. A little, I think, on terrestrial TV, but so far not the major, all guns blazing ITV campaign we might have expected.
I still think £10m is the sort of sum required to launch a big, ambitious, popular music national show in the face of fierce competition from both BBC and commercial rivals. I'd regularly spend between £0.5m and £1.5m on station launches (aggregated over a 24-36 month period) in either London or big regions/cities. Grossing that up, and discounting for economies of scale but adding inflation, I think a biggish number is needed to cut through nationally at the level required. Quite possibly the big guns are being saved for later - a strategy I'd support, using the barter and in-house promotion, alongside inevitable launch pr, as a first salvo in the war. But I think they must know this is a "go big or go home" play - especially if they want to get weekly reach into the millions, which they must in order to make a return.
The biggest delta to the original numbers I quoted last year has been the decision to only run sponsorship at breakfast, and not advertising. Although breakfast only counts for 3 out of 24 hours (so around 12.5% of spots available by number), the size of the audience, and its prominence within the output, means weekday breakfast would on most stations generate a good 20%-25% of the total revenue booked across a year. I'd estimated they need £20m in annual revenues by the end of this five year period for the station to be making sufficient profits to be deemed a success. If you are going to block the easiest £5m of that off the bat, it makes the rest of the project that much harder to succeed. In the short term it will undoubtedly make the show more comfortable for new listeners - but in the long term will it fatally undermine the economics? It's all to play for, and the good news for all commercial radio listeners is it will put huge pressure on other stations to limit their own commercial exposure. For too long now operators have overloaded stations, particularly at breakfast time, with too many commercial messages. Chris may well force a rethink, if he succeeds in taking listeners away with a format and music mix closer to his commercial rivals than ever was the case on R2. Heart, Smooth, Magic and Absolute together have a size equivalent to R2, so The Wireless Group programming gurus will be training their guns on them as well as Chris's former BBC home.
On to Scala, a smaller, but no less interesting new play. Simon Mayo is, like Chris, a hugely talented and experienced radio player at the highest level. He doesn't of course have Chris's level of fame, nor the desire to get up at 4am again in order to host the breakfast show on this new station as he is booked in to mid-mornings (as a former R1 breakfast host, he knows the pain). Nevertheless a good six figure annual fee, alongside some other reasonable talents, will mean a programming budget I'd guess at c £1m per annum. Matt Deegan has nicely blogged here about the likely feel to the output. The transmission capacity for Scala is being found on DAB multiplex D2 from other channels being either discontinued or possibly having their bandwidth reduced, so arguably at nil additional cost to Bauer. But, to make a fair comparison, we should budget, say £0.5m per annum as the cost of using this capacity, which could be sold to 3rd parties if Bauer really didn't want or need it. Add in £0.5m for other incremental back-room/admin costs and you have a station which should be able to operate on a £2m per annum budget. Realistically this is not a staton which is going to "go big or go home" on its marketing. Slow burn is the order of the day here I'd guess. Bauer don't have an obvious newspaper or high profile magazine in their stable to use as a promotional vehicle - but I could imagine creative deals where, say, The Guardian could be partnered with to promote the station, in return for exposure for that newspaper across the Bauer Radio portfolio. You are still going to need some hard cash to get your marketing message across - but I could see £2m-£3m over the first couple of years doing a decent job.
So maybe a £2m marketing spend, and a couple of years supporting a £2m per annum cost base. That would suggest in round terms a £5m cash investment. Can that be recouped? Of course neither Bauer or News UK are selling companies, but you do need to crunch numbers as though you are in order to establish value for existing shareholders. My investment rule of thumb is that if you can create value that is 3 x your investment, that represents a decent return. That would imply a £15m value is needed. In turn, using pretty standard value multiples for Scala I'd think an asset value of 10.0x your annual profits is a sensible metric (although I had used a slightly punchier 12.0x for Virgin). That means the station needs to be making an operating profit of around £1.5m. Assuming royalties, commissions and incremental sales costs (Bauer already has a big national team so these won't be high) take off 20% of any revenue earned, that means they would need annual revenues of £4m-£5m to make a £1.5m profit.
Commercial stations tend to generate roughly £1 of national advertising per year for every weekly hour of listening they achieve (that figure is simply the number of listeners x how long they listen each week). UK radio as a whole generates 470m listening hours each week, and total national advertising and sponsorship (including the rapidly growing pot of digital revenues) ran at a little under £500m in 2018. Some stations will do better than average, some worse, but Scala, backed by Bauer's pretty significant presence in the national marketplace, will trade at par I'd think.
So that implies they need around 4m listening hours per week. Both Radio 3 and Classic FM get around the same time spent listening to them each week (6.5 and 6.8 hours respectively), so there's no reason to suspect Scala won't get 6 average hours if its programming is good. So to get 4m listening hours it will need to reach 650,000 to 700,000 listeners. Classic's weekly audience is 5.2m, although it of course benefits both from a significant heritage, a great UK wide FM network, and a presence on the D1 DAB platform, which has excellent UK coverage. Scala will be DAB only, with no heritage, and will only be on the less extensive D2 platform. Despite this I think 650,000-700,000 listeners is a realistic aim, being just 15% of Classic's current audience, and probably only around 10% of the combined audience of Classic and R3, which I'd guess at between 6m-7m (R3 has 1.9m listeners, but there's only partial sharing of listeners).
So Scala is less risky financially than Virgin, but perhaps not with the overall upside of the Wireless/Evans enterprise. But perhaps that's inevitable, Bauer are the UKs 2nd largest group, behind Global, and their goal must be relatively safe, incremental growth to try and close that gap. Wireless/News UK are some way behind, so the risks, and rewards, need to be higher.
Let battle commence
Monday, 3 September 2018
Evans
It’s been some morning in uk radio. The news that Chris Evans is departing BBC R2, the UKs biggest radio station by some margin, for the digital-only Virgin Radio really has sent shock waves through the broadcasting establishment.
Others including Matt Deegan and John Myers have looked at the implications for Evans himself, and R2.
If I may, let me just focus my thoughts on my area of expertise - the financial implications for News UK/Wireless Group with this huge and risky play.
I have no inside knowledge of Chris’s offer from Virgin, but let me guess at £3m p.a.. He was on nearly £2m at the BBC before being asked to take a cut recently, and will certainly have wanted, in making this move, to have proved his commercial value.
Let’s also assume a one-off £10m to launch and promote the show in a significant, credible fashion across the U.K., on top of guaranteed cross-promotion on News UK titles.
Let's also assume this is a 5 year play.
I’ll also assume generic ongoing production and marketing will add up to £2m p.a. over the five years
Add in another £1m p.a. to hire two or three additional big names for the station - Chris followed by people no one's heard of won't work (X is a good example, where the signing of Moyles was well backed up through the day).
So £6m p.a. additional investment for 5 years - that’s £30m.
This means in total a £40m investment including that large launch campaign.
[And this is on top of TX costs of c £1m p.a. and other backroom costs (such as sales, which I'll get to in a minute)]
You’d want your station to be worth £100m-£120m in 5 years to justify that. Normally risky ventures need to demonstrate at least a 3 x money return for investors - and I doubt News UK will have vastly different metrics.
That would mean sustainable profits of £8m-£10m will be needed by that point.
Given ongoing costs of £6m-£7m, that means you need revenues of £20m or so.
That £20m would be offset by 10% royalties, and, say 15% in terms of sales costs, so you'd be left with £15m. Take off the £7m in costs and you are left with an £8m profit on £20m sales. That's a very healthy 40% profit margin - normally an excellent return for a radio brand.
