'Response By UKRD Group Limited To United Kingdom Government Department For Culture Media & Sport Communications Review: Radio' by Grant Goddard

RESPONSE BY UKRD GROUP
LIMITED TO UNITED KINGDOM
GOVERNMENT DEPARTMENT FOR
CULTURE MEDIA & SPORT
COMMUNICATIONS REVIEW:
RADIO
GRANT GODDARD
September 2012

A COMMUNICATIONS REVIEW FOR THE DIGITAL
AGE
The DCMS review of the regulatory regime for the UK communications sector,
launched in May 2011, identified three key themes it wished to explore:
 Growth, innovation and deregulation
 A communications infrastructure that provides the foundations of growth
 Creating the right environment for the content industry to thrive.1
For the UK commercial radio sector, DCMS identified these key issues:
 How further growth of the sector can be secured
 The extent to which there may be barriers to growth
 Whether there is scope to remove unnecessary or outmoded regulation.2
STATEMENT
The business model of local commercial radio is not broken. Across the UK,
there are dozens of genuinely local commercial radio stations, including our
own, successfully producing locally made content for their audiences and
generating revenues predominantly from local advertisers. Recent closures
and re-directing of local newspapers have only expanded the opportunities for
local commercial radio businesses in many markets.
Strategic errors of judgement made by commercial radio operators over
recent years have impacted upon the viability of their businesses. Many
owners have weakened the bonds between their local stations and the
communities they serve. It is the nature of commercial business that, where
owners have made uninformed or ill-considered strategic decisions, those
mistakes have to be confronted or the owners risk failure.
The Government should not be considering a 'bailout' of such owners by
amending legislation to relieve them of the need to broadcast any genuine
local content on their local radio stations. Failing businesses should be
allowed to fail, where such failures have resulted from errors of strategic or
operational commercial and managerial judgement by their owners or
managers.
A local radio licence requires the broadcasting of local content in a local
market. If any of these owners no longer wish to offer local content, or operate
genuinely local radio stations as a result, nothing is stopping them from
returning their licences to the regulator, stepping aside and allowing others to
pick up that challenge. Every new local commercial radio licence offered by
the regulator has attracted multiple applicants.
Market research by the Government and the regulator has consistently
demonstrated the overwhelming demand for local content from citizens across
the UK. Self-evidently, it is the 'localness' of local radio stations that imbues

them with their unique value to listeners. If the Government too chooses to
ignore all the data and available evidence it has at its disposal, it will perform
a severe disservice both to UK citizens, and to those station owners who have
worked long and hard to successfully deliver genuinely local radio to their
local communities.
Local commercial radio should deliver what its name promises – local content
for local people. The fundamental responsibility of local radio licensees to
deliver on that promise to citizens must be maintained.
[UKRD Group Limited wholly owns and operates 16 local commercial radio
stations and a significant portfolio of websites. UKRD has interests in
numerous DAB multiplexes, a national sales house and two further
commercial radio stations.]

EXECUTIVE SUMMARY
Radio consumption in the UK continues to demonstrate remarkable
robustness, compared to other traditional media, and radio's key
characteristics – portability and background consumption – place it in a prime
consumer position within our multi-tasking world.
However, the UK commercial radio sector as a whole has not exhibited
growth in recent years:
 Commercial radio's share of total radio listening is 43%, down from a peak
of 51% in 19983
 Commercial radio's total revenues declined by 35% in real terms between
2000 and 2011, at the same time as the number of commercial radio
licences increased by 21%4
 Commercial radio's share of total UK advertising expenditure fell to 2.7%
in 2011, a level first achieved by the sector in the 1990s5
 The commercial radio sector, in aggregate, is no longer profitable,
compared to annual operating profits of £109m as recently as 2004.6
Our opinion is that the most significant reason for the current poor
performance of commercial radio in the UK has been the pursuit of misguided
and destructive public policies for the sector, particularly:
 Incentives offered by governments and the regulator to commercial radio
licensees as a quid pro quo for their financial commitment to the DAB
platform
 Legislative change permitting consolidation of the commercial radio sector
into an oligopoly, with the two largest owners now controlling 72% of
commercial radio consumption7
 The award of new local commercial radio licences, many of whose service
areas could never prove economically viable, in opaque 'beauty parade'
processes that failed to enhance sector plurality or introduce new entrants
to the sector
 Narrow focus on the single public policy objective of DAB digital
switchover for commercial radio, whilst permitting other longstanding
objectives – 'localness', content diversity, consumer choice, plurality of
ownership – to be sidelined and diminished.
Public policies pursued by successive governments and successive
regulators have had a terribly negative impact on the commercial radio sector,
resulting in:
 An aggregate lack of competitiveness against BBC radio
 Diversion of an estimated £0.5bn sector revenues from radio content to
DAB technology
 The loss of unique, genuinely local radio content on an unprecedented
scale
 Acceleration of these impacts following The Digital Economy Act 2010.

Despite these failings in public policy, our opinion is that regulation of the
commercial radio sector remains necessary in order for the regulator's stated
objectives to be achieved:
 "Ensuring a wide range of … radio services of high quality and wide
appeal"
 "Maintaining plurality in the provision of broadcasting".8
We believe that a long-term, multi-platform practical regulatory strategy is
needed for the commercial radio sector that can be agreed between the
industry and the regulator. Such a strategy must favour neither a particular
delivery platform, nor a particular segment of the sector, nor a particular
licensee. It must seek to deliver what is best for the commercial radio sector
as a whole, not as individual licensees, and to deliver what is best for
citizen/consumers in the long run.
We propose neither less regulation nor more regulation of the commercial
radio sector. Our overarching concern is that any regulatory regime for
commercial radio must be:
 Fit for the task and sufficiently up-to-date
 Appropriate to achieve the public objectives
 Measured in its implementation
 Transparently administered
 Fairly applied to all licensees
 Focused on the needs of citizen/consumers
 Not pre-empted or contaminated by other state objectives (such as DAB
digital radio switchover).
Appropriate, measured and transparent regulation will be an essential pre-
requisite to creating the right environment for the commercial radio industry to
thrive, one of the key DCMS themes.9 Growth and innovation can only come
to the fore once the industry has been offered a clear future path and a clear
regulatory regime in which it can be achieved. The present situation in which
licensees have been offered so many uncertainties concerning their
analogue radio broadcasting licences mitigates against the very improvement
in sector performance that DCMS is seeking. Long-term planning, investment
and strategic thinking prove almost impossible while the Minister has the
power to shutter a licensee's analogue radio business at short notice, purely
in pursuit of enforced DAB digital radio switchover.
The commercial radio industry and the regulator need to achieve an
appropriate regulatory regime through dialogue, consultation and discussion.
Those interactions must be made directly with licensees who are operating
genuinely local commercial radio stations, not with a trade body that
increasingly seems only to represent the ambitions of its largest subscriber. A
regulator that has tendered 296 commercial radio licences should have an
obligation to conduct direct discourse with those licensees.
In response to the specific issues raised by DCMS:

