Select Committee on Culture, Media and Sport Minutes of Evidence

Memorandum submitted by GWR Group plc & Emap Performance Network

  Radio in the UK is thriving—as other media suffer from the increasing demands on consumers' time, radio's quality of parallel consumption has seen listening increase (by 8.8 per cent in the last two years) as people tune in whilst surfing the web, driving or working.

  GWR Group and Emap Performance are two of the largest commercial radio groups, employing 2,000 people between them. GWR owns Classic FM, the national digital stations Core and Planet Rock, and 37 local radio stations. GWR is the majority shareholder in Digital One, the national digital radio multiplex, and owns three local multiplexes. Emap Performance owns the Big City, Magic and Kiss radio networks, and 10 digital local radio multiplexes. It also owns music television channels including The Box, and music magazines including Smash Hits, Q and Mojo.

  The Communications White Paper contains much that is good for radio, although the interests of television and telephony are given much more prominence. 90 per cent of the population use radio for an average of 23 hours a week each, and every household owns six radio sets. Radio is a significant engine of the economy: it employs 22,819 people, compared to TV with 24,102 employees. Radio is the most pervasive and universal medium and deserves a level of consideration commensurate with its use. The UK radio industry needs three things from new legislation:

    —  The relaxation of ownership controls to allow listeners to benefit from ownership convergence. The breadth of listener choice embodied in the BBC's five national services, or in the 10 services on a digital radio multiplex, demonstrate that owners with a range of services to offer will position them for minimum overlap and maximum choice. The industry and its regulator, the Radio Authority, have proposed that competition law alone should be used to regulate national radio ownership, and the Communications Act should incorporate this.

    —  A consistent approach to content regulation. Currently independent radio services run to tight "formats" imposed by the Radio Authority, whilst BBC services are approved—on much looser definitions—by the Secretary of State. OFCOM should provide independent regulation of both commercial and BBC content, to ensure that services do not overlap and that the best range of services is provided. OFCOM sprang from a desire for consistency across the converged communication industries: it must also provide consistency between the BBC and commercial sectors.

    —  Support for digital radio through licence renewals and a switchover plan. The White Paper proposes extending analogue licence periods to equate with those for digital licences and offers the prospect of OFCOM negotiating with current providers for "renewal of a licence if it is justified by their level of performance". Investment in digital radio is supported by income from analogue licences, as digital radio has a long payback period. The extension of analogue licences, and their negotiated renewal, are vital factors underpinning digital investment and must be incorporated in the Act. Government should also define its criteria for digital radio switchover, as has been done for digital TV. This would provide a valuable target for the industry, and provide the certainty that is needed to encourage manufacturers and retailers in the growing digital radio consumer market.

  The White Paper will shape the communications industry in its most significant growth stage—digital convergence. For consumers to benefit from the opportunities of digital development, regulation must be flexible, consistent, responsive to market changes, and light touch.

  We commend the Committee for holding this inquiry and look forward to the Report.

February 2001

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Prepared 23 February 2001