So £20m in revenues just about gets you to a profit which can justify the investment.
That £20m is about 5% of total uk national radio advertising (or it will be in 5 or so years time).
So you’ll need around 5% of Commercial Radio audiences to achieve that. Normally I'd argue you'd need more, because the big battalions from Global and Bauer (Heart, Kiss, Capital, City Network) will take an unfair share - but even though News/Wireless are some way behind Global and Bauer at No. 3, Chris himself will command an offsetting premium - so 5% is a good benchmark.
That’s 25m hours - which is roughly 4m listeners listening for 6 hours per week.
I think Chris will get his listeners to stick with him, so 6 hours a week is more than possible. BBC 6 Music gets 10, and X network gets 8 - but they are in a less competitive bit of the market for music, whereas Virgin with Chris will clearly be mainstream, going up against Heart, Magic, Smooth, Capital, Kiss and their digital offshoots, and they all cluster around 5-6 hours per listener per week.
4m listeners though, with no FM presence, just DAB and online.
The best digital-only station today is BBC 6 Music, which has just over 2.4m. The best digital-only commercial station, Kisstory, has 2m. X network, which is a bit of a Hybrid, gets 1.7m, but a chunk of them are on FM in London and Manchester. Another hybrid, Absolute Radio (the main AM/DAB brand, which is also on FM in London and the Midlands) gets 2.5m.
But I'd think if anyone can break through this middling 2-2.5m listeners onto the ground occupied by the major hybrid FM/DAB networks, Chris can. Particularly if he's backed by a big, sustained marketing campaign (and lots of cross-promotion in The Sun etc).
So the numbers can be made to work - but it's undoubtedly the biggest pure-play brand development gamble taken in UK radio since the original nationals (Classic, Talk and Virgin (sic)) launched 25 years ago.
It'll be great to watch it play out.
Others including Matt Deegan and John Myers have looked at the implications for Evans himself, and R2.
If I may, let me just focus my thoughts on my area of expertise - the financial implications for News UK/Wireless Group with this huge and risky play.
I have no inside knowledge of Chris’s offer from Virgin, but let me guess at £3m p.a.. He was on nearly £2m at the BBC before being asked to take a cut recently, and will certainly have wanted, in making this move, to have proved his commercial value.
Let’s also assume a one-off £10m to launch and promote the show in a significant, credible fashion across the U.K., on top of guaranteed cross-promotion on News UK titles.
Let's also assume this is a 5 year play.
I’ll also assume generic ongoing production and marketing will add up to £2m p.a. over the five years
Add in another £1m p.a. to hire two or three additional big names for the station - Chris followed by people no one's heard of won't work (X is a good example, where the signing of Moyles was well backed up through the day).
So £6m p.a. additional investment for 5 years - that’s £30m.
This means in total a £40m investment including that large launch campaign.
[And this is on top of TX costs of c £1m p.a. and other backroom costs (such as sales, which I'll get to in a minute)]
You’d want your station to be worth £100m-£120m in 5 years to justify that. Normally risky ventures need to demonstrate at least a 3 x money return for investors - and I doubt News UK will have vastly different metrics.
That would mean sustainable profits of £8m-£10m will be needed by that point.
Given ongoing costs of £6m-£7m, that means you need revenues of £20m or so.
That £20m would be offset by 10% royalties, and, say 15% in terms of sales costs, so you'd be left with £15m. Take off the £7m in costs and you are left with an £8m profit on £20m sales. That's a very healthy 40% profit margin - normally an excellent return for a radio brand.
So £20m in revenues just about gets you to a profit which can justify the investment.
That £20m is about 5% of total uk national radio advertising (or it will be in 5 or so years time).
So you’ll need around 5% of Commercial Radio audiences to achieve that. Normally I'd argue you'd need more, because the big battalions from Global and Bauer (Heart, Kiss, Capital, City Network) will take an unfair share - but even though News/Wireless are some way behind Global and Bauer at No. 3, Chris himself will command an offsetting premium - so 5% is a good benchmark.
That’s 25m hours - which is roughly 4m listeners listening for 6 hours per week.
I think Chris will get his listeners to stick with him, so 6 hours a week is more than possible. BBC 6 Music gets 10, and X network gets 8 - but they are in a less competitive bit of the market for music, whereas Virgin with Chris will clearly be mainstream, going up against Heart, Magic, Smooth, Capital, Kiss and their digital offshoots, and they all cluster around 5-6 hours per listener per week.
4m listeners though, with no FM presence, just DAB and online.
The best digital-only station today is BBC 6 Music, which has just over 2.4m. The best digital-only commercial station, Kisstory, has 2m. X network, which is a bit of a Hybrid, gets 1.7m, but a chunk of them are on FM in London and Manchester. Another hybrid, Absolute Radio (the main AM/DAB brand, which is also on FM in London and the Midlands) gets 2.5m.
But I'd think if anyone can break through this middling 2-2.5m listeners onto the ground occupied by the major hybrid FM/DAB networks, Chris can. Particularly if he's backed by a big, sustained marketing campaign (and lots of cross-promotion in The Sun etc).
So the numbers can be made to work - but it's undoubtedly the biggest pure-play brand development gamble taken in UK radio since the original nationals (Classic, Talk and Virgin (sic)) launched 25 years ago.
It'll be great to watch it play out.
Saturday, 18 August 2018
Carb Wars
Here's another in an occasional series of blog posts on matters of health, fitness and longevity, a subject I explored in detail in my book "The Life of Riley"
The Lancet, one of the world's leading medical journals, in a sub-publication on Public Health, published a report this week claiming there were life shortening effects of eating too few, or too many, carbs, and how plant based fats and proteins were superior to animal fat and protein in extending lifespans if you were unfortunate enough to be eating too few carbs to begin with. You can read the study here.
This study has gained a significant amount of press coverage, essentially saying it's safe to eat a significant proportion of your diet as carbs again (50% is the suggestion), and that we shouldn't adopt a low carb/high fat approach to eating, and should replace meat with more plant foods, if we want to live longer.
I've looked at an awful lot of scientific studies over the last few years which have suggested eating too many carbs is not good for you, leading to insulin resistance and then weight gain, and listened to a lot of folk who have embarked upon a lifestyle which has reduced their carb intake in order to successfully lose weight and in some cases combat the effects of type 2 diabetes, and I have to say this latest study seemed to pull the rug from under that approach.
Except...having read it, I'm a little dubious about the basis for its findings.
The main study (the scientists also added in other studies but didn't give specific details on them in the report linked to above) was of just over 15,000 adults in the US. These folk were asked to fill out a food diary when they enrolled in the study in the late 1980s, and then again in the early to mid-90s (1993-1995). Around 20 years later (by 2013) the authors analysed who had died out of this cohort (about 6,000 out of the original 15,000), and from that produced a risk ratio for various levels of carbohydrate consumption, having split the participants into five groups, with the lowest fifth eating just 37% of their calories as carbs, and with the highest fifth eating 61% of their calories as carbs.
However, this 2013 mortality analysis was based entirely on what these people were claiming to have eaten 20-25 years earlier! No food intake questionnaire was undertaken after 1995. This seems like a significant omission. I certainly don't eat today what I ate 25 years ago, and I think knowledge of healthy eating has advanced markedly in the last two to three decades, irrespective of the percentage of intake you have as carbs or protein or fat. So for all of these study participants, some tracking over a longer time period of changes in dietary habits would seem like a pre-requisite before pronouncing on what is likely to kill you sooner rather than later.