RADIO LICENSING REGIME
We note that, in the commercial radio sector, auctions of national licences
failed to achieve the desired outcomes:
 National commercial analogue radio licensees have collectively had little
competitive impact on the significant audiences for BBC national radio
stations (national analogue commercial radio's market share is only 6%)10
 Auctions of national commercial radio licences were not repeated every
eight years, as planned, leaving incumbents unchallenged for two decades
 The auctions have provided The Treasury with little fiscal return in recent
years because national commercial radio licence fees were reduced to
peppercorn rents.11
Now that the commercial radio sector is dominated by oligopolies, it is
impossible to see how an auction process for local licences would not lead to
greater concentrations of sector ownership. Oligopolies seek increased
market power and the exclusion of new entrants, and an auction process
would only enhance the opportunities to further both those objectives.
Our opinion is that 'beauty parades' remain the most appropriate licence
award mechanism to achieve the regulator's policy objectives for local
commercial radio. Rather than replace the existing system, 'beauty parades'
need to be made considerably more transparent so that:
 Commercial radio licence applications are placed in the public domain in
their entirety
 Regulatory assessments of commercial radio licence applications are
placed in the public domain in their entirety
 Decision-making processes made by the regulator to award commercial
radio licences are placed in the public domain in their entirety
 Commercial radio licensees can be allowed to fail commercially, and their
licences re-advertised.
We would argue that it is not the 'beauty parade' system that has failed the
commercial radio sector, but the way in which those 'beauty parades' have
been administered with a lack of transparency, local market analysis and
objective criteria. What is required is to remedy the failings of the 'beauty
parade' system of local commercial radio licence awards, not to abandon it
altogether.
MUSIC FORMATS
Empirical data demonstrate that a significant reason for commercial radio's
lack of competitiveness against BBC radio is the tendency of commercial
radio stations to:
 Offer content that is similar to their commercial radio competitors
 Target demographic groups close to their commercial radio competitors
 'Cannibalise' the audiences and revenues of their commercial radio
competitors

 Allow their content to drift away from their regulated Format and towards a
'centre ground' of mass appeal.12
These behaviours conform to economic analysis that, where a small number
of competing radio broadcasters operate in an unregulated local market, they
will tend to offer similar content aimed at what they consider to be the most
significant potential mainstream audience.13 This produces outcomes that one
economist concluded "fail to achieve either the industry or the social good".14
As a result, continuing regulation of commercial radio station Formats remains
a necessary intervention, even more so when:
 The number of local commercial radio stations licensed in local markets
remains very limited (UK average is 4.8 stations)15
 Commercial radio ownership is already highly concentrated
 Significant barriers to sector entry exist
 No new analogue commercial radio licences are being offered.
Our opinion is that, rather than remove commercial radio licence 'Formats'
altogether as suggested by DCMS, Formats need to be made fit for purpose
and regulated effectively, achieved by:
 The regulator having clearly defined strategies to segment local markets
by demographic and/or by content and/or by music to ensure that the
commercial radio sector in aggregate can better compete with BBC radio
 Amendments to those elements of Formats that become outdated should
be considered sympathetically by the regulator where a licensee can
submit evidential data that clearly demonstrate the declining appeal of a
music genre or programme element
 Flexibility of the regulator to merge co-owned neighbouring small, local
licences into a single licence where evidential data demonstrate that their
individual Formats are not economically viable
 Re-advertisement of a licence if the incumbent fails.
Neither do we concur with the notion that the regulation of Formats becomes
less necessary as sector ownership becomes more concentrated. We have
identified no evidential data to support the theory, suggested by the Office of
Fair Trading, that an owner of multiple licences in a local market will strive to
offer listeners a more diverse range of content or will increase the collective
market share of its stations.16
On the contrary, evidence from London points to opposing outcomes. In the
UK's most competitive radio market, where nine of the 22 analogue
commercial radio stations are co-owned, the commercial radio sector's market
share has fallen to an all-time low of 47% from 55% a decade earlier.17 The
performances of the nine co-owned stations have demonstrated no noticeable
improvement since they came under common ownership.
LOCALNESS

Localness has always been the bedrock of UK commercial radio. Local
commercial radio stations comprise 71% of commercial radio listening and
31% of all radio listening in the UK.18 Although the BBC has always been the
dominant force in national radio (78% market share), in local radio it has
been commercial radio that enjoys the majority of listening (79%).19
Thirteen years ago, 'heritage' local commercial radio stations ranked first (in
terms of market share) in 15 of the UK's 19 largest local radio markets.20
Today, only two of those stations are still ranked first. Although the number of
competing local commercial stations has increased in some of those markets,
the overwhelming trend has been the migration of listening from local
commercial radio to BBC network radio during that period.
The diminishing appeal of those 'heritage' local commercial radio stations has
coincided with the reduction of substantial volumes of genuinely local content
from many local commercial radio stations' outputs, and with the
homogenisation of many stations' long-established individual identities in their
local markets.
We believe it is no coincidence that the commercial radio sector's most
successful performance, in terms of audiences and revenues, occurred during
the 1990s, when competition in local markets was at its most fierce between
competing stations with different ownership, all of which offered substantial
volumes of local content. Since then, commercial radio's performance in the
largest UK local markets has tumbled.21
Market research by the regulator has consistently demonstrated consumer
preferences for additional local commercial radio content over more national
commercial radio services.22 Local 'heritage' stations had always been the
bedrock of commercial radio's 'localness' because they were the most
profitable licensees and could afford significant expenditure on the production
of local content.23
Subsequently, successive regulators advertised new local commercial radio
licences to serve smaller and smaller service areas, many of which struggled
to be economically viable as standalone stations. Over time, the commercial
radio industry landscape became transformed. John Myers' report noted that
"whereas the vast majority of local commercial stations used to be ‘big’, the
majority now are relatively ‘small’".24
By 2006, 63% of commercial radio sector
revenues were generated by only 13% of stations, predominantly the heritage
licensees.25
The Digital Economy Act 2010 was intended to provide small, struggling local
commercial radio stations with some financial relief, by reducing the volume of
local content they were required to broadcast, and by allowing them to
network output between neighbouring stations. This objective has
undoubtedly succeeded in preventing the enforced closure of many small,
local radio businesses.

However, the same legislation also permitted owners of some of the largest
and most profitable commercial radio stations:
 To make considerable reductions in the volume of local content broadcast
 To create 'quasi-national' and regional networks from local radio licences
 To be absolved from broadcasting any local content on local radio
licences as a quid pro quo for broadcasting their station on the national
DAB digital radio platform.26
The outcome of these changes has been an unprecedented reduction in local
content broadcast by local commercial radio stations. There is no empirical
evidence to demonstrate that those reductions have done anything but reduce
the competitive performance of the commercial radio sector as a whole. The
danger is that reduced audiences for local commercial radio inevitably lead to
lower revenues that necessitate further cuts to production of local content,
creating a deepening downward spiral.
Our opinion is that there are no benefits from further relaxation or removal of
the current localness rules, as suggested by the DCMS consultation. Quite
the opposite, we believe that localness should be made a firm requirement
from all local radio licensees. Exceptions should be made only where financial
data from licensees can be provided to the regulator, demonstrating that
continuing operating losses would lead directly to a station's closure.
At the same time, we do not concur with the regulator's current use of hourly
local news bulletins during stations' daytime output as a proxy for the delivery
of 'localness' by local commercial radio licensees. We believe that the
presence of 'localness' within a local radio station's output cannot be
confirmed solely by 'box-ticking' its provision of local news bulletins.
We wholeheartedly support Ofcom's assertion that:
“The major outcome of localness delivery is the feel for an area a listener
should get by tuning in to a particular station, coupled with confidence that
matters of importance or interest to people in the area will be accessible on-
air”.27
We propose that the regulator should initiate discussions with genuinely
local commercial radio stations to create a markedly improved system for
the regulation of 'localness' that will secure a greater minimum commitment
than local news bulletins from the local commercial radio sector. The objective
should be to ensure that as much locally relevant material is broadcast by
local commercial radio licensees as proves economically feasible, not to
reduce the objective of 'localness' to a single proxy.
LOCAL FM RADIO
Our opinion is that DAB digital radio switchover would be disastrous for our
industry. Even if the government's switchover criterion of 50% of listening

