Select Committee on Culture, Media and Sport Minutes of Evidence


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.

    —  Providing social gain.

  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 1Radio 2 LincsCity
Sustaining citizenship & civil society 24%45%47% 30%
Promoting education & learning2% 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 Britain0% 0%0%0%
Total public purpose contribution29% 59%51%36%
No public purpose contribution ...71% 41%49%64%
... of which, station self-promotion15% 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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