Just to confirm this point, anyone who, between survey one in the late 80s and survey 2 in the early 90s, had already succumbed to heart disease, diabetes or stroke was removed from the study. This was done, the authors said, to eliminate the possibility that these people would change their diet following these illnesses and therefore skew the results. The implication of this of course, is their belief that those who remained in the study would not change their dietary habits. But, as the authors themselves said "....Another limitation of this study is that diet was only assessed at two time intervals, spanning a 6-year period, and dietary patterns could change during 25 years....."
Looking at the data for the participants, it is worth noting that their average age at the start of the study was 54, with a mean BMI of around 27.7. In fact the group with the lowest carb intake at the start of the study had the highest mean BMI at 28, with the highest carb group having the lowest BMI at 27.4. Interestingly, on average, the study participants put on around 1 point in BMI between the first and second questionnaire, to 28.7. In addition, 70% of this initial low carb group were current or former smokers, vs 51% for the highest carb group, and had the lowest levels of physical exercise measured at just 15% being active, vs 20% for the highest carb group. It almost seems like the low carb group started out as the unhealthiest...and perhaps stayed that way?
The description of this low carb group in the report itself bears repeating here "....Participants who consumed a relatively low percentage of total energy from carbohydrates ....... were more likely to be young, male, a self-reported race other than black, college graduates, have high body-mass index, exercise less during leisure time, have high household income, smoke cigarettes, and have diabetes...." This profile of unhealthy, overweight ex or current smokers and potential diabetics, is nothing like that which you would attach to those who have chosen to live a low carb lifestyle today - all of whom know how important physical exercise and maintaining a lean body weight is as part of their approach to life.
The other significant query I have with this study relates again to the initial questionnaire, which was used to produce a data point, recorded in the main table, showing that the "mean" calorific intake recorded for all participants in the late 1980s was around 1,600 calories per day for all of the groups from low carb to high carb.
I would say 1,600 calories is very, very low - being 600-700 calories below recommended levels for weight maintenance. The recommended level of calorie intake for an adult in the UK is 2,000 for a woman and 2,500 for a man (NHS data here) so a population average of 2,250. Mainstream nutritional advice is to bring calorie levels per day down by around 500 from this figure to lose weight, and although I'm not convinced that is great advice per se, I don't think anyone in the mainstream of this debate would go round suggesting that it is healthy or that people can cope for long only eating 1,600 calories. So these participants, who had a mean BMI of 27.7 (i.e. already quite overweight) were eating 30% fewer calories each day than recommended for normal folk - and six years later had managed to put on a point in their BMI! This 1,600 calories per day figure just doesn't seem right to me. We already know from alcohol studies that people under-report their drinking to a significant degree - perhaps people also under-report their eating - particularly of foods which they think are unhealthy?
Something was definitely not right with the questionnaire - or rather the responses to it. If people were either deliberately or accidentally not telling the researchers what they were eating, and specifically their total amount of consumption, how can we really know what % of their diet was carb vs fat vs protein etc?
I'd also really like to know what constituted animal fat and protein for these people - was it grilled steaks at home with a salad, or fast food burgers in a bun with french fries at a greasy spoon?
The study goes on to discuss animal vs plant protein & fats for this low carb group, and how more plant and less animal helps ameliorate some of the claimed negative effects of the carb reduction. However, as I am quite skeptical about the whole study, this element seems more than a step too far, trying to unpick second order effects on what started out as an investigation into carbs v protein v fat in general.
If this 15,000 study were representative of the US population as a whole, I doubt many of them were at all aware of the benefits of particular structured diets back in the 80s when their food habits were being examined. Throwing that lack of knowledge forward 25 years, to castigate a particular approach to diet today, seems to me at least to be a stretch.
Another recent study, published last year also in The Lancet, and based again on validated food frequency questionnaires on 135,000 individuals enrolled from 2003-2013, concluded that "......High carbohydrate intake was associated with higher risk of total mortality, whereas total fat and individual types of fat were related to lower total mortality. Total fat and types of fat were not associated with cardiovascular disease, myocardial infarction, or cardiovascular disease mortality, whereas saturated fat had an inverse association with stroke. Global dietary guidelines should be reconsidered in light of these findings....."
In this study, levels of mortality rose throughout the carbohydrate groups from lowest to highest (the bands were a little higher overall here, with the low group eating 46%, and the high group 77% of their food as carbs) and fats from animals (saturated fats mainly come from dairy, fatty meats etc) appeared to be beneficial. Quite a different set of conclusions - although high carb was definitely bad for longevity in both studies.
Talk to anyone pursuing a considered Low Carb / High Fat approach today (including those who are Keto or full carnivore), and their animal intake will be fresh meat, fresh fish, all well cooked, and with plenty of veg (for most), and using mostly olive oil or coconut oil for cooking and dressings. Many will supplement this with nuts, and some (like me) who are just plain "low carb" will try to ensure they eat fewer carbs overall, and their carbs are mainly whole grain or low GI as a matter of choice. I suspect this is a long, long way from the dietary habits of those people who initially started in the low carb group in this study, and I'm not convinced therefore this most recent study has much to offer in terms of dietary advice today, except to confirm really high levels of carbs are not good for you.
The Lancet, one of the world's leading medical journals, in a sub-publication on Public Health, published a report this week claiming there were life shortening effects of eating too few, or too many, carbs, and how plant based fats and proteins were superior to animal fat and protein in extending lifespans if you were unfortunate enough to be eating too few carbs to begin with. You can read the study here.
This study has gained a significant amount of press coverage, essentially saying it's safe to eat a significant proportion of your diet as carbs again (50% is the suggestion), and that we shouldn't adopt a low carb/high fat approach to eating, and should replace meat with more plant foods, if we want to live longer.
I've looked at an awful lot of scientific studies over the last few years which have suggested eating too many carbs is not good for you, leading to insulin resistance and then weight gain, and listened to a lot of folk who have embarked upon a lifestyle which has reduced their carb intake in order to successfully lose weight and in some cases combat the effects of type 2 diabetes, and I have to say this latest study seemed to pull the rug from under that approach.
Except...having read it, I'm a little dubious about the basis for its findings.
The main study (the scientists also added in other studies but didn't give specific details on them in the report linked to above) was of just over 15,000 adults in the US. These folk were asked to fill out a food diary when they enrolled in the study in the late 1980s, and then again in the early to mid-90s (1993-1995). Around 20 years later (by 2013) the authors analysed who had died out of this cohort (about 6,000 out of the original 15,000), and from that produced a risk ratio for various levels of carbohydrate consumption, having split the participants into five groups, with the lowest fifth eating just 37% of their calories as carbs, and with the highest fifth eating 61% of their calories as carbs.
However, this 2013 mortality analysis was based entirely on what these people were claiming to have eaten 20-25 years earlier! No food intake questionnaire was undertaken after 1995. This seems like a significant omission. I certainly don't eat today what I ate 25 years ago, and I think knowledge of healthy eating has advanced markedly in the last two to three decades, irrespective of the percentage of intake you have as carbs or protein or fat. So for all of these study participants, some tracking over a longer time period of changes in dietary habits would seem like a pre-requisite before pronouncing on what is likely to kill you sooner rather than later.
Just to confirm this point, anyone who, between survey one in the late 80s and survey 2 in the early 90s, had already succumbed to heart disease, diabetes or stroke was removed from the study. This was done, the authors said, to eliminate the possibility that these people would change their diet following these illnesses and therefore skew the results. The implication of this of course, is their belief that those who remained in the study would not change their dietary habits. But, as the authors themselves said "....Another limitation of this study is that diet was only assessed at two time intervals, spanning a 6-year period, and dietary patterns could change during 25 years....."