attributable to digital platforms were ever to be attained, mandatory closure of
FM local station transmissions would prove practically impossible because:
 There is insufficient local DAB spectrum at present to accommodate all
existing analogue local commercial radio licensees
 Local DAB multiplexes have failed to launch in some areas, despite Ofcom
having awarded licences for those areas in 2007-828
 Out-of-home radio listening (presently 35% of total radio listening) would
collapse to almost zero because: only 1% of cars have DAB radios; no UK
mobile phones incorporate DAB radios; local DAB mobile reception
remains insufficiently robust in many areas (covering only 43% of roads)29
 Commercial radio would risk sudden, catastrophic revenue declines
because a potential 50% loss in hours listened, precipitated by FM switch-
off, would incur a proportionate loss in advertising revenues
 The most significant part of a commercial radio company's valuation is
embodied in the scarcity of the FM/AM broadcast licences it owns, and
that valuation would be slashed to zero the moment its analogue licences
were surrendered.
Furthermore, digital platforms account for a significantly lower proportion of
local radio listening than of total radio listening (27%):
 Only 16% of listening to local commercial radio is via digital platforms
 Only 11% of listening to BBC local radio is via digital platforms.30
The available data imply that only around 10% of listening to local commercial
radio is via the DAB platform, whereas 74% of listening to local commercial
radio remains via analogue FM/AM platforms.31 These proportions have only
been achieved after thirteen years of intensive and expensive industry
marketing campaigns and promotions to persuade consumers to buy DAB
radio receivers. To date, the growth in digital uptake has been 'linear',
suggesting that it could take a further thirteen years merely to increase local
commercial radio's DAB platform listening from 10% to 20%.
In these circumstances, FM switch-off would immediately put at risk three-
quarters of the volume of listening to local commercial radio. A government
decision to force the switch-off of local commercial radio's analogue
transmitters, as part of its misguided 'Digital Britain' strategy for radio, would
be viewed as nothing less than the wholesale destruction of our local
businesses by the state.
There seems to be no obvious rationale behind the DCMS proposal to
implement a 40% coverage threshold in determining whether local
commercial radio stations migrate to DAB transmission. A 50% coverage
threshold should be a necessary minimum.

FULL RESPONSE
INTRODUCTION
Before addressing the specific questions asked by DCMS in this consultation,
we wish to highlight some overarching issues concerning the regulation of the
UK commercial radio sector which, we believe, need to be considered in the
framing of new broadcasting legislation.
Ofcom's overall statutory duties are:
 "To further the interests of citizens in relation to communications matters"
 "To further the interest of consumers in relevant markets, where
appropriate by promoting competition".32
Two of Ofcom's six specific duties are:
 "Ensuring a wide range of TV and radio services of high quality and wide
appeal"
In its regulation of radio:
 "Ofcom’s primary concern in radio is to look after the interests of the
listeners. We have duties to ensure there is a wide range and diversity
of radio services across the UK catering for local tastes and interests and
that an appropriate amount of local material is broadcast on commercial
local radio, with a suitable proportion of it locally made"
 "Making sure that commercial radio can compete and flourish, without
too much regulation, because without a strong, healthy commercial radio
sector, stations won’t be in a position to offer listeners the best possible
service and the things that Ofcom has a duty to ensure are provided"
[emphasis added].34
As the DCMS consultation document noted, the radio medium continues to
be extremely popular amongst UK citizens. Compared to other traditional
media, usage of radio has been less significantly impacted by the internet.
This is largely the result of radio's important characteristic of portability and its
consumption as a 'background' secondary medium in a multi-tasking world.
However, despite the strength of the overall radio medium, the performance of
the commercial radio sector has deteriorated considerably in recent years:
 Commercial radio's share of total radio listening is 43%, down from a peak
of 51% in 199835
 Commercial radio's total revenues declined by 35% in real terms between
2000 and 2011, at the same time as the number of commercial radio
licences increased by 21%36
 Commercial radio's share of total UK advertising expenditure fell to 2.7%
in 2011, a level first achieved by the sector in the 1990s37
 The commercial radio sector, in aggregate, is no longer profitable,
compared to annual operating profits of £109m as recently as 2004.38

National commercial radio has never achieved the level of competitive
success anticipated at the launch of the three analogue national stations in
the early 1990s. Those three stations' aggregate share of radio listening is
6%, compared to the 42% share enjoyed by the BBC's five national analogue
networks.39
Local commercial radio proved a success with listeners from the outset forty
years ago and, having survived the challenge of relatively low revenues
during the first two decades, it succeeded spectacularly in commercial terms
during the 1990s. Local commercial radio's share of radio listening is 31%,
compared to BBC local/regional stations' 8% share.40
However, despite local radio stations having been the foundation of
commercial radio's success, much of the fabric of the UK's local commercial
radio sector has been torn apart by substantial legislative and regulatory
changes in recent years. In many local markets, the concept of genuinely
local commercial radio has been allowed to wither and die. The outcome has
been to reduce consumer choice in some localities and to disenfranchise
citizens and local advertisers from access to a genuinely local medium. These
impacts on local communities have been aggravated by the closure of long
established local newspapers in many markets.
On paper, it appears that the citizens of the UK still enjoy 296 licensed local
commercial radio stations.41 However, in reality, not only have the distinct
names of many local stations disappeared (replaced by national 'brands') but
an increasing number of 'local' stations no longer have a physical presence in
the service area to which they broadcast – no studio, no office, no local
salespeople, no local news, no links with the local community. These
revolutionary changes to the local radio landscape have happened because
legislators and regulators have enabled or allowed them to.
Empirical evidence has consistently demonstrated that citizens value local
radio considerably and, offered a choice, request more local radio rather than
more national radio. John Myers' report for 'Digital Britain' filled nine pages
with a wealth of market research data commissioned by Ofcom that
demonstrated the demand for local radio.42
Consumers' preference for local radio is good news for the commercial radio
sector, because it would struggle to compete directly for audiences with the
abundant resources available to the BBC's national networks. In 2008/9,
whilst commercial radio spent an average £27 per hour on programme
content, the BBC spent £9,120 per hour on Radio 4, £4,554 on Radio 3,
£4,578 on Radio 2 and £3,658 on Radio 1.43 The margin of difference in
funding explains why national commercial radio has been unable to achieve
significant audiences in competition with the BBC's popular national networks.
It also helps to explain why Channel 4 Television's plan to create national
digital radio channels to compete directly with BBC national radio networks
was abandoned after considerable start-up investment.

