Examination of Witnesses (Questions 253
- 259)
WEDNESDAY 7 FEBRUARY 2001
MR TIM
SCHOONMAKER, MR
TREVOR DANN,
MR RALPH
BERNARD, MR
ROGER LEWIS
AND MR
QUENTIN HOWARD
Chairman: Gentlemen, we welcome you here
today. This is proving to be a particularly interesting inquiry
we are conducting. Mr Fearn.
Mr Fearn
253. Do you think that an increased BBC presence
on digital radio will provide a significant incentive for increased
take-up of digital radio?
(Mr Bernard) That is a question which
is a very simple one to answer. Yes. There is no doubt that BBC
presence in the digital radio arena has been somewhat lacking
of late. They have made a renewed commitment to digital radio
which we in the commercial sector welcome because only a united
approach from both sides of the industry will encourage manufacturers
to think that there is a market for digital radio production in
this country and that would allow the opportunity for mass marketing
of receivers and the costs ultimately to reduce.
254. Are the BBC doing that, do you feel?
(Mr Bernard) Are the BBC committing to digital radio?
255. Yes.
(Mr Bernard) They are committing up to a point. My
understanding is that they are prepared to publicise their involvement
in digital radio once the cost of sets reduces to around £150.
256. GWR and Emap both support the relaxation
of ownership controls on radio. Can you elaborate a bit more on
this? This was in your submissions.
(Mr Bernard) The ownership controls in radio have
always been somewhat restrictive—and I speak from the GWR
perspective, having reached the ownership ceiling quite some time
ago and having gone through ever more interesting gymnastics to
remain within the ownership rules during a time when the industry
has increased dramatically in terms of the number of radio services
available and in the popularity of commercial radio as well. The
ownership limits are inadequate at present to allow those companies
like my own, who are dedicated to the radio industry, to invest
in the future as we have done in the past. In the past the future
of radio has been fairly close to hand; it is now clear that with
digital radio there is an ever widening vista of opportunity and
that requires long-term investment which radio companies would
be prepared to make if they can see a reasonable return from their
long-term investment—and I might say that by long-term we
are talking 10 years or more.
(Mr Schoonmaker) In the last 10 years the radio industry
has grown incredibly quickly: lots more listeners, lots more radio
services, lots more advertisers using it. Progressive regulation
is like oxygen for us. The changes over the last 10 years have
been enabled by more progressive regulation, via vis-a"-vis
ownership, format, and also separating television and radio into
separate regulators. We are ready for the next step now. We have
not seen a revolution in regulation over the last 10 years; we
have seen gradual changes. We can see our industry continuing
to grow. We are concerned more effectively with press and television.
We are competing with these issues again, of more progressive
ownership regulation again, not putting us back into an IBA kind
of regulator and keeping radio separate from television. I think
also this is the time to look at putting all regulation and broadcasting
into one place, which includes the BBC.
257. The ownership control at the moment is
on a points system. Should that be retained?
(Mr Schoonmaker) The points system, I guess, was designed
for a time when RAJAR (Radio Joint Audience Research)—which
is our current gold standard of audience measurement—was
just in its infancy. The points system said: "We will just
measure the coverage area of the transmission area and we will
say, `Well, if you have covered this much territory then you can
have a certain number of points'," regardless of how large
your service was or how small. The game has moved on fantastically
since then. There is a lot more radio. Also RAJAR is very robust
and accepted by everyone as a very accurate measurement of audience.
So we think, once again, it is time to move on to something that
is more progressive—and the points system ain't it.
Mr Maxton
258. What does digital radio allow you to do?
What are the big differences for the people who are listening
to your stations?
(Mr Howard) There are a number of differences and
they are progressing. The immediate ones are: much more choice
of radio stations; much better quality (no interference, no fluttering,
and a vast increase in quality for people listening on AM who
transfer to digital). Those are the two immediate benefits. The
benefits that are coming when technology advances a little further
will be: to allow radio to play its part in interactive delivery
of multimedia content (which would allow people using the radio
to be able to use it in some cases rather like an Internet browser,
for looking at more information); electronic programme guides
to guide the way through their listening during the day; the ability
to be able to record radio programmes on to their radio and listen
to them later (so whenever you want to listen to the Archers or
the news it is always in your radio). That transforms radio from
being a medium which is very good and very personal with its listeners
to something which is much richer and allows the radio industry
to play its part along with other multimedia, the Internet, mobile
telephony and television.
259. Could I ask about choice of radio stations.
What exactly would you have in mind in terms of these stations?
What sort of content, for example. People like the quality, but
it is what is on them that matters.
(Mr Howard) They are here now. I mean, in London there
are 40 digital radio stations; that is almost twice as many as
the analogue stations. So you get your favourite analogue stations:
Capital Radio, Kiss, Classic FM, Talk Radio; you also get new
stations which are providing new formats of music. There are stations
like Prime Time, which targets listeners over 50 who have been
disenfranchised by the BBC because Radio 2 does not serve them
any more by and large. You get new stations like One Word, where
the commercial sector is doing something which perhaps five years
ago it would never have been expected to do, providing an 18-hour
service a day of plays, books and comedies and the best of English
Literature. Again, the BBC is not doing that, commercial radio
is. Those types of new channels—new types of music, speech
formats, news, 24-hour news stations—are all the kinds of
format which we can enable with digital radio.
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