Looking at the data for the participants, it is worth noting that their average age at the start of the study was 54, with a mean BMI of around 27.7. In fact the group with the lowest carb intake at the start of the study had the highest mean BMI at 28, with the highest carb group having the lowest BMI at 27.4. Interestingly, on average, the study participants put on around 1 point in BMI between the first and second questionnaire, to 28.7. In addition, 70% of this initial low carb group were current or former smokers, vs 51% for the highest carb group, and had the lowest levels of physical exercise measured at just 15% being active, vs 20% for the highest carb group. It almost seems like the low carb group started out as the unhealthiest...and perhaps stayed that way?
The description of this low carb group in the report itself bears repeating here "....Participants who consumed a relatively low percentage of total energy from carbohydrates ....... were more likely to be young, male, a self-reported race other than black, college graduates, have high body-mass index, exercise less during leisure time, have high household income, smoke cigarettes, and have diabetes...." This profile of unhealthy, overweight ex or current smokers and potential diabetics, is nothing like that which you would attach to those who have chosen to live a low carb lifestyle today - all of whom know how important physical exercise and maintaining a lean body weight is as part of their approach to life.
The other significant query I have with this study relates again to the initial questionnaire, which was used to produce a data point, recorded in the main table, showing that the "mean" calorific intake recorded for all participants in the late 1980s was around 1,600 calories per day for all of the groups from low carb to high carb.
I would say 1,600 calories is very, very low - being 600-700 calories below recommended levels for weight maintenance. The recommended level of calorie intake for an adult in the UK is 2,000 for a woman and 2,500 for a man (NHS data here) so a population average of 2,250. Mainstream nutritional advice is to bring calorie levels per day down by around 500 from this figure to lose weight, and although I'm not convinced that is great advice per se, I don't think anyone in the mainstream of this debate would go round suggesting that it is healthy or that people can cope for long only eating 1,600 calories. So these participants, who had a mean BMI of 27.7 (i.e. already quite overweight) were eating 30% fewer calories each day than recommended for normal folk - and six years later had managed to put on a point in their BMI! This 1,600 calories per day figure just doesn't seem right to me. We already know from alcohol studies that people under-report their drinking to a significant degree - perhaps people also under-report their eating - particularly of foods which they think are unhealthy?
Something was definitely not right with the questionnaire - or rather the responses to it. If people were either deliberately or accidentally not telling the researchers what they were eating, and specifically their total amount of consumption, how can we really know what % of their diet was carb vs fat vs protein etc?
I'd also really like to know what constituted animal fat and protein for these people - was it grilled steaks at home with a salad, or fast food burgers in a bun with french fries at a greasy spoon?
The study goes on to discuss animal vs plant protein & fats for this low carb group, and how more plant and less animal helps ameliorate some of the claimed negative effects of the carb reduction. However, as I am quite skeptical about the whole study, this element seems more than a step too far, trying to unpick second order effects on what started out as an investigation into carbs v protein v fat in general.
If this 15,000 study were representative of the US population as a whole, I doubt many of them were at all aware of the benefits of particular structured diets back in the 80s when their food habits were being examined. Throwing that lack of knowledge forward 25 years, to castigate a particular approach to diet today, seems to me at least to be a stretch.
Another recent study, published last year also in The Lancet, and based again on validated food frequency questionnaires on 135,000 individuals enrolled from 2003-2013, concluded that "......High carbohydrate intake was associated with higher risk of total mortality, whereas total fat and individual types of fat were related to lower total mortality. Total fat and types of fat were not associated with cardiovascular disease, myocardial infarction, or cardiovascular disease mortality, whereas saturated fat had an inverse association with stroke. Global dietary guidelines should be reconsidered in light of these findings....."
In this study, levels of mortality rose throughout the carbohydrate groups from lowest to highest (the bands were a little higher overall here, with the low group eating 46%, and the high group 77% of their food as carbs) and fats from animals (saturated fats mainly come from dairy, fatty meats etc) appeared to be beneficial. Quite a different set of conclusions - although high carb was definitely bad for longevity in both studies.
Talk to anyone pursuing a considered Low Carb / High Fat approach today (including those who are Keto or full carnivore), and their animal intake will be fresh meat, fresh fish, all well cooked, and with plenty of veg (for most), and using mostly olive oil or coconut oil for cooking and dressings. Many will supplement this with nuts, and some (like me) who are just plain "low carb" will try to ensure they eat fewer carbs overall, and their carbs are mainly whole grain or low GI as a matter of choice. I suspect this is a long, long way from the dietary habits of those people who initially started in the low carb group in this study, and I'm not convinced therefore this most recent study has much to offer in terms of dietary advice today, except to confirm really high levels of carbs are not good for you.
Sunday, 15 April 2018
Spin the bottle
I've not blogged or written about health for some time, since the publication of my book "The Life of Riley", but the coverage generated by the research on safe levels of drinking, published this week (link here) produced some wild headlines across the press, warning of the dangers of demon drink. My interest in health, combined with my knowledge of the workings of the press, and some rudimentary graduate level stats knowledge, were all piqued by this.
And yet the analysis done actually seems to me to give moderate (and even slightly heavier than moderate) levels of drinking a pretty reasonable bill of health, and overall was much in line with lots of previous research (much of which I referenced in my book), which most people vaguely interested will recall as suggesting moderate drinking was not only safe, but seemed to be beneficial for health.
How is this possible?
Well the report itself was a meta analysis of a number of previous studies, merging 600,000 respondents over many years into a giant database for analysis. A good approach, and one which normally removes the wrinkles and oddities found in smaller pieces of research.
Where this report differs from many previous meta-analyses is the base population it was measuring and comparing. Most previous research has looked at the population as a whole, both drinkers and non-drinkers, in order to compare rates of mortality (i.e. how long we’ve got left, on average, given our age, sex, lifestyles etc.)
This analysis however only compared mortality rates of all current drinkers, using those who drank, but drank the least, as the base line (so giving them an index of 1). These people drank between 0-50 grams of alcohol per week. A standard bottle of wine has around 80 grams, and you can get 4 decent, medium sized glasses from a bottle - so this control group were drinking under 3 medium sized glasses of wine per week ( I’m just going to use glasses of wine for this analysis, but the comparisons hold true for beer etc, just with different volumes).
This base line group were then compared to folk who drank 50-100 grams, 100-150 grams, 150-250 grams, 250-350 grams and 350 grams+ each week (although the groups were split differently in the text, tables and graphs, for no obvious reason, which is unhelpful when trying to analyse and critique).
However, in the report's text the authors have merged the two lighter drinking groups (0-50 grams and 50-100 grams) into just one 0-100 grams group as there appeared to be little difference in mortality rates between them (although see below for the raw data) - so this larger base are those people who only drink up to 5-6 glasses of wine per week, with an average of around 3 glasses. These are deemed the least at risk and provide the base level of risk used to compare other groups to. For reference lets call this group “light drinkers 1 & 2”
Those in the group that drink 100-200 grams (so up to 10 glasses of wine per week or 2 1/2 bottles) were slightly more at risk, and estimates were that a 40 year old who drank at this level would lose around 6 months of life compared to the light drinkers. But this is over the remainder of his/her life, which might reasonably be expected to be 45-50 years - so maybe a 1% reduction overall. This hardly seems worth worrying about in my view. 200 grams per week represents 25 units in UK drinking jargon, which is of course way over the current suggested limit of 14 units per week for both men and women, despite this apparently relatively trivial level of increased risk. Lets call these people “moderate drinkers 1 & 2” as the data splits them into two groups.