The BBC has sufficient resources from the Licence Fee to produce
sophisticated network radio programming that successfully informs, educates
and entertains a national audience. Local commercial radio stations, with
comparatively limited resources, have proven that they can produce
complementary, less costly content that has the ability to connect perfectly
with the needs of local audiences. When an incident happens in their local
community (such as floods, snow, school closures, traffic accidents or public
transport disruption), it is local radio that citizens turn to. Unless a local radio
station retains a physical presence in its service area, it cannot hope to fulfil
the expectations of its listeners for live, up-to-date local information. This
social value of local commercial radio has been well documented over many
years.44
At the same time, BBC local radio stations in England have been mandated
by the BBC Trust to produce "a primarily speech-based service of news,
information and debate" that targets an audience aged over 50 years.45 Just
as the collapse of the local newspaper market has widened the market gap for
local commercial radio, BBC local radio's move towards more speech has
increased opportunities for genuinely local commercial radio to serve a wider
audience with music-based formats.
Some local commercial radio owners, both large and small, have pursued the
opposite strategy of largely de-localising their local radio stations (to the
extent that regulation allows them). In the short term, this has undoubtedly
reduced their operating costs. In the medium term, however, it can often
reduce the audiences for those stations and, consequently, their revenues.
Trapped in a downward spiral of falling costs/audiences/revenues, some local
stations have eventually had to be sold, closed or transformed into 'non-local'
local commercial radio stations.
The scale of this transformation of local commercial radio is evident from
sector data:
 Listening to local commercial radio is currently 31% of total radio listening,
down from a peak of 41% in 199846
 Commercial radio's local advertising revenues fell by 38% in real terms
between 2004 and 201147
 The regulator decreed that 100 local commercial radio stations "should not
generally be required to broadcast local material and locally made
programmes"48
 56 local commercial radio licences have been consolidated into two quasi-
national brands ('Heart' and 'Gold').49
These changes have been achieved by regulatory redefinition:
 The term 'locally made programmes' was extended to include content
made in a region beyond a local station's immediate service area (for
example, content produced in Sussex is now considered to be 'local' for a
local station in Surrey, potentially 70 miles away)50
 Some local station owners have been relieved of having to maintain a
physical presence within the service area of their licence51

 Local stations were offered a "reduction in locally made programme hours"
if they agreed to broadcast hourly 'local news' during daytime.52
The resulting contradiction between the existence of 296 supposedly local
commercial radio licences and, in reality, the loss of local commercial radio
content from many local markets was highlighted by Trevor Dann, former
chief executive of The Radio Academy:
"I think what we are seeing here is a failure of regulation on a scale to match
the banking crisis. These [local commercial radio] stations were set up
originally by Ofcom and its predecessors – the IBA and The Radio Authority –
to provide services for local people, local listeners and also for local
advertisers and, gradually, they are becoming not radio stations, but relay
stations of playlists and DJs making programmes in London. That is not what
they were set up to do".53
As owners of genuinely local commercial radio stations in local markets, we
are strongly committed to investment in local radio content, where
economically feasible, in the long term and consider that:
 Competition and consumer choice within local radio markets can only be
beneficial for the entire radio industry
 A strong local commercial radio sector will benefit listeners, advertisers
and shareholders alike
 The positive legacy of 'local commercial radio' is in danger of being
devalued in the eyes of listeners and local advertisers as a result of the
de-localisation of stations in many markets.
Ofcom chief executive Ed Richards had explicitly recognised the importance
of local content to local commercial radio in a speech made five years ago:
“Some have called for a huge relaxation in relation to localness, some in the
[commercial radio] industry even call for a complete removal of all regulation.
They believe that localness is either no longer valued or that its value is
significantly outweighed by its cost. The problem is that the evidence is to the
contrary. What our research tells us is that people continue to want to hear
local programming. … But we are not convinced that the market alone will
deliver this if left to its own devices. We recognise very clearly the significant
economic challenges faced by the radio sector, but our forthcoming proposals
will not involve eliminating the obligation to deliver local programming or its
reduction to a negligible level”.54
The government's 'Digital Britain' consultation reinforced this importance of
'localness' in local commercial radio:
"The Localness Review was clear in its findings that localness will be more,
rather than less, important in the future, becoming a station’s Unique Selling
Point in a much more competitive marketplace. We agree with this view and
will continue to ensure that locally made content, relevant to local listeners, is
an essential characteristic of UK commercial radio".55

However, since then, legislators and the regulator appear to have taken every
opportunity to ignore these pledges and, instead, to facilitate the removal of
large amounts of local content from the local commercial radio sector. Why?
The answer is 'DAB' digital radio. Successive governments and regulators
have sought leverage to create a successful migration of radio licensees from
the analogue to digital platform by offering 'carrots' to local commercial radio
owners in return for their financial support for DAB radio. The inducements
have included:
 Automatic licence renewals (obviating the need for a competitive 'beauty
contest') for local commercial stations if they additionally broadcast on
their local DAB multiplex
 Removal of local content obligations for 100 local commercial radio
stations if they additionally broadcast on the national DAB multiplex.
The government was transparent about its motives for amending radio
legislation within the Digital Economy Act 2010:
"Our objective is to achieve a [DAB] Digital Radio Upgrade … The intended
impact is to provide clarity to broadcasters, [receiver] manufacturers and
listeners, alongside cost-savings and economies of scale which will be
necessary to achieve the Digital Radio Upgrade programme" [emphasis
added].56
Our opinion is that the most significant reason for the current poor
performance of commercial radio in the UK has been the pursuit of misguided
and destructive public policies for the sector, particularly:
 Incentives offered by governments and the regulator to commercial radio
licensees as a quid pro quo for their financial commitment to the DAB
platform
 Legislative change permitting consolidation of the commercial radio sector
into an oligopoly, with the two largest owners now controlling 72% of
commercial radio consumption57
 The award of new local commercial radio licences, many of whose service
areas could never prove economically viable, in opaque 'beauty parade'
processes that failed to enhance sector plurality or introduce new entrants
to the sector
 Narrow focus on the single public policy objective of DAB digital
switchover for commercial radio, whilst permitting other longstanding
objectives – 'localness', content diversity, consumer choice, plurality of
ownership – to be sidelined and diminished.
Public policies pursued by successive governments and successive
regulators have had a terribly negative impact on the commercial radio sector,
resulting in:
 An aggregate lack of competitiveness against BBC radio
 Diversion of an estimated £0.5bn sector revenues from radio content to
DAB technology
 The loss of unique, genuinely local radio content on an unprecedented
scale

 Acceleration of these impacts following The Digital Economy Act 2010.
Despite these failings in public policy, our opinion is that regulation of the
commercial radio sector remains necessary in order for the regulator's stated
objectives to be achieved:
 "Ensuring a wide range of … radio services of high quality and wide
appeal"
We believe that a long-term, multi-platform practical regulatory strategy is
needed for the commercial radio sector that can be agreed between the
industry and the regulator. Such a strategy must favour neither a particular
delivery platform, nor a particular segment of the sector, nor a particular
licensee. It must seek to deliver what is best for the commercial radio sector
as a whole, not as individual licensees, and to deliver what is best for
citizen/consumers in the long run.
We propose neither less regulation nor more regulation of the commercial
radio sector. Our overarching concern is that any regulatory regime for
commercial radio must be:
 Fit for the task and sufficiently up-to-date
 Appropriate to achieve the public objectives
 Measured in its implementation
 Transparently administered
 Fairly applied to all licensees
 Focused on the needs of citizen/consumers
 Not pre-empted or contaminated by other state objectives (such as DAB
digital radio switchover).
Appropriate, measured and transparent regulation will be an essential pre-
requisite to creating the right environment for the commercial radio industry to
thrive, one of the key DCMS themes.59 Growth and innovation can only come
to the fore once the industry has been offered a clear future path and a clear
regulatory regime in which it can be achieved. The present situation in which
licensees have been offered so many uncertainties concerning their
analogue radio broadcasting licences mitigates against the very improvement
in sector performance that DCMS is seeking. Long-term planning, investment
and strategic thinking prove almost impossible while the Minister has the
power to shutter a licensee's analogue radio business at short notice, purely
in pursuit of enforced DAB digital radio switchover.
The commercial radio industry and the regulator need to achieve an
appropriate regulatory regime through dialogue, consultation and discussion.
Those interactions must be made directly with licensees who are operating
genuinely local commercial radio stations, not with a trade body that
increasingly seems only to represent the ambitions of its largest subscriber. A
regulator that has tendered 296 local commercial radio licences should have
an obligation to conduct direct discourse with those licensees.

