Memorandum submitted by RadioCentre
BACKGROUND
1. The RadioCentre formed in July 2006 from
the merger of the Radio Advertising Bureau (RAB) and the Commercial
Radio Companies Association (CRCA). Its members consist of the
overwhelming majority of UK Commercial Radio stations, who fund
the organisation.
2. The role of the RadioCentre is to maintain
and build a strong and successful Commercial Radio industry—in
terms of both listening hours and revenues. As such, the RadioCentre
operates in a number of areas including working with advertisers
and their agencies, representing Commercial Radio companies to
Government, Ofcom, copyright societies and other organisations
concerned with radio, and working with stations themselves. The
RadioCentre also provides a forum for industry discussion, is
a source of advice to members on all aspects of radio, jointly
owns Radio Joint Audience Research Ltd (RAJAR) with the BBC, and
includes copy clearance services for the industry through the
Radio Advertising Clearance Centre (RACC).
EXECUTIVE SUMMARY
3. At a time when consumers are accessing
content in new ways, RadioCentre is pleased that the Committee
is using this inquiry to maintain a relevant multi-media view
of public service broadcasting.
4. The RadioCentre's members have a rich
diversity of PSB content and a strong commitment to the public
purposes for radio as identified by Ofcom.
5. Indeed Commercial Radio is producing
more public service content in key areas such as news than ever
before, with new platforms and portable devices also improving
the impact and reach of this material.
6. Young people are amongst those to have
benefited from Commercial Radio's continued investment and risk
taking. The recent development of specific children's radio services
is entirely a private sector innovation.
7. Commercial Radio has played a valuable
and overlooked role in maintaining plurality in the delivery of
public policy objectives. However, the radio industry is facing
a growing number of threats to the continuation of that delivery.
These include:
— lack of regulatory parity across
new media;
— undesirable plurality as a result
of illegal broadcasting; and
— an over powerful and inappropriately
focused BBC.
8. In addition, we would note that the relatively
onerous obligations imposed on Commercial Radio in terms of ownership
plurality continue to hamper the industry's ability to compete
effectively.
9. The introduction of Administered Incentive
Pricing would constitute a burdensome double bind at this time
of heightened pressure on our industry.
10. Commercial Radio's favourable access
to spectrum has always been justified by its role in fulfilling
public policy objectives. The RadioCentre is asking Ofcom to reconsider
its approach to Administrative Incentive Pricing (AIP) for terrestrial
broadcasters, in recognition of the public value the Commercial
Radio industry provides.
11. Within a regime which continues to provide
access to spectrum in exchange for such licence commitments, we
are content that they should remain. However, we have always been
opposed to regulatory or legislative intervention which seeks
to stipulate the manner in which these commitments should be fulfilled.
12. Before considering whether other broadcasters
should receive public funding, it is important to consider the
impact of the publicly funded BBC on commercial services. We believe
that the best option, at least in the short term, for securing
the future of a pluralistic PSB economy depends on maintaining
reasonable restraints on the existing publicly funded intervention,
the BBC, whilst freeing the commercial sector to enable it to
compete effectively.
13. Having said this, if future market conditions
threaten the viability of PSB on Commercial Radio, we remain open
to the possibility of public funding on non-BBC stations. If this
is to be achieved through a Public Service Publisher, it must
be delivered on a truly multi-platform basis.
14. We believe the ideas set out in the
submission by our member company, GCap Media, represent useful
and creative early ideas as to how PSB in the private sector could
be supported more formally.
INTRODUCTION
15. The debate about public service broadcasting
in the UK is typically considered through the lens of television.
At a time when consumers are accessing content in new ways, RadioCentre
is pleased that the Committee is using this inquiry to maintain
a relevant multi-media view of public service broadcasting.
16. In answering the Committee's questions
we have concentrated on radio content in all its forms, but have
attempted to do so within a broader media context. Where questions
related specifically to television, we have declined to answer.
17. Commercial Radio is, in legislative
terms at least, not described as a public service broadcaster,
yet each of its almost 300 stations have individual PSB obligations
written into their licences. We set out in this submission some
of the PSB contributions made by our industry, many of which go
well beyond the minimum criteria required by the regulator. It
is our contention, therefore, that Commercial Radio is a public
service broadcaster and merits the attention of legislators and
regulators to ensure it can continue to be so.