Those drinking 200-350 grams had a worse life expectancy. In the middle of this band at around 275 grams you’d be drinking 3 1/2 bottles of wine a week (or half a bottle = 2 medium glasses a night), but at age 40, if you continued to drink at this level, the suggestion is you would lose 1-2 years of life compared to the lightest drinkers. This is a 3% reduction and, doing a bit of maths, I think this is where that “each drink takes 30 minutes off your life” headline reported in the press comes from (11 extra drinks per week at 30 minutes lost each drink over 50 years knocks off 1.6 years). Let’s call this group “regular drinkers”.
Those drinking over 350 grams, heavy drinkers, who are nudging a bottle of wine a night, every night (or more) had a 4-5 year loss of life in comparison - so around a 10% reduction. That sort of reduction ought not to be dismissed, and no one sensible could be shocked to discover that knocking back that much booze every night for your entire adult life might carry some significant elevated risk of illness or disease.
But, the confounding factor in this research is the absence of those who simply don’t drink - not former drinkers who may have given up for health reasons, but those who simply don’t like the taste, or who don’t imbibe for religious or other non health related factors.
These people also lived with much higher mortality risk than our super-light drinkers - a risk pretty comparable with those in the second highest drinking group, our “regular drinkers”, those drinking up to 3 1/2 bottles a week (or roughly half a bottle per night).
I understand why the researchers did some analysis excluding non-drinkers, as they do seem to be different in their overall make up. As the researchers stated “... However, we observed notable differences in baseline characteristics between never drinkers and current drinkers (eg, in relation to sex, ethnicity, smoking, and diabetes status.....”. However, to then only make comparisons of death rates, and years lost amongst the drinking sub-group, without also highlighting the flip side of years lost by not drinking at all, seems slightly disingenuous, knowing how the press are likely to end up reporting the paper. The data on non-drinkers is only to be found in the appendices - and no reporter, rushing for a deadline, is going to pore over the minutiae of the report in this fashion. In this sense I think the tone of the main summary, and the subsequent reporting, could be considered somewhat misleading for the layman.
In fact, all levels of drinking up to around 1/2 a bottle per night (so both light and moderate) seemed to provide much lower risk than either not drinking at all or being a regular or heavy drinker.
You’d have to say, looking at the data, that non-drinkers are doing themselves a huge disservice by their restraint, and arguably should be holding their noses two or three times a week and knocking a glass back! But no one in the public health sphere could or would ever say this of course.
In reading the report, I was interested to note the amount of “heavy lifting” being done by the weighting applied to each group. This is where the researchers apply greater weight to, say, female respondents if there are fewer than the number expected within a group, or upweight or downright particular ethnicities or age groups, so as to produce a revised sample more in line with the population as a whole (or balance for smokers, or the obese etc.). This is a perfectly sensible thing to do, but as a man who has been a professional user of weighted statistics for 30 years, with his livelihood dependent upon their accuracy (RAJAR anyone?) I can tell you weighting can produce some strange effects.
Just to show how much effect the weighting had, here is a simple table of the raw data on how many people had died in each group when they were all recontacted, around 8 years later.
Non Drinkers (53,851) 10.7%
V Light Drinkers (177,956) 8.1%
Light drinkers (128,094) 6.0%
Moderate 1 (94,653) 6.0%
Moderate 2 (94,760) 5.9%
Regular (52,020) 6.7%
Heavy drinkers (52,429) 8.4%
Just looking at the raw data, its those at the top end of the moderate banding who were least likely to die, and in fact the very light drinkers had one of the worst mortality rates! And lo and behold it is non-drinkers who were dying off the quickest - much quicker even than heavy drinkers. This is just the raw data though, and I fully accept it needs to be weighted, but intuitively you can see the weighting has had some dramatic effects.
One piece of weighting they didn’t do, and which I’d have liked to see, is a stratification by weight. I’m a pretty tall, lean guy, but I weigh nearly 100 Kg. A small, lean woman could easily weigh only 50Kg. We can’t both surely have the same tolerance for alcohol though, as it must, as a drug, be in some way dose-dependent. Therefore sorting mortality rates by alcohol consumed per Kg of body weight might have produced some interesting findings (the researchers must have had the data, as they had BMI numbers). This is one reason why having no difference in guideline limits between men and women in the UK seems so odd, given different levels of typical body mass (we are alone in the western world in doing this).
Apart from ignoring non-drinkers in their presentation of relative risk and levels of mortality, another concern I have with any alcohol related studies is a point acknowledged by the researchers themselves in this one, who state
“........Nevertheless, our study has some potential limitations. Self-reported alcohol consumption data are prone to bias and are challenging to harmonise across studies conducted over different time periods that used varying instruments and methods to record such data.....”
This is of course a scientific way of saying that people habitually lie about their levels of drinking or simply can’t recall it accurately and on average are prone to significantly under report. In fact numerous comparisons of actual sales data and reported levels of drinking show significant gaps between what respondents were actually drinking and what they were letting on to. The ONS itself, in its latest alcohol drinking habits report here states “It is likely that the data reported here underestimate drinking levels to some extent. Social surveys consistently produce estimates of alcohol consumption that are lower than the levels indicated by alcohol sales data. This is likely to be because people either consciously or unconsciously underestimate their alcohol consumption.”
Far be it for me to be ultra critical or cynical about the data in this most recent analysis, but of the 600,000 drinkers in the sample, fully 300,000 of them claimed to drink on average just 3 glasses of wine (or the equivalent) each week. Really? Half of all drinkers only drink 3 glasses a week? I must be mixing with the wrong crowd.
I doubt the heavy drinkers are capable of much under-reporting given how much they are already admitting to drinking (and there are only a few of them any way, less than 10% of the total), so it must be the light, moderate and regular drinkers who are under-reporting, and it seems to me all of the “drinks per week” discussed above are some way below the reality for most people.
The final query I’d have is why choose age 40 as the baseline point to reference years lost etc?
Clearly one reference point is better than 2 or 3 - but I doubt today's millennials will care much what happens to 40 year olds, and 40 year olds are, I suspect, by and large too busy worrying about jobs, kids, mortgages etc to care too much about what will happen to them when they are 80 or 85. It’s curious too, because the average age of the respondents in the surveys merged for this analysis was 57, so there was some more heavy statistical lifting involved in then “back dating” the results to produce the age 40 estimates. It’s also odd because this late 50s/early 60s cohort is the group that public health officials tell us they are most worried about.
The ONS has a great life expectancy model on its website here, and this forecasts that a typical 57 year old will live for around another 30 years (women 31, men 28).
Using this figure of 30 years longer to live at age 57 as a benchmark, and using 30 minutes lost for every drink per week for each excess drink consumed over the light drinkers, this is what happens when you crunch the data:
So the light drinkers get an extra six months over the average, whilst some moderate drinkers lose a couple of months, regular drinkers are 7-8 months off the average, and even heavy drinkers are under two years below average. Obviously if damage has already been done by prior excess consumption, then that will affect mortality going forward - but most folk looking at this study will probably shrug their shoulders about past indiscretions, saying "what's done is done"
Like many of my friends I am in my late 50s. If our likely life expectancy is another 30 years or so, then the light and moderate drinkers in the group appear fine, and even for the regular drinkers, if every night spent drinking half a bottle of wine lops 7 months or so off the average life expectancy compared to our cohort, I suspect many people would think that’s a trade off worth making.