In response to the specific issues raised by DCMS:

RADIO LICENSING REGIME
DCMS has asked if the existing 'beauty parade' system of awarding
radio licences should be replaced by auctions.
On this issue, DCMS appears to have largely pre-empted discussion by
assuming that its separate proposal for "further deregulation and/or removal"
of requirements for "diverse and local content" has already been accepted.60
However, if the maximisation of 'public value' from commercial radio remains
the regulatory objective, we believe it can only be achieved through a 'beauty
parade' system.
In a sector where the barriers to market entry are so significant, due to the
scarcity of radio spectrum, it remains imperative to regulate supply within that
market. However, it appears wholly inconsistent to insist that only a limited
number of radio broadcasting stations can be granted a licence, but then to
award those few licences to the highest bidders.
Figure 1: Audiences and licence fees of UK national analogue
commercial radio stations61
% reach % share £/annum % revenue £/annum % revenue £/annum % revenue
Classic FM 10 3.4 1,161,000 14% 50,000 6% 10,000 0%
TalkSport 6 1.8 563,000 6% 100,000 0% 10,000 0%
Absolute Radio 3 1.3 1,125,000 12% 100,000 0% 10,000 0%
2011/2 to 2015
OFCOM LICENCE PAYMENTSRAJAR Q2 2012
to 2007/8 2007/8 to 2011/12
sources: RAJAR & Ofcom
The 'experiment' in the early 1990s of the regulator awarding three national
commercial radio licences to the highest bidders evidently failed to achieve
the desired outcomes:
 National commercial analogue radio licensees have collectively had little
competitive impact on the significant audiences for BBC national radio
stations (national analogue commercial radio's market share is only 6%)62
 Auctions of national commercial radio licences were not repeated every
eight years, as planned, leaving incumbents unchallenged for two decades
 Auctions have provided The Treasury with little fiscal return in recent years
because national commercial radio licence fees were reduced to
peppercorn rents by the regulator.63
These failings would risk being repeated if the same auction process were to
be extended to local commercial radio licences. Now that the commercial
radio sector is dominated by oligopolies, it is impossible to see how an auction
process for local licences would not lead to greater concentrations of sector
ownership. Oligopolies seek increased market power and the exclusion of
new entrants, and an auction process would only enhance the opportunities to
further both those objectives.
Figure 2: Current market shares by owner of total commercial radio
listening64

47.1
24.7
7.2
5.6
2.3 2.0 1.5 1.5 1.0 0.7 0.6 0.6 0.5 0.4 0.4 0.3 0.3
0
5
10
15
20
25
30
35
40
45
50
GlobalRadio
+GMG
BauerRadio
UTVRadio
TIMLGolden
Square
Orion
UKRD+Local
RadioCo.
PlanetRock
LincsFM
Group
Sunrise
Radio
TindleRadio
Celador
Radio
Town&
Country
JazzFM
Premier
Christian
Cumberland
NewsGroup
Quidem
Kent
Messenger
source: RAJAR
Whereas, in the grocery sector, four retailers control 75% of the UK market, in
the radio sector, 72% of UK commercial radio listening is attributable to only
two companies.65 Such a high level of market concentration in a sector tends
to be exacerbated by government regulations that favour existing oligopolies,
making it even more difficult for new businesses to enter the market and
improve competition.66
We believe that the award of local radio licences by auction would potentially:
 Increase market concentrations further by enabling oligopolies to acquire
additional licences in local markets that they already dominate
 Increase market concentrations further by enabling oligopolies to acquire
licences in new local markets that they do not already dominate
 Disenfranchise existing licensees who may have invested considerable
resources over many years in the successful management and marketing
of their genuinely local radio station to listeners and local advertisers
 Discriminate against new entrants who would be likely to face difficulties to
raise start-up capital for a single-term local licence.
Whereas, theoretically, for national commercial radio licences, it might be
possible for a licensee to create an operating profit during their early years of
operation, the predominantly fixed-cost structure of radio makes it
considerably harder for a small- or medium-sized local commercial station to
generate an operating profit during a single term of its licence.
Auctions can only result in public value if they operate within a perfect
marketplace – one that is open to competitors and where supply is not limited.
The commercial radio broadcast market could not be further from this ideal. It
is heavily regulated, the supply of licences is very limited and there exists
considerable market distortion from 'carrots' offered to licensees in return for
their commitment to broadcast on DAB.

Our opinion is that 'beauty parades' remain the most appropriate licence
award mechanism to achieve the regulator's policy objectives for local
commercial radio. Rather than replace the existing system, 'beauty parades'
need to be made considerably more transparent so that:
 Commercial radio licence applications are placed in the public domain in
their entirety
 Regulatory assessments of commercial radio licence applications are
placed in the public domain in their entirety
 Decision-making processes made by the regulator to award commercial
radio licences are placed in the public domain in their entirety
 Commercial radio licensees can be allowed to fail commercially, and their
licences re-advertised by the regulator.
It had been noted in John Myers' report for 'Digital Britain' that, of 23 new local
radio stations licensed by Ofcom, only four managed to meet or exceed the
targets for audiences they had forecast in their business plans.67 Evidence
that almost half those stations fell short of their projections by more than 50%
would appear to demonstrate that a 'reality gap' exists between the regulator's
confidence in selecting a licence applicant and the characteristics of the
commercial radio market.
The High Court had noted that, in its awarding of local commercial radio
licences, Ofcom is permitted "a wide measure of discretion and width of
decision".68
We believe that a considerably more open and objective
assessment system needs to be demonstrated publicly.
We would argue that it is not the 'beauty parade' system that has failed the
commercial radio sector, but the way in which those 'beauty parades' have
been administered by the regulator with a lack of transparency, local market
analysis and objective criteria. What is required is to remedy the failings of the
'beauty parade' system of local commercial radio licence awards, not to
abandon it altogether.

MUSIC FORMATS
DCMS has asked whether current format requirements for local
commercial radio stations should be removed.
This issue of 'Formats' is connected to a much larger, and more significant,
question as to whether an increasingly deregulated commercial radio
marketplace can deliver Ofcom's objectives for the sector:
 Ensuring a wide range of … radio services of high quality and wide appeal
 Maintaining plurality in the provision of broadcasting69
Until 1989, radio station 'Formats' did not need to exist because only one local
commercial radio station had been licensed in each local market (except for
London, which had a 'music' station and a 'talk' station). It was only when the
regulator licensed additional 'incremental' local radio stations in local markets
that it was considered necessary to 'protect' the incumbent from direct
competition. For the first time, citizens were offered a choice of local
commercial radio stations, each of which catered for particular tastes and
interests, rather than there being only one local commercial station in the
market that had to be 'all things to all people'.
Figure 3: Annual revenues and volumes of listening to UK commercial
radio70
0
100
200
300
400
500
600
700
800
900
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
0
5,000
10,000
15,000
20,000
25,000
30,000
revenues of commercial radio (£m @ 2011 prices) [left axis]
volume of listening to commercial radio (million hrs/annum) [right axis]
source: Ofcom/RAB, JICRAR, RAJAR
It would seem to be no coincidence that UK commercial radio enjoyed its
fastest growth in both audiences and revenues during the 1990s, at a time
when competition for listeners and advertisers was most intense as a result of
regulatory intervention. Those interventions ensured that the number of
commercial radio stations was increased steadily, that competition was
fostered in local radio markets for the first time, and that each station offered
listeners content different from its competitors by the incorporation within
licences of detailed 'Formats'. The licensed monopolies that had existed in