THE PROSPECTS
FOR MAINTAINING
PLURALITY IN
PUBLIC SERVICE
BROADCASTING IN
THE DIGITAL
AGE
What does PSB mean for radio?
18. Ofcom Chief Executive Ed Richards recently
described "Public Service Broadcasting" as a "euphemism",
whose meaning has "changed over time"[6].
In this answer we define it as the delivery of audio and visual
content with the objective of social gain. Commercial Radio has
a rich diversity of PSB content and a strong commitment to the
public purposes for radio as identified by Ofcom.
19. In its Radio Review, Ofcom said: "The
Green Paper on the future of the BBC set out a range of public
purposes for the BBC, across all of its services. The purposes
and characteristics our research has identified can be mapped
onto these public purposes to derive a set of public purposes
for radio as a whole. Together with the requirements on community
radio to provide social gain, we believe these provide a comprehensive
set of public purposes for which intervention may be required:
— Sustaining citizenship and civil
society.
— Promoting education and learning.
— Stimulating creativity and cultural
excellence.
— Representing the UK, its nations,
regions and communities.
— Bringing the UK to the world and
the world to the UK.
The emphasis within each of these general public
purposes for radio will be different from other media and different
elements of each public purpose will be met by different radio
sectors—BBC, commercial, community. [7]"
20. Commercial Radio agrees with these purposes
and believes it will continue to meet all of them, to varying
extents, into the future, provided that the right economic and
competitive environment can be maintained. Any new public service
broadcasting strategy will fail if it is fashioned with the tools
of a bygone era. Listeners crave portability, accessibility and
interactivity from their media, but all the evidence suggests
that they continue to value content that serves clear public service
objectives.
Commercial Radio's PSB delivery
21. The story of Commercial Radio in the
UK demonstrates that making money for shareholders is entirely
compatible with fostering community spirit and public value. As
a direct result of government policy there are now more than 300
Commercial Radio stations owned by a plurality of operators and
providing social gain by serving local audiences. Our stations
have established vibrant cultures that inform and are informed
by their communities. Yet Government policy notwithstanding, this
localness has also, for over 30 years, been the basis for a sound
commercial proposition. However, in a changing world, Commercial
Radio, like other media must adapt. That does not mean that localness,
community and public value will cease to be important, but their
position within the overall media mix, and in particular the manner
of their delivery must be looked at afresh.
22. The RadioCentre regularly conducts audits
of public service broadcasting on Commercial Radio. The most recent,
in 2004 revealed that:
— The news broadcast by Commercial
Radio equates to the output of more than 13 24-hour news services
and around half of all news provided by Commercial Radio is local
news.
— Commercial Radio's information services
include over two million weather forecasts a year and almost 1.4
million minutes of travel news.
— Commercial Radio promotes almost
half a million local events on air every year, and a further 300,000
on station websites.
— Stations broadcast community reports
on average 38 times a week and lend their physical support to
over 44,000 community events and initiatives every year[8].
23. In order to respond to the Green Paper
on BBC Charter Renewal in 2005, CRCA commissioned Hallett Arendt
to compare the speech content on Radios 1 and 2 with the commercial
stations Lincs FM and Liverpool's City Radio. The project analysed
and categorised the speech output according to whether it met
the new public purposes for the BBC as set out in the Green Paper.
24. Of the four stations monitored by Hallett
Arendt, Radio 2 had the greatest proportion of public purpose
speech during daytime (59%) followed by Lincs FM (51%), Radio
City (36%) and Radio 1 (29%). The high public purpose content
of the Jeremy Vine programme is the main reason for this.