And yet the analysis done actually seems to me to give moderate (and even slightly heavier than moderate) levels of drinking a pretty reasonable bill of health, and overall was much in line with lots of previous research (much of which I referenced in my book), which most people vaguely interested will recall as suggesting moderate drinking was not only safe, but seemed to be beneficial for health.
How is this possible?
Well the report itself was a meta analysis of a number of previous studies, merging 600,000 respondents over many years into a giant database for analysis. A good approach, and one which normally removes the wrinkles and oddities found in smaller pieces of research.
Where this report differs from many previous meta-analyses is the base population it was measuring and comparing. Most previous research has looked at the population as a whole, both drinkers and non-drinkers, in order to compare rates of mortality (i.e. how long we’ve got left, on average, given our age, sex, lifestyles etc.)
This analysis however only compared mortality rates of all current drinkers, using those who drank, but drank the least, as the base line (so giving them an index of 1). These people drank between 0-50 grams of alcohol per week. A standard bottle of wine has around 80 grams, and you can get 4 decent, medium sized glasses from a bottle - so this control group were drinking under 3 medium sized glasses of wine per week ( I’m just going to use glasses of wine for this analysis, but the comparisons hold true for beer etc, just with different volumes).
This base line group were then compared to folk who drank 50-100 grams, 100-150 grams, 150-250 grams, 250-350 grams and 350 grams+ each week (although the groups were split differently in the text, tables and graphs, for no obvious reason, which is unhelpful when trying to analyse and critique).
However, in the report's text the authors have merged the two lighter drinking groups (0-50 grams and 50-100 grams) into just one 0-100 grams group as there appeared to be little difference in mortality rates between them (although see below for the raw data) - so this larger base are those people who only drink up to 5-6 glasses of wine per week, with an average of around 3 glasses. These are deemed the least at risk and provide the base level of risk used to compare other groups to. For reference lets call this group “light drinkers 1 & 2”
Those in the group that drink 100-200 grams (so up to 10 glasses of wine per week or 2 1/2 bottles) were slightly more at risk, and estimates were that a 40 year old who drank at this level would lose around 6 months of life compared to the light drinkers. But this is over the remainder of his/her life, which might reasonably be expected to be 45-50 years - so maybe a 1% reduction overall. This hardly seems worth worrying about in my view. 200 grams per week represents 25 units in UK drinking jargon, which is of course way over the current suggested limit of 14 units per week for both men and women, despite this apparently relatively trivial level of increased risk. Lets call these people “moderate drinkers 1 & 2” as the data splits them into two groups.
Those drinking 200-350 grams had a worse life expectancy. In the middle of this band at around 275 grams you’d be drinking 3 1/2 bottles of wine a week (or half a bottle = 2 medium glasses a night), but at age 40, if you continued to drink at this level, the suggestion is you would lose 1-2 years of life compared to the lightest drinkers. This is a 3% reduction and, doing a bit of maths, I think this is where that “each drink takes 30 minutes off your life” headline reported in the press comes from (11 extra drinks per week at 30 minutes lost each drink over 50 years knocks off 1.6 years). Let’s call this group “regular drinkers”.
Those drinking over 350 grams, heavy drinkers, who are nudging a bottle of wine a night, every night (or more) had a 4-5 year loss of life in comparison - so around a 10% reduction. That sort of reduction ought not to be dismissed, and no one sensible could be shocked to discover that knocking back that much booze every night for your entire adult life might carry some significant elevated risk of illness or disease.
But, the confounding factor in this research is the absence of those who simply don’t drink - not former drinkers who may have given up for health reasons, but those who simply don’t like the taste, or who don’t imbibe for religious or other non health related factors.
These people also lived with much higher mortality risk than our super-light drinkers - a risk pretty comparable with those in the second highest drinking group, our “regular drinkers”, those drinking up to 3 1/2 bottles a week (or roughly half a bottle per night).
I understand why the researchers did some analysis excluding non-drinkers, as they do seem to be different in their overall make up. As the researchers stated “... However, we observed notable differences in baseline characteristics between never drinkers and current drinkers (eg, in relation to sex, ethnicity, smoking, and diabetes status.....”. However, to then only make comparisons of death rates, and years lost amongst the drinking sub-group, without also highlighting the flip side of years lost by not drinking at all, seems slightly disingenuous, knowing how the press are likely to end up reporting the paper. The data on non-drinkers is only to be found in the appendices - and no reporter, rushing for a deadline, is going to pore over the minutiae of the report in this fashion. In this sense I think the tone of the main summary, and the subsequent reporting, could be considered somewhat misleading for the layman.
In fact, all levels of drinking up to around 1/2 a bottle per night (so both light and moderate) seemed to provide much lower risk than either not drinking at all or being a regular or heavy drinker.
You’d have to say, looking at the data, that non-drinkers are doing themselves a huge disservice by their restraint, and arguably should be holding their noses two or three times a week and knocking a glass back! But no one in the public health sphere could or would ever say this of course.
In reading the report, I was interested to note the amount of “heavy lifting” being done by the weighting applied to each group. This is where the researchers apply greater weight to, say, female respondents if there are fewer than the number expected within a group, or upweight or downright particular ethnicities or age groups, so as to produce a revised sample more in line with the population as a whole (or balance for smokers, or the obese etc.). This is a perfectly sensible thing to do, but as a man who has been a professional user of weighted statistics for 30 years, with his livelihood dependent upon their accuracy (RAJAR anyone?) I can tell you weighting can produce some strange effects.
Just to show how much effect the weighting had, here is a simple table of the raw data on how many people had died in each group when they were all recontacted, around 8 years later.
Non Drinkers (53,851) 10.7%
V Light Drinkers (177,956) 8.1%
Light drinkers (128,094) 6.0%
Moderate 1 (94,653) 6.0%
Moderate 2 (94,760) 5.9%
Regular (52,020) 6.7%
Heavy drinkers (52,429) 8.4%
Just looking at the raw data, its those at the top end of the moderate banding who were least likely to die, and in fact the very light drinkers had one of the worst mortality rates! And lo and behold it is non-drinkers who were dying off the quickest - much quicker even than heavy drinkers. This is just the raw data though, and I fully accept it needs to be weighted, but intuitively you can see the weighting has had some dramatic effects.
One piece of weighting they didn’t do, and which I’d have liked to see, is a stratification by weight. I’m a pretty tall, lean guy, but I weigh nearly 100 Kg. A small, lean woman could easily weigh only 50Kg. We can’t both surely have the same tolerance for alcohol though, as it must, as a drug, be in some way dose-dependent. Therefore sorting mortality rates by alcohol consumed per Kg of body weight might have produced some interesting findings (the researchers must have had the data, as they had BMI numbers). This is one reason why having no difference in guideline limits between men and women in the UK seems so odd, given different levels of typical body mass (we are alone in the western world in doing this).
Apart from ignoring non-drinkers in their presentation of relative risk and levels of mortality, another concern I have with any alcohol related studies is a point acknowledged by the researchers themselves in this one, who state
“........Nevertheless, our study has some potential limitations. Self-reported alcohol consumption data are prone to bias and are challenging to harmonise across studies conducted over different time periods that used varying instruments and methods to record such data.....”
This is of course a scientific way of saying that people habitually lie about their levels of drinking or simply can’t recall it accurately and on average are prone to significantly under report. In fact numerous comparisons of actual sales data and reported levels of drinking show significant gaps between what respondents were actually drinking and what they were letting on to. The ONS itself, in its latest alcohol drinking habits report here states “It is likely that the data reported here underestimate drinking levels to some extent. Social surveys consistently produce estimates of alcohol consumption that are lower than the levels indicated by alcohol sales data. This is likely to be because people either consciously or unconsciously underestimate their alcohol consumption.”