local markets until 1989 were suddenly replaced with genuine competition that
led to increased innovation and creativity within the entire commercial radio
sector (and the BBC).
If the new local commercial radio stations licensed in the 1990s had been
permitted to compete head-on with the incumbents, they would have merely
cannibalised the audiences and revenues of their competitors. As a result, the
sector as a whole would not have grown as spectacularly as it did, and the
positive outcomes achieved for radio station owners, their shareholders, their
advertisers and their listeners during the 1990s would not have proven
possible. Regulatory intervention helped to achieve those successful
outcomes for the commercial radio industry as a whole.
Without selective and appropriate regulatory intervention, diversity within radio
markets does not occur naturally. A 1951 study by American economist Peter
Steiner of the commercial radio industry in the US, where station formats have
never been regulated, concluded:
“If, as is often suspected, [radio] broadcasters exaggerate the homogeneity of
audiences and their preferences for certain program stereotypes, the
tendencies towards [programme] duplication will be increased. … The
problem, of course, is that a series of competing firms, each striving to
maximize its number of listeners, will fail to achieve either the industry or the
social good. Here, then, competition is providing a less than desirable
result”.71
Steiner's study demonstrated mathematically that, where only a small number
of unregulated, competing radio stations exist within a local market, they will
all tend to duplicate the most popular radio format, rather than choose to
adopt formats that are complementary to each other. Not only is this outcome
of 'cannibalisation' unproductive for listener choice, it also proves
commercially unproductive for the radio industry as a whole.
Steiner suggested that a “discriminating monopoly controlling all [radio]
stations would produce a socially more beneficial program pattern” and cited
the BBC’s “monopolization of radio” in Great Britain as an example of a
European solution to the problem of ensuring that a sufficiently diverse
offering of content was made to listeners.72
In 1951, that diversity had been ensured by the BBC's operation of
complementary national radio stations (the Light Service, Home Service, Third
Service), each providing different content aimed at very different audiences.
Today, for the UK commercial radio sector, that guarantee of content diversity
for audiences is the direct responsibility of the media regulator.
Our opinion is that any abrogation or reduction of the regulator's responsibility
to mandate Formats for local commercial radio stations will, in Steiner's
words, "fail to achieve either the industry or the social good".73
The surest way
to diminish further the profitability of the commercial radio sector would be to
allow local stations to compete head-to-head against each other as they will

inevitably cannibalise each other's audience and advertisers, leaving listeners
with little to choose between them in terms of content.
The impact of such cannibalisation can already be witnessed in the London
market, the most competitive local radio market in the UK. The four most
listened to local commercial music stations have different Formats prescribed
by the regulator:
 Capital FM: "contemporary/chart-led service for under-40s"
 Heart FM: "contemporary music-led service for 25 to 44 year olds"
 Kiss FM: "dance music for primarily under-30s"
 Magic FM: "easy-listening soft music-led for … at least over-35s".74
Figure 4: Distribution of hours listened to the four leading London local
commercial music radio stations by age group75
0
1
2
3
4
ADULTS
15-24
ADULTS
25-34
ADULTS
35-44
ADULTS
45-54
ADULTS
55-64
ADULTS
65-74
ADULTS
75+
Capital FM Heart FM Kiss FM Magic FM
source: RAJAR. Index of 1 = normal distribution of all radio listening in London market by age
group
Capital FM and Heart FM are owned by Global Radio, while Kiss FM and
Magic FM are owned by Bauer Radio. Analysis of these four stations'
demographic appeal demonstrates that Capital FM and Kiss FM appeal to
almost identical youth demographics (under-40's) in London, whilst Heart FM
and Magic FM have similar, broad appeal across the audience aged 15-54.76
None of these four stations appear to have above-average appeal to over
55's, despite Magic FM's 'Format' requiring its output to be "easy listening"
music "aimed at the more mature Londoner".77
Figure 5: Distribution of hours listened to the three BBC network music
radio stations by age group78

0
1
2
3
ADULTS
15-24
ADULTS
25-34
ADULTS
35-44
ADULTS
45-54
ADULTS
55-64
ADULTS
65-74
ADULTS
75+
BBC Radio 1 BBC Radio 2 BBC Radio 3
source: RAJAR. Index of 1 = normal distribution of all radio listening in UK market by age
group
Contrast the four London local commercial stations' collectively narrow
demographic appeal with a comparative analysis of the BBC's national music
networks. It is evident that the three BBC stations – Radios 1, 2 and 3 – have
considerably different and entirely complementary demographic appeals.79 In
aggregate, they offer audiences a comprehensive portfolio of services that
demonstrate above average appeal across all age groups. This is the
outcome of BBC strategy and careful regulation by the BBC Trust.
Figure 6: Market shares of radio listening in the London market80
60.3
38.3
13.1
5.5 3.3
6.2
47.3
49.7
4.6 5.3 4.7 5.1
0
10
20
30
40
50
60
70
Commercial
radio
BBC radio Capital FM Heart FM Kiss FM Magic FM
Q2 1999 Q2 2012
source: RAJAR
In the highly competitive London radio market, the BBC's share of listening
has increased steadily from 38% in 1999 to 50% today.81 In 2006, the BBC
Trust had introduced 'Service Licences' for each of the BBC's public services
which prescribe their 'Format' and target audience, just as has existed for
commercial radio since 1989.82
Conversely, commercial radio's share of listening in the London market has
declined from 60% in 1999 to 47% today.83 This has been the result of
cannibalisation of audiences within the commercial radio sector. Three of the

four most popular London commercial music stations have suffered falls in
their market shares of radio listening since 1999.84
Whilst the 'Formats' of BBC radio stations have become more and more
detailed as a result of increased interventions by the BBC Trust, the 'Formats'
of local commercial radio stations have become much briefer as a result of
deregulation. Commercial radio 'Formats' that used to run to two pages have
been reduced to one or two sentences.85 However, all that this deregulation
has achieved is to offer commercial radio station owners the freedom to
'cannibalise' the audiences of competing commercial stations in their local
markets.
Empirical analysis of music radio stations in the London market has confirmed
Steiner's conclusion that, left mostly to their own devices, competing radio
stations tend to shift their content to a 'middle ground' that can end up
appealing to similar audiences (a phenomenon the regulator labels 'Format
creep').86 It is notable that, in London, the Capital, Heart, Magic and Kiss
stations each achieve similar 5% shares of listening, whilst BBC Radio 2 is far
ahead with a 12% market share because, as the graphs above demonstrated,
there is no competing local commercial music radio station targeting over-55's
in the London market.87
The failure of commercial radio collectively to compete effectively against
BBC radio in the London market has had terrible economic consequences for
the whole sector because London comprises 21% of the entire UK radio
market.88
Our opinion is that, rather than remove commercial radio licence 'Formats'
altogether as suggested by DCMS, Formats need to be made fit for purpose
and regulated effectively, achieved by:
 The regulator having clearly defined strategies to segment local markets
by demographic and/or by content and/or by music to ensure that the
commercial radio sector in aggregate can better compete with BBC radio
 Amendments to those elements of Formats that become outdated should
be considered sympathetically by the regulator, and a licensee must
submit evidential data that clearly demonstrate the declining appeal of a
music genre or programme element
 Flexibility of the regulator to merge co-owned neighbouring small, local
licences into a single licence where evidential data demonstrate that their
individual Formats are not economically viable
 The regulator re-advertising a licence if the incumbent fails.
Neither do we subscribe to the theory that increased consolidation of the
commercial radio sector will lead automatically to a greater diversity of content
being offered to consumers, thereby alleviating the need for 'Format'
regulation. This argument has been voiced by some in the commercial radio
sector as a reason to permit greater market concentrations of ownership. The
Office of Fair Trading summarised the theory:

"The basic proposition is that, by changing radio stations’ format and/or
programming post-merger in a way that benefits listeners (that is, by greater
demographic specialisation by individual radio stations), combined radio
stations can achieve a larger and more focused total audience. The resulting
airtime is therefore more valuable to advertisers seeking to reach a large,
focused demographic".89
The same notion was referenced in debate around the Communications Act
2003:
 Baron Smith of Finsbury, then an MP, argued that “the more stations a
company has in one area, the more likely it is to invest in local output,
events and support”.90
 Ralph Bernard, then chairman of GWR Group, said that “listeners will be
the real winners, with [radio] companies like GWR being able to build local
centres of excellence offering local output of greater range and quality”.91
 Lord Eatwell, then chairman of the commercial radio trade association,
CRCA, said: “Small stations seek to maximise their audiences by going for
the middle ground … A larger company can offer services to different parts
of the community”.92
However, we have failed to identify empirical evidence which demonstrates
that the significant consolidation that has taken place within the UK local
commercial radio sector has led to greater consumer choice in local markets,
or has precipitated improvements in the performance of the commercial radio
sector in those markets. On the contrary, analysis of available data seems to
tell a different story.
Figure 7: Characteristics of the largest UK local commercial radio
markets in 2002 and 201293

market Q3 2002 Q2 2012 Q3 2002 Q2 2012 Q3 2002 Q2 2012
London 24 22 17 10 55.1 47.3
Manchester 10 16 8 7 45.5 48.9
Birmingham 11 12 7 6 53.6 53.3
Glasgow 8 9 7 4 65.7 62.4
Liverpool 9 12 7 5 47.0 45.7
Newcastle 8 10 7 5 56.1 54.5
N. Ireland 10 11 6 6 42.6 43.5
Southend/Chelmsford 17 17 10 7 50.4 42.7
Bristol 9 6 36.7 33.6
Wolverhampton 11 7 46.9 29.6
Sheffield 8 10 7 5 50.6 52.4
Maidstone/Medway 17 15 5 6 40.1 37.6
Nottingham 7 6 43.3 37.3
Edinburgh 7 9 6 6 59.9 57.4
Southampton/Portsmouth 10 7 41.5 41.8
Cardiff/Newport 8 9 7 5 48.8 40.0
Brighton/Eastbourne 7 6 36.0 34.6
Humberside 8 13 6 6 50.0 47.2
Leeds 8 8 7 5 49.2 42.0
U.K. 260 300 45.3 43.3
no. of commercial radio
analogue licences
no. of commercial radio
analogue station owners
commercial radio's %
market share of all radio
listening
source: RAJAR & Ofcom data. Total Survey Areas of markets highlighted have changed
substantially between 2002 and 2012, making direct comparison difficult
Between 2002 and 2012, despite a 15% increase in the number of licensed
commercial radio stations, the aggregate performance of the UK commercial
radio sector diminished from a 45% to 43% market share of radio listening.94
This decline was considerably greater in urban and metropolitan markets
where the number of owners of commercial radio stations reduced.
As noted previously, the London market has demonstrated the most
significant loss of commercial radio listening, from 55% in 2002 to 47%
today.95 The number of commercial station owners in London reduced
substantially during that period from seventeen to ten. Global Radio now
controls the largest portfolio of nine analogue stations (eight local, one
national) in the London market through acquisition of Chrysalis Radio in 2007
and GCap Media plc in 2008.
At the time, Global Radio had stated that its acquisition of GCap Media “will
bring significant benefits to radio listeners and advertisers”.96
It argued that
“the enlarged group will be able to compete more effectively with the BBC,
which today dominates the UK radio landscape” because it “will have an
increased ability to hire and retain the industry’s best talent”.97
Commenting on the acquisition, the Office of Fair Trading noted that “Global
will re-position its now commonly-owned stations to attract listeners, in a way
designed to increase total audience size for all stations combined, and
increase the demographic focus of the respective station audiences”.98
It
concluded that “both types of efficiencies, if realised, will improve the
Global/GCap station offer to listeners and advertisers” [emphasis added].99

Figure 8: Market shares of radio listening in the London market: FM
stations presently owned by Global Radio100
0
2
4
6
8
10
12
14
Capital FM Heart FM Xfm Choice FM LBC FM
1999 Q2 2000 Q2 2001 Q2 2002 Q2 2003 Q2 2004 Q2 2005 Q2
2006 Q2 2007 Q2 2008 Q2 2009 Q2 2010 Q2 2011 Q2 2012 Q2
source: RAJAR. Dark columns indicate post-acquisition performance. Excludes recently
acquired 'Smooth FM'
Audience data from the London market demonstrate that, since its acquisition
of GCap Media in 2008, Global Radio has stemmed the declining audiences
of its flagship station, Capital FM. However, the overall performances of its
FM stations have barely changed since their acquisition. As a result, in the
local market in which Global owns the greatest number of licences, there is no
evidence that more concentrated ownership has noticeably improved the
performances of its local FM licences, or has improved the commercial radio
sector's competitiveness against BBC radio.
Neither has Global Radio's performance beyond London achieved the
improvements anticipated by the Office of Fair Trading. The group's 15.6%
share of total radio listening last quarter was its lowest since acquiring GCap
Media.101
These data for Global Radio are cited as just one example of increased
market concentrations in the commercial radio sector having failed to improve
its performance. Other merger and acquisition activities have similarly failed to
result in more diverse content being offered to listeners, or in an improved
performance of the commercial radio sector.
Our opinion, from the available evidence, is that larger portfolios of stations
owned by a smaller number of owners do not successfully "increase total
audience size for all stations combined, and increase the demographic focus
of the respective station audiences”, as the Office of Fair Trading had
suggested.102 On the contrary, the present, highly consolidated commercial
radio sector appears to be less competitively successful against BBC radio
than it had been when local stations had more diverse ownership.
As a result, continuing regulation of commercial radio station 'Formats'
remains a necessary intervention, even more so when:

 The number of local commercial radio stations licensed in local markets
remains very limited (UK average is 4.8 stations)103
 Commercial radio ownership is already highly concentrated
 Significant barriers to sector entry exist
 No new analogue commercial radio licences are being offered.

LOCALNESS
DCMS has asked if the present 'localness' rules secure an appropriate
level of local content for listeners and whether localness rules should be
relaxed further or removed.
'Localness' had always been considered such an intrinsic component of UK
local radio that, for thirty years, broadcasting legislation contained no
requirement for licensed local commercial radio stations to broadcast local
content. It was not until the 1990s, when one commercial radio owner started
to use computer technology to produce live and time-shifted 'local'
programmes from a network centre many miles away from stations' service
areas, that the regulator discovered it had few powers to intervene.104
The Communications Act 2003 required, for the first time, local commercial
radio stations to produce "locally-made programmes" and "local material".105
Until then, local commercial radio stations had broadcast intrinsically local
programmes without having been compelled to. However, as soon as this
'localness' legislation had been introduced, some radio owners started to
argue for a relaxation of the new rules.
The outcome today is that, as noted in our introduction, some local
commercial radio stations now broadcast no content produced within their
service area and have no physical presence within their service area. The
recent period of reduction in local content from some local commercial radio
stations has coincided with declining audiences for local commercial radio.
Whilst it is difficult to isolate 'cause' and 'effect', analysis of data from the UK's
largest local radio markets shows very similar outcomes.
Figure 9: Characteristics of the largest UK local commercial radio
markets in 1999 and 2012106