Table 1
SPEECH ANALYSIS COMPARISON—WEEKDAY
0600-1900
| % of speech contributing to each public purpose
| | | |
| Radio 1 | Radio 2
| Lincs | City
|
| Sustaining citizenship & civil society |
24% | 45% | 47%
| 30% |
| Promoting education & learning | 2%
| 10% | 2% | 2%
|
| Stimulating creativity & cultural excellence
| 0% | 0% | 0%
| 0% |
| Representing the UK, its Nations, regions & communities
| 0% | 0% | 0%
| 0% |
| Bringing the UK to the world & the world to the UK
| 3% | 4% | 2%
| 4% |
| Building digital Britain | 0%
| 0% | 0% | 0%
|
| Total public purpose contribution | 29%
| 59% | 51% | 36%
|
| No public purpose contribution ... | 71%
| 41% | 49% | 64%
|
| ... of which, station self-promotion | 15%
| 2% | 1% | 0%
|
| | |
| |
25. Within this, there were also interesting findings
within key listening periods. Lincs FM showed the highest proportion
of public purpose speech output at breakfast (53%), followed by
Radio City (35%), Radio 2 (29%) and Radio 1 (20%). The local news
and information provided by the commercial stations were contrasted
with the entertainment-driven output of the BBC services at breakfast.
At drivetime, Radio 2 offered the highest proportion of public
purpose speech (82%). Both Radio City (63%) and Lincs FM (62%)
delivered considerably more public purpose output than Radio 1's
drivetime show (49%) despite the inclusion of Newsbeat's extended
Election Special within the Radio 1 drivetime show on the day
monitored.
26. Commercial Radio's impressive performance in relation
to the BBC's publicly funded services came as no surprise to those
familiar with the traditions of public service broadcasting on
the stations represented by the RadioCentre. Our members play
key roles in local life, broadcasting community reports on average
38 times a week[9]. Recently,
West FM, West Sound and South West Sound FM galvanised the local
support necessary to secure an upgrade to the A77 between Glasgow
and Stranraer. Commercial stations also regularly broadcast fire
warnings or anti-crime messages, such as those broadcast by kmfm
in association with Kent Police during high tourist seasons along
the coast. 2006 witnessed the return of Saga 106.6's annual Christmas
campaign to encourage older listeners to support Rainbows, the
East Midlands Children's Hospice based in Loughborough. In Summer
2006 Classic FM and the Music Industries Association teamed up
to launch Get Alive!, a national campaign to encourage the British
public of the benefits of playing musical instruments.
27. Hallett Arendt's research demonstrates that Radios
1 and 2 rely on news bulletins to deliver public purpose speech
radio. However, this is another area in which Commercial Radio
excels:
— Of the 218 stations who submitted data to CRCA's
2004 audit of public service broadcasting, 148 (68%) broadcast
more news output than Radio 1 promises in its annual Statement
of Programme Policy. [10]
— Radio 2's Statement of Programme Policy promises
800 hours of news and current affairs a year, of which 520 hours
is accounted for by Jeremy Vine's programme. This leaves a commitment
to 323 minutes week of news, a figure bettered by 163 (75%) of
the 218 stations that participated in Commercial Radio's audit.
The threats to the continuing provision of PSB on Commercial Radio
28. There is compelling evidence that public policy objectives
are continuing to be met despite the downturn in advertising revenues.
Despite the funding advantages enjoyed by BBC Radio, commercial
broadcasters have played a key role in maintaining plurality in
the delivery of public service broadcasting. However, the radio
industry is facing a growing number of threats to the continuation
of that delivery. These include:
— lack of regulatory parity across new media;
— undesirable plurality as a result of illegal broadcasting;
and
— an over powerful and inappropriately focused BBC.
Each of these constitutes a direct threat to Commercial Radio
audiences and revenue. They also come at a time when we are threatened
with increases to our cost base in the shape of spectrum pricing
(see our response to Question 4).
29. The Internet has led a boom in the availability of
free audio. It is easier for amateur programme makers to achieve
a "professional" standard when producing podcasts or
audio webstreams than it is when creating video content. On-line
distribution costs are also much lower than for analogue and particularly
digital radio stations. This has led to the emergence of a host
of competitors for traditional radio stations, as companies and
individuals with no background in audio delivery make use of the
opportunities offered by technological change. Obviously this
has produced a number of consumer benefits, but it also means
that resources, audiences and advertising budgets are spread more
thinly. The challenge for Commercial Radio is that, while its
services are heavily regulated in terms of their output and production,
these new on-line audio services are entirely unregulated. This
regulatory disparity inevitably creates a competitive disparity
in terms of production costs.