Far be it for me to be ultra critical or cynical about the data in this most recent analysis, but of the 600,000 drinkers in the sample, fully 300,000 of them claimed to drink on average just 3 glasses of wine (or the equivalent) each week. Really? Half of all drinkers only drink 3 glasses a week? I must be mixing with the wrong crowd.
I doubt the heavy drinkers are capable of much under-reporting given how much they are already admitting to drinking (and there are only a few of them any way, less than 10% of the total), so it must be the light, moderate and regular drinkers who are under-reporting, and it seems to me all of the “drinks per week” discussed above are some way below the reality for most people.
The final query I’d have is why choose age 40 as the baseline point to reference years lost etc?
Clearly one reference point is better than 2 or 3 - but I doubt today's millennials will care much what happens to 40 year olds, and 40 year olds are, I suspect, by and large too busy worrying about jobs, kids, mortgages etc to care too much about what will happen to them when they are 80 or 85. It’s curious too, because the average age of the respondents in the surveys merged for this analysis was 57, so there was some more heavy statistical lifting involved in then “back dating” the results to produce the age 40 estimates. It’s also odd because this late 50s/early 60s cohort is the group that public health officials tell us they are most worried about.
The ONS has a great life expectancy model on its website here, and this forecasts that a typical 57 year old will live for around another 30 years (women 31, men 28).
Using this figure of 30 years longer to live at age 57 as a benchmark, and using 30 minutes lost for every drink per week for each excess drink consumed over the light drinkers, this is what happens when you crunch the data:
| Non | Light | Mod 1 | Mod 2 | regular | heavy | all | |
| Number in sample | 53851 | 306050 | 94653 | 94760 | 52020 | 52429 | 653763 |
| age | 58 | 57.2 | 57.4 | 57.2 | 56.6 | 56.4 | 57.2 |
| mean units per week | 6 | 16 | 25 | 38 | 69 | ||
| drinks per week (@ 2.5 units per drink) | 3 | 6 | 10 | 15 | 28 | ||
| excess over light drinkers | 0 | 4 | 8 | 13 | 25 | ||
| minutes lost per year | -19500 | 0 | -5850 | -11700 | -19500 | -39000 | |
| months lost over 30 years | -13.5 | 0.0 | -4.1 | -8.1 | -13.5 | -27.1 | |
| Years lost compared to light drinkers | -1.1 | 0.0 | -0.3 | -0.7 | -1.1 | -2.3 | |
| Predicted mean age of death | 86.4 | 87.5 | 87.2 | 86.8 | 86.4 | 85.2 | 87.0 |
| Years lost compared to average (mean) | -0.6 | 0.5 | 0.2 | -0.2 | -0.6 | -1.7 | |
| non-drinkers given same excess as regular drinkers as all-cause mortality rates are virtually identical | |||||||
So the light drinkers get an extra six months over the average, whilst some moderate drinkers lose a couple of months, regular drinkers are 7-8 months off the average, and even heavy drinkers are under two years below average. Obviously if damage has already been done by prior excess consumption, then that will affect mortality going forward - but most folk looking at this study will probably shrug their shoulders about past indiscretions, saying "what's done is done"
Like many of my friends I am in my late 50s. If our likely life expectancy is another 30 years or so, then the light and moderate drinkers in the group appear fine, and even for the regular drinkers, if every night spent drinking half a bottle of wine lops 7 months or so off the average life expectancy compared to our cohort, I suspect many people would think that’s a trade off worth making.
Monday, 14 August 2017
Tesla
Long time no blog from me - but I have been busy doing stuff.
However, I felt I should blog after my weekend's experience driving a Tesla model S.
As those who know me can confirm, I am no petrol head (or car aficionado at all really) - my main desire in any vehicle is legroom and a bit of comfort. The car I drove for the last dozen years or so of my corporate life was a Lexus 4x4 hybrid. Very comfortable, and moderately green! But expensive. As a private citizen, with no company car allowance, I now drive the old family Mitsubishi 4x4 diesel - not so green!
But I am interested in electric cars - mainly as a sceptic on whether they really can reduce CO2 emissions over their lifetime, and whether they can ever become affordable. Connected to this of course is a fascination with whether we will ever get driverless cars - but that's for another blog.
Anyway - when the government announced in would ban the sale of internal combustion engined cars from 2040, there was a flurry of articles which were referenced in social media - I read many of them, reposted a few, and made the odd comment. This prompted my good friend Mark Goodier to ask if I'd ever driven a Tesla. No I had not, I said, so he arranged for a test drive for me, which duly took place the weekend just gone.
So what did a sceptic like me make of Elon Musk's very expensive baby.
Well, first of all I must thank the Tesla team in Birmingham - delightful folk, very helpful, and not at all pushy salesmen. And they probably don't need to be - I suspect for folks with deep enough pockets, and a passion for environmental causes, the Tesla sells itself.
Jean and I picked it up on Saturday morning - a quick spin with Sharon from Tesla to show us the ropes and we were off - to Hopwood Services on the M42 where we needed to recharge it!! I suppose if we'd had a petrol car we wouldn't have thought twice about filling up - but with only 50 miles left on the dashboard of the Tesla, range anxiety (i.e. worrying it is going to die on you like your phone does) was uppermost in my mind. 30 minutes for coffee and a loo break and we had 225 miles on the battery. Off to Malvern we went, for a very nice lunch at the Inn at Welland - highly recommended.
A word about the Tesla charging units at the services - there must have been about 15 of them. No other Tesla's were there - so panic over having to queue for your 30 minute supercharge was misplaced. and plugging in and charging was easy. But...it did take 30 minutes - and I suspect if you were in a rush somewhere you might curse that time delay. These cars will certainly need you to adopt a more "planning ahead" mindset. The chaps at Tesla suggest a full 300 mile charge will typically cost you around £12-£15 at home and take 7 hours - rather less expensive than a tankful of petrol - but a lot longer.
And the car itself. The series S is the upmarket sporty version - designed to match the smarter BMW's and Mercedes. To my eyes it looks a little bland - quite American in feel - not European. But really that is relatively low on my list of attributes, and it certainly caught some looks around Worcestershire & Warwickshire over the weekend.
It's a sports car though - so a little too close to the ground for my liking. Tesla do a 4x4, the series X, and in hindsight I may have preferred a test drive in that model.
The interior is cool, uncluttered, and very easy to grasp. The big central console display is the main feature - and it highlights a big googlemap display, along with plenty of space for onboard entertainment controls, or air conditioning displays etc. Very nice for a gadget freak like me - but I'm not sure it wasn't a little too distracting at times. And I also thought that there wasn't anything stopping any other manufacturer installing something similar - a big screen display is certainly not something that needs to be confined to electric cars.
The electric engine means it is incredibly quiet - although I was used to that at low speeds from my time driving the Lexus Hybrid. What is more impressive is how quiet it is at high speeds. for some (petrol heads) of course, that is a downside, as they like the noise of the engine - but I preferred it.
It has a feature called autopilot, which controls speed, distance from the car in front, and as long as you are between white lines (ie. a roads and motorways) will keep you centred, so you can take your hands off the wheel. I suspect we weren't paying full attention when Sharon was showing us this feature, as whenever I momentarily took my hands off the wheel the car felt like it would easily drift out of lane - so I didn't do it again!
The internal entertainment options were great - good connectivity to your phone for spotify etc, and pretty good FM/DAB - although the DAB wasn't perfect, with no meta data on display. It has a built in 3G/4G connection, so you are never "unconnected" - unless you are in the wilds of Worcestershire!
The defining difference with the Tesla is though, as some of you may have heard, its acceleration. Put simply, it goes like the proverbial s**t off a shovel (in case you were wondering where this phrase comes from, I'm grateful for this definition from the Urban Dictionary folk - in the days when trains had a driver and a fireman to load coal and it was necessary to answer a call of nature you would s**t on the coal shovel and then throw it in the fire as quickly as possible because of smell and hygiene. As the shovel had coal dust on it, the s**t did not stick!)
I have never experienced acceleration quite like it - truly breathtaking - and for a bit of a safety-first conservative like me, actually quite frightening. What an engine it has.
Now, the acceleration, and the quietness, were really the only two driving plus points, with the charging time being the only serious downside - so in the end, forgetting any "saving the planet" considerations, I'm not convinced I'd spend £60k on a Tesla. TBH I'm not certain I'd ever spend £60k on any car - but if I did I suspect the competition at the top end between JLR, Mercedes, BMW etc would mean I could buy an internal combustion engined car with many more conventional bells and whistles. However, if I wanted to save the world - and signal both virtue and wealth - the Tesla would probably tick my boxes.
Our new house in Leamington will have some off-street parking at the rear, so I could recharge at night. But for many neighbours who don't have that, and generally for city dwellers, the lack of obvious charging points for these cars means they will remain a small part of the industry for some time.
I'm sure both charging infrastructure will need to be built out, and prices will need to fall dramatically, especially for the smaller, urban vehicles, before people will adopt them in large numbers.
The bigger Tesla type cars will remain a very niche product though, until their prices too begin to match their larger counterparts.
But did I enjoy driving it - hell yes. That acceleration is a stomach-churning thrill most of us get all too rarely in our lives - and something that tends to stick in the mind for a long time afterwards.
However, I felt I should blog after my weekend's experience driving a Tesla model S.
As those who know me can confirm, I am no petrol head (or car aficionado at all really) - my main desire in any vehicle is legroom and a bit of comfort. The car I drove for the last dozen years or so of my corporate life was a Lexus 4x4 hybrid. Very comfortable, and moderately green! But expensive. As a private citizen, with no company car allowance, I now drive the old family Mitsubishi 4x4 diesel - not so green!
But I am interested in electric cars - mainly as a sceptic on whether they really can reduce CO2 emissions over their lifetime, and whether they can ever become affordable. Connected to this of course is a fascination with whether we will ever get driverless cars - but that's for another blog.
Anyway - when the government announced in would ban the sale of internal combustion engined cars from 2040, there was a flurry of articles which were referenced in social media - I read many of them, reposted a few, and made the odd comment. This prompted my good friend Mark Goodier to ask if I'd ever driven a Tesla. No I had not, I said, so he arranged for a test drive for me, which duly took place the weekend just gone.
So what did a sceptic like me make of Elon Musk's very expensive baby.
Well, first of all I must thank the Tesla team in Birmingham - delightful folk, very helpful, and not at all pushy salesmen. And they probably don't need to be - I suspect for folks with deep enough pockets, and a passion for environmental causes, the Tesla sells itself.
Jean and I picked it up on Saturday morning - a quick spin with Sharon from Tesla to show us the ropes and we were off - to Hopwood Services on the M42 where we needed to recharge it!! I suppose if we'd had a petrol car we wouldn't have thought twice about filling up - but with only 50 miles left on the dashboard of the Tesla, range anxiety (i.e. worrying it is going to die on you like your phone does) was uppermost in my mind. 30 minutes for coffee and a loo break and we had 225 miles on the battery. Off to Malvern we went, for a very nice lunch at the Inn at Welland - highly recommended.
A word about the Tesla charging units at the services - there must have been about 15 of them. No other Tesla's were there - so panic over having to queue for your 30 minute supercharge was misplaced. and plugging in and charging was easy. But...it did take 30 minutes - and I suspect if you were in a rush somewhere you might curse that time delay. These cars will certainly need you to adopt a more "planning ahead" mindset. The chaps at Tesla suggest a full 300 mile charge will typically cost you around £12-£15 at home and take 7 hours - rather less expensive than a tankful of petrol - but a lot longer.
And the car itself. The series S is the upmarket sporty version - designed to match the smarter BMW's and Mercedes. To my eyes it looks a little bland - quite American in feel - not European. But really that is relatively low on my list of attributes, and it certainly caught some looks around Worcestershire & Warwickshire over the weekend.
It's a sports car though - so a little too close to the ground for my liking. Tesla do a 4x4, the series X, and in hindsight I may have preferred a test drive in that model.
The interior is cool, uncluttered, and very easy to grasp. The big central console display is the main feature - and it highlights a big googlemap display, along with plenty of space for onboard entertainment controls, or air conditioning displays etc. Very nice for a gadget freak like me - but I'm not sure it wasn't a little too distracting at times. And I also thought that there wasn't anything stopping any other manufacturer installing something similar - a big screen display is certainly not something that needs to be confined to electric cars.
The electric engine means it is incredibly quiet - although I was used to that at low speeds from my time driving the Lexus Hybrid. What is more impressive is how quiet it is at high speeds. for some (petrol heads) of course, that is a downside, as they like the noise of the engine - but I preferred it.
It has a feature called autopilot, which controls speed, distance from the car in front, and as long as you are between white lines (ie. a roads and motorways) will keep you centred, so you can take your hands off the wheel. I suspect we weren't paying full attention when Sharon was showing us this feature, as whenever I momentarily took my hands off the wheel the car felt like it would easily drift out of lane - so I didn't do it again!
The internal entertainment options were great - good connectivity to your phone for spotify etc, and pretty good FM/DAB - although the DAB wasn't perfect, with no meta data on display. It has a built in 3G/4G connection, so you are never "unconnected" - unless you are in the wilds of Worcestershire!
The defining difference with the Tesla is though, as some of you may have heard, its acceleration. Put simply, it goes like the proverbial s**t off a shovel (in case you were wondering where this phrase comes from, I'm grateful for this definition from the Urban Dictionary folk - in the days when trains had a driver and a fireman to load coal and it was necessary to answer a call of nature you would s**t on the coal shovel and then throw it in the fire as quickly as possible because of smell and hygiene. As the shovel had coal dust on it, the s**t did not stick!)
I have never experienced acceleration quite like it - truly breathtaking - and for a bit of a safety-first conservative like me, actually quite frightening. What an engine it has.
Now, the acceleration, and the quietness, were really the only two driving plus points, with the charging time being the only serious downside - so in the end, forgetting any "saving the planet" considerations, I'm not convinced I'd spend £60k on a Tesla. TBH I'm not certain I'd ever spend £60k on any car - but if I did I suspect the competition at the top end between JLR, Mercedes, BMW etc would mean I could buy an internal combustion engined car with many more conventional bells and whistles. However, if I wanted to save the world - and signal both virtue and wealth - the Tesla would probably tick my boxes.
Our new house in Leamington will have some off-street parking at the rear, so I could recharge at night. But for many neighbours who don't have that, and generally for city dwellers, the lack of obvious charging points for these cars means they will remain a small part of the industry for some time.
I'm sure both charging infrastructure will need to be built out, and prices will need to fall dramatically, especially for the smaller, urban vehicles, before people will adopt them in large numbers.
The bigger Tesla type cars will remain a very niche product though, until their prices too begin to match their larger counterparts.
But did I enjoy driving it - hell yes. That acceleration is a stomach-churning thrill most of us get all too rarely in our lives - and something that tends to stick in the mind for a long time afterwards.
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