30. A second threat is that of undesirable plurality.
The illegal activity of pirate broadcasters is increasing, counteracting
the public value generated by Commercial Radio. A particularly
worrying issue for supporters of public service broadcasting is
that valuable speech stations—such as London's LBC—find
that their music-free output is less able to compete with illegal
"noise" from pirate stations.
31. Aside from the detriment to legitimate stations,
unlicensed broadcasting has other social implications. As The
Times reported in a rare instance of media attention in November
2005, "previous raids [on pirate radio stations] have found
drugs, guns and ammunition among the piles of CDs". Pirate
radio equipment—much of which is stolen—is often installed
in ways that do severe damage to local council property, and can
jeopardise the safety of lifts in council estates, or block ventilation,
thereby endangering lives. Pirate radio also feels no prohibition
on playing music that glamorises gang violence and drug culture.
The Birmingham Lozells riots in October 2005 are often attributed
to pirate radio, which incited racial tensions by spreading false
rumours of a black woman having been raped by Asian men.
32. RadioCentre is also concerned that plurality of PSB
provision could suffer unless the BBC Trust undertake significant
work to ensure that the actuality of BBC service delivery is in
line with the BBC's public purpose obligations. Whilst the introduction
of Service Licences for BBC services might initially appear to
offer some comfort, these licences will, in the first instance,
simply capture the nature of BBC services as currently provided.
There will then be further significant work to be done if the
BBC Trust decides to require those services to be updated in order
properly to fulfil the public purposes set out for the BBC in
the new Charter and Agreement.
33. Our concerns are best explained by the evidence set
out below, some of which was first submitted as part of CRCA's[11]
response to the Green Paper on BBC Charter Renewal in May 2005.
CRCA conducted research into the way in which increased centre-ground
clustering has characterised recent changes to BBC radio output,
particularly during peak daytime listening hours. We gained the
clear impression that BBC radio is intent on building audience
share through popular and contemporary programming targeted at
an increasingly young audience.
34. We discovered that Radio 2's refocus had dramatically
increased its appeal to younger listeners: between 1999 and 2005,
Radio 2's share of listening amongst 25-34s more than doubled,
its share among 35-44s grew by 70% and its share among 45-54s
by 33%. In contrast, its share among 55 to 64s grew by just 4%
and its share of 65+ listening fell. [12]
35. All of BBC Radio's popular music stations now play
considerable amounts of current music, leaving nostalgia or gold-based
formats to the commercial sector. 35% of Radio 2's songs are from
the past five years and 48% from the past 15 years. [13]95%
of Radio 1's daytime music is from the past five years[14]
whilst "new" music[15]
alone accounts for 70% of 1Xtra's tracks. [16]BBC
6 Music, having been initially charged with playing music from
the 1970's to the 1990's, was by 2005 playing 45% of its music
from the last four years. [17]
36. There is no lack of audience choice in the 15-44
demographic which advertisers want to reach, yet the above data
strongly points to a BBC which is intent on increasing its appeal
to this group. As Tim Gardam noted in his review of the BBC's
digital radio services, "[t]he Radio 2 experience shows how
effective the BBC can be when it focuses its mind—and its
unparalleled resources—on increasing audience share."
[18]
37. There is also evidence that BBC Local Radio is pursuing
younger audiences. The recently published draft service licence
for local radio states its target audience as over 50, not the
over 55 which was long understood to be its target. Focusing "younger"
in this way would be understandable if the population was becoming
more youthful, but the reverse is true.
38. Despite the stated intention of targeting the over
50s, BBC Local Radio does continue to exhibit characteristics
which suggest that the enthusiasm of staff on the ground, most
of whom are likely to be younger than the target demographic,
plough a different furrow. Mia Costello, Editor of BBC Radio Solent
was quoted in Xtrax magazine in 2005 as saying "we're now
trying to attract people aged 45+". In November 2006 a leaked
memo revealed Costello's determination to exclude "really
elderly voices" from phone-ins. [19]BBC
Local Radio's judgement of suitable programming for those over
50 might also be questioned by those familiar with the explicit
teen-style sex advice provided by Dawn Porter on BBC Radio Humberside's
Evening Show, as reported by Media Guardian in November 2006.
[20]
39. At the BBC Charter Review Seminar on Radio in October
2004, BBC radio controllers continually justified the scheduling
of competitive, populist output because it allowed listeners to
hear subsequent elements of public service broadcasting. The example
perhaps most often given is that it doesn't matter if Terry Wogan
or Chris Moyles broadcast purely entertainment programmes as the
occasional interruption of a news bulletin or "Thought for
the Day" results in their audience being exposed to important
PSB output. However, this analysis ignores three vital points:
— It allows BBC radio to do just about anything
most of the time, so long as it provides specific points of claimed
uniqueness from time to time.
— It wrongly implies that valuable content (such
as news) is not being provided on the station(s) from which the
BBC has attracted its increased audience.
— By using its cross-promotional, marketing, budgetary
and spectrum power to attract listeners from commercial stations,
the BBC undermines the role that the commercial sector plays in
maintaining plurality of high quality content.
40. We believe this evidence clearly points to a BBC
which is using its might to threaten a pluralistic PSB ecology.
We are therefore looking to the new governance structure and financial
limits created by the license fee settlement to ensure that BBC
does not compete head-on with commercial services, reducing their
public service efficacy by restricting their ability to generate
revenue.
41. Finally, we would note that the relatively onerous
obligations imposed on Commercial Radio in terms of ownership
plurality continue to hamper the industry's ability to compete
effectively. Competition between radio owners for advertising
revenue is fierce, added to which Ofcom's Annual Plan 2007-08
identifies the increase in inter-platform competition as a key
change in the communications market. [21]The
RadioCentre believes that this insight supports the removal of
sector-specific ownership restrictions. There is currently no
shortage of different operators within radio. If anything there
are too many; ownership is spread between over 70 different individuals
and companies. If Commercial Radio is to survive in the new digital
market and remain an important contributor to UK public service
broadcasting, its operators will need to consolidate further and
increase the extent to which they share resources across stations.
We commend the examples set out in GCap Media's submission to
the committee as an excellent exposition of the benefits to PSB
of shared ownership.
42. Our members can retain a key role in providing valuable
plurality in public service broadcasting in the digital age, but
we will need renewed public recognition of the value we provide
and a more appropriate regulatory and competitive framework if
our industry is to adapt to the challenges of the digital age.
THE PRACTICALITY
OF CONTINUING
TO IMPOSE
PUBLIC SERVICE
OBLIGATIONS ON
COMMERCIAL BROADCASTERS
43. Imposing public service obligations on commercial
broadcasters has always been justified by favourable access to
spectrum. Commercial Radio recognises and embraces its responsibilities
as part of this contract with the British public. However, with
the government considering a new approach to spectrum pricing,
this arrangement is under threat. In particular, Commercial Radio
is asking Ofcom to reconsider its approach to Administrative Incentive
Pricing (AIP) for terrestrial broadcasters, in recognition of
the public value we provide.
44. In its submission to Ofcom on Spectrum Pricing (supplied
to the Committee for convenience) we explain why the proposals
put forward by the regulator, with implicit Government support,
would damage Public Service Broadcasting in Commercial Radio.
45. Commercial Radio remains committed to providing local
and national news, sport, listings, travel, weather and event
content of a high standard. Research indicates that listeners
choose stations that actively engage with the life of their community;
this is what provides our stations with their incentive to act.
Within a regime which continues to provide access to spectrum
in exchange for such licence commitments, we remain content that
they should remain. However, we have always been opposed to regulatory
or legislative intervention which seeks to stipulate the manner
in which these commitments should be fulfilled. Although Ofcom
has begun to implement some relaxations in this area, the industry
has already been held back for too long through these straightjackets
of regulation (which include details of where programmes should
be made, the extent to which technology can be used to reduce
production costs and the location of newsreaders).
46. Pirate interference currently provides a disincentive
for the operation of speech radio stations, which normally have
a strong bias towards public service content. Increased resources
and powers for, and greater inter-agency co-operation, would have
practical benefits in counteracting this problem. Increased work
to drive the uptake of digital radio would also help, since the
sophistication of this newer technology excludes illegal participants.
47. Although we currently have concerns about their specificity,
RadioCentre welcomes the introduction of BBC Service Licences.
We believe that it is vital for publicly funded radio stations
to be subject to quantifiable obligations and clear definitions
to ensure that they deliver the key public purposes identified
in the Charter. This will also remove the unfair advantage that
the BBC has previously gained from its format flexibility. Evidence
that Radio 3 moved to alter its output in advance of the Service
Licences coming into effect on 1st January reveals the type of
behaviour that Commercial Radio is most concerned about. It also
gives us grounds for optimism that this kind of format flexibility
will not be available to the BBC under the new regime.
48. The BBC has a number of structural advantages: an
advert-free environment, better spectrum access, the obvious funding
privileges, cross-media cross promotional might and an ability
to invest in digital services without risk. We believe that this
imbalance should be taken into account when considering what demands
can reasonably be made of commercial broadcasters.
THE CASE
FOR PUBLIC
FUNDING OF
BROADCASTERS IN
ADDITION TO
THE BBC
49. Before considering whether other broadcasters should
receive public funding, it is important to consider the impact
of the publicly funded BBC on commercial services. The RadioCentre
is also concerned by Ofcom and Government's apparent intention
to classify access to spectrum as a removable public subsidy (as
discussed above). The public derives benefit from the provision
of both publicly funded and commercially funded radio services,
and the RadioCentre believes that attention should be focused
on securing the economic conditions in which a healthy balance
can be maintained.
50. We believe that the best option, at least in the
short term, for securing the future of a pluralistic PSB economy
depends on maintaining reasonable restraints on the existing publicly
funded intervention, the BBC, whilst freeing the commercial sector
to enable it to compete effectively with the BBC. Therefore, we
look to the BBC Trust to hold the BBC to account and are encouraged
by the initial work done by Ofcom in its Future of Radio Discussion
Document, which signals the need for significant deregulation
in Commercial Radio.
51. RadioCentre member GCap Media has also made a submission
to the Committee's Inquiry. It discusses a number of specific
mechanisms to measure eligibility for discounted spectrum access
on public value criteria, and we believe these merit further consideration.
We would, however, be concerned by any scenario in which the BBC
received a preferential 100% discount on spectrum access for its
radio services but which did not attach equal and appropriate
value to the social and cultural value generated by Commercial
Radio, particularly in light of the evidence set out in paragraphs
23 to 27 above.
52. John Grogan MP recently used an article in Media
Guardian to argue that "the real threat to diversity and
plurality in British broadcasting" is Sky's 40% of TV revenue
compared with the BBC's 23%.[22]
The BBC enjoys a much greater dominance of radio, controlling
55% of industry funding whilst GCap Media, its nearest rival,
contributes only around 15%.[23]
53. The RadioCentre believes that recipients of public
funding have a responsibility to spend it wisely. A reduced licence
fee settlement is likely to encourage the BBC to deliver increased
public value by directing attention on efficiency and prioritisation.
54. We recognise, however, that even if the commercial
sector is given the appropriate freedoms to compete effectively,
other market conditions may lead to commercially-funded PSB in
radio being under threat. Therefore, we remain open to the possibility
of future public funding of PSB on non-BBC stations.
THE FUTURE
OF KEY
AREAS OF
PUBLIC SERVICE
MEDIA CONTENT
SUCH AS
NEWS PROVISION
AND CHILDREN'S
PROGRAMMING
55. Commercial Radio is producing more public service
content in key areas than ever before. CRCA's most recent audit
of public service broadcasting revealed that commercial stations
have a growing commitment to news. In 2000 our members broadcast
5.6 million minutes of news, travel and weather information. [24]By
2004, this had grown to almost 10.4 million minutes—an increase
of around 85%.
56. Children are also benefiting from Commercial Radio's
continued innovation, investment and risk taking. It is not the
publicly funded broadcaster which has made significant investment
into children's radio, instead Commercial Radio has launched services
for young teenagers and under-10s.
57. FUN radio includes educational material, stories
and songs and is carefully balanced between energetic and quiet
content, including a lunchtime nap-hour. FUN radio also supports
the annual Make Chatter Matter event, which helps children with
their speech and language skills. Another station for children,
Capital Disney, was named "Digital terrestrial station of
the year" at the 2005 Sony Awards. Amidst recent concern
about a decline in the provision of children's television, the
value of radio for children may have been overlooked.
58. Commercial Radio notes that, if the BBC were to launch
radio versions of CBeebies or CBBC, this could do significant
damage to the industry's investment in these new stations for
children, which will naturally take some time to reach commercial
maturity.
59. New developments in children's radio are part of
a wider picture of Commercial Radio using DAB to connect to marginalised
or previously underserved audiences. Music stations such as Chill
and theJazz (which launched on Christmas Day as a sister service
to Classic FM) broaden the range of music available nationally.
Passion showcases health and environmental issues, Gaydar serves
London's gay and lesbian community and Asian Sound offers a DAB
service to Asians across East Lancashire.
60. Whilst delivering greater diversity, our stations
also bring valuable creativity and innovation to UK broadcasting.
Commercial Radio collected four out of the five "Station
of the year" awards at the 2006 Sony Awards.
61. Representation has always been an important part
of public service broadcasting. It should be no surprise to see
Commercial Radio reflecting the diversity of the UK; its localised
services have done so for many years. The RadioCentre's members
provide one of the most important means whereby communities learn
about themselves. They offer access to a diversity of services
and a range of interpretation. Together, this variety of stations
helps to sustain the democratic goals that underpin our society.
THE VALUE
OF THE
PUBLIC SERVICE
PUBLISHER CONCEPT
AS ADVANCED
BY OFCOM
62. The RadioCentre does not believe that, as a first
step, further state-funded intervention in the radio market is
the best means of delivering a pluralistic PSB economy.
63. Ofcom's original proposal retains the traditional
bias towards television in public service broadcasting. This is
particularly disappointing given that Ofcom's mandate for the
PSP to "use all communications platforms" suggests that
radio should be a key component of its strategy. [25]The
mention of "mobile platforms" is also telling. During
trials of the new BT Movio service (which uses DAB spectrum to
allow users to access live TV and digital radio on their mobile
phones) radio was more popular than visual content, perhaps because
consumers enjoyed listening on the move or whilst carrying out
other activities. [26]
64. When considering whether the PSP proposal should
be applied to radio it is important to ascertain whether there
is a consumer need for additional PSB content. Ofcom's recent
Radio Review suggests otherwise finding that:
"listeners are satisfied with the current provision of
all of the categories they feel it important for local radio to
provide. The three issues which are considered most important
to be covered by local radio (news; traffic & travel; and
weather) are also those with which listeners are most satisfied.
Community issues and local events, both considered important by
our respondents, are also among those issues with which listeners
are most satisfied." [27]
65. If introduced in radio on the terms proposed for
television by Ofcom, the PSP would represent a further distorting
state intervention in an already crowded broadcasting sector and
could undermine Commercial Radio's sustainability and ability
to maintain its own public service broadcasting content.
66. We do not reject, forever, the idea of a PSP for
radio. Rather we are concerned that its implementation could detract
attention from the efforts we think more important: creating the
best possible set of circumstances for existing media to compete
effectively and to be sufficiently commercially successful to
maintain their commitments to PSB. Thereafter, if further intervention,
such as in the shape of a Public Service Publisher, is required,
it must be delivered on a truly multi-platform basis.
THE CASE
FOR PROVISION
OF PUBLIC
SERVICE MATERIAL
ON NEW
MEDIA
67. Commercial Radio is already using new platforms and
portable devices to improve impact and reach of its public service
broadcasting content.
68. Virgin Radio uses its national status to produce
instant on-demand coverage of UK news via mp3. LBC's Premium Podcasts
have demonstrated a market for more in depth public service speech
content, one that listeners are willing to pay for: 500,000 episodes
were downloaded in the first four months that the service was
available. (The Premium Podcasts won both the Arqiva Technical
Innovation Award and the recent Radio at the Edge Innovation Award).
69. Elsewhere, DAB tuners are now fitted to devices as
diverse as Virgin Mobile's Lobster phone and a Ministry of Sound
mp3 player, making the likes of FUN radio and talkSPORT available
in high quality on the move. Classical music fans can also choose
to download monthly podcasts from Classic FM Composer in Residence
Patrick Hawes. Commercial Radio is also available through webstreams
and Digital TV, and it has the potential to be available on any
electronic device as wireless broadband becomes ubiquitous. This
growth in the quantity of material is multi-dimensional: Commercial
Radio is making more content available in more places.
70. Commercial Radio developed its commitment to new
media for business reasons as well as social and creative reasons.
Yet we do need to be realistic about what we are able to provide
in the face of rival pressures. The BBC's privileged funding position
allows it to invest in, for example, copyright deals which enable
it to provide enhanced "listen-again" functionality
and we believe the deal for the "iPlayer" has already
been struck, even in advance of the outcome of the Public Value
Test. The BBC's ability to invest in new and complementary platforms
without concern for commercial factors has arguably allowed it
gain an unhealthy share of new platform public service content
provision. Regard must be paid to the impact of the BBC's investment
in new technologies on commercial operators' abilities to take
similar risks when developing new business models.
SUMMARY
71. Our submission is dominated by our contention that
the first stages in ensuring the continuation of a plurality of
PSB providers are:
— to free commercial broadcasters from inappropriate
obligations, and the threat of a spectrum tax, to compete effectively
in a multi-platform digital age; and
— to require the BBC Trust to hold the BBC firmly
to account on behalf of the licence fee payer particularly in
respect of the delivery of its six core public purposes.
Furthermore we believe that the state has a clear responsibility
to restrict the activities of illegal operators and safeguarding
the activities of those broadcasters who make clear public value
contributions.
72. Within this, there is a clear need to avoid bias
in favour of television. Commercial broadcasters in the radio
sector are clearly suffering as a consequence of:
— The BBC's relative might in radio.
— An onerous regulatory structure with particularly
interventionist sector-specific ownership rules.
73. We do not discount future interventions in the shape
of public funding of non-BBC services, nor of the principle of
a Public Service publisher, but believe that their implementation
at this stage could distract effort from the core tasks we have
identified above.
74. Commercial Radio is ready and willing to embrace
the challenge of delivering the public service content of the
future; to be able to do so we need a political will and refreshed
understanding of our rich and valuable area of broadcasting.
January 2007
6
MediaGuardian.co.uk, "Regulator presses on with plan for
new digital operator", 21 December 2006. Back
7
Ofcom, "Radio: Preparing for the Future-Phase 2: implementing
the framework", October 2005. Back
8
CRCA, "Commercial radio: in the public service", September
2004. Back
9
CRCA, "Commercial radio: in the public service", September
2004. Back
10
Radio 1's commitment to 310 hours a year (357 minutes a week)
includes sport and current affairs whereas the commercial radio
data is for news alone. Back
11
CRCA (Commercial Radio Companies Association) was one of the bodies
which merged to form the RadioCentre. Back
12
RAJAR Q1 99 v Q1 05. Back
13
BBC, Published research from Intelligent Media for Charter Review
Seminar on radio, October 2004. Back
14
BBC, Published research from Intelligent Media for Charter Review
Seminar on radio, October 2004. Back
15
Pre-release tracks or tracks within one month of release. Back
16
Tim Gardam, "Review of BBC Digital Radio Services",
October 2004. Back
17
Tim Gardam, "Review of BBC Digital Radio Services",
October 2004. Back
18
Tim Gardam, "Review of BBC Digital Radio Services",
October 2004. Back
19
Daily Telegraph, "BBC Radio phone-in silences the
elderly", 15 November 2006. Back
20
Media Guardian, "Media Monkey's Diary", 27 November
2006. Back
21
Ofcom, Draft Annual Plan 2007-08, December 2006, p 3. Back
22
John Grogan MP, "The point of going digital", 8 January
2007. Back
23
Ofcom, "The Communications Market", August 2006. Back
24
CRCA, "Commercial Radio's Public Service Output", 2000. Back
25
Ofcom, "Ofcom review of public service television broadcasting:
Phase 3-Competition for quality", 8 February 2005, p 68. Back
26
Radio Advertising Bureau, "Multi-Platform Radio", 2006. Back
27
Ofcom, "Radio: Preparing for the Future-Phase 1: Developing
a new framework", December 2004. Back
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