Local market Heritage ILR station Launch
1999 Q2 2012 Q2 1999 Q2 2012 Q2 1999 Q2 2012 Q2 19
London Capital London 1973 10,130 11,249 2 8 13.1 4.6
Manchester Key 103 1974 2,706 2,445 1 3 14.9 7.8
Birmingham Free Birmingham (BRMB)1974 2,027 2,493 1 3 15.9 9.6
Glasgow Clyde 1 1973 1,847 1,853 1 1 26.8 12.5
Liverpool City 1974 1,812 1,806 1 3 20.9 9.8
Newcastle Metro 1974 1,395 1,508 1 2 25.2 9.2
Sheffield Hallam 1974 1,295 1,286 1 2 24.3 12.2
Wolverhampton Free Shropshire (Beacon)1976 1,285 360 1 4 13.0 8.7
N. Ireland Downtown 1976 1,273 1,442 3 4 13.2 8.3
Bristol Heart West Country (GWR)1982 1,260 2,195 1 3 18.4 11.8
Southend/Chelmsford Heart Essex (Essex Radio)1981 1,137 1,361 1 3 18.2 10.1
Humberside Viking 1984 1,115 918 1 4 16.5 9.1
Southampton/Portsmouth Heart Solent (Power) 1988 1,111 1,796 5 6 10.9 7.0
Maidstone/Medway Heart Kent (Invicta) 1984 1,107 1,191 1 2 20.7 14.9
Edinburgh Forth 1975 1,095 1,118 1 1 18.2 17.2
Nottingham Capital East Midlands (Trent)1975 1,047 1,974 1 3 17.6 8.9
Brighton/Eastbourne Heart Sussex (Southern) 1983 936 1,372 1 3 21.0 11.8
Leeds Aire 1981 932 689 2 6 14.8 6.5
Cardiff/Newport Capital South Wales (Red Dragon)1980 881 1,003 1 6 18.7 6.3
Total Survey Area
('000 adults)
Heritage station
market rank #
Heritage station
market share %
Co
m
source: RAJAR & Ofcom data. Total Survey Areas of markets highlighted have changed
substantially between 2002 and 2012, making direct comparison difficult
A comparison of commercial radio's performance in 1999 and today in the
UK's major local markets shows that:
 'Heritage' local commercial radio stations in all major local markets have
slid down the rankings (of fifteen stations ranked first in their markets in
1999, only two remain first today)
 Many 'heritage' local commercial radio stations have lost more than half
their market shares since 1999
 Significant volumes of listening to local commercial radio have migrated to
BBC radio since 1999, reducing commercial radio's market share in all
major markets except Edinburgh and Sheffield
 Some local markets now have more local commercial radio stations than
in 1999 but 'cannibalisation' and 'Format drift', aggravated by the sector's
lack of a competitive product against BBC Radio Two, have nevertheless
led to reductions in commercial radio's market share
 Some of the most competitive local markets, with the greatest number of
local commercial radio stations, such as London and Essex, have suffered
the greatest migrations of listening to the BBC.107
Economic theory suggests that a supplier who has varied the specification of
a product, and subsequently experiences a loss in demand, will quickly
respond by rectifying its error in order to restore demand and revenues. This
theory was applied to the issue of 'localness' in commercial radio by Ralph
Bernard, then executive chairman of GWR Group:
“Localness is a key selling point to listeners – it has to be when our
competitors are generally regional or national – and advertisers in an area are
much more likely to support a radio station that is a vibrant local business with

its roots deep in the local community. So we're experts on what makes a local
station really hum, which aspects are relevant to our listeners, which events
are going to draw a crowd, which local institutions deserve support … This is
something that, if we get it wrong, will cause our stations to lose audience and
advertisers faster than any regulatory process could react to”.108
However, in a highly regulated industry such as commercial radio, where a
scarce broadcasting licence can hold a significantly greater intrinsic monetary
value than the value of the radio business using that licence, perfect market
forces are not necessarily present. Market entry to new competitors is highly
restricted in commercial radio, leading to an absence of dynamic market
forces. During parliamentary debate of the Communications Act 2003, Simon
Thomas MP had noted this issue:
"It is possible for local radio stations to ignore what is going on in their own
patch by not covering certain issues or individuals. People say that the
stations would suffer, but they could have a licence for several years, so it
would be some time before they suffered".109
An example of this lack of market responsiveness followed the merger in 2005
of the UK's two largest commercial owners, GWR Group and Capital Radio
Group, to create GCap Media. The merged entity continued GWR's existing
strategy of de-localising and homogenising its local radio stations. The
outcome was rapidly diminishing audiences and advertising revenues across
the company's entire portfolio. All but one of the group's 42 FM local radio
stations lost listening volumes between 2000 and 2007, many by more than
half. All of the group's 25 AM local radio stations lost listening volumes, some
by more than three-quarters.110
GCap Media's strategy to 'de-localise' local commercial radio proved
financially catastrophic. Between 2005 and the end of 2007, the company's
market capitalisation plunged from £711m to £200m.111 The changes it had
made to its local stations had received regulatory approval, despite the
existence of market research demonstrating the overwhelming demand from
consumers for genuinely local commercial radio. Those disastrous strategies
of 'de-localisation' pursued by GCap Media have impacted the entire
commercial radio sector to this day.
Figure 9 showed that many of the largest local commercial radio stations in
the largest local markets are no longer required to broadcast more than seven
hours per day of locally made programmes on weekdays. These 'heritage'
stations had mostly been licensed during the 1970s as the first commercial
radio stations in their markets and they had the greatest loyalty from their
audiences, the widest 'Formats' and the widest demographic appeal.
Subsequent stations licensed in those local markets were likely to have
smaller service areas and considerably narrower 'Formats' that required them
to address a specific demographic, to cater for a particular taste in music, or
serve an ethnic sub-group.

'Heritage' local commercial radio stations serving local markets of more than
500,000 adults have been the most profitable of the UK's 296 licensed local
commercial radio stations.112 These would seem to be the least likely local
commercial radio businesses to require economic relief from the requirement
in their licence to produce significant amounts of local content for their
audiences. Yet, recent amendments to these stations' 'Formats' mean that
none are being required to broadcast more than seven or ten hours of local
programmes on weekdays, and no more than four hours per day at
weekends.
Figure 10: Local commercial radio station operating profits by
population coverage area (£m per annum)113
percentage of total number of commercial radio stations
………..……….63%........................ .....13%..... …...11%..... ………...13%............
65
400
865
1,200
1,400
-20-3
-200
0
200
400
600
800
1,000
1,200
1,400
1,600
<50k 50-150k 150-250k 250-500k 500k-1m 1-5m >5m
source: Ofcom
The Digital Economy Act 2010 was intended to provide small, struggling local
commercial radio stations with some financial relief, by reducing the volume of
local content they were required to broadcast and by allowing them to network
output between neighbouring stations. This objective has undoubtedly
succeeded in preventing the enforced closure of many small, local radio
businesses.
However, the same legislation also permitted owners of some of the largest
and most profitable commercial radio stations:
 To make considerable reductions in the volume of local content broadcast
 To create 'quasi-national' and regional networks from local radio licences
 To be absolved from broadcasting any local content on local radio
licences as a quid pro quo for broadcasting their station on the national
DAB digital radio platform.114
The outcome of these regulatory approvals has been that the landscape of
UK local commercial radio has been changed more significantly during the
last two years than ever in its history. Although a proportion of genuinely local
radio stations still exist and thrive, much of the landscape has been

transformed into a handful of brands with identical formats across the UK,
similar to the retail transformations that have impacted local High Streets.
We believe that such levels of homogenisation of local commercial radio are
far removed from the regulatory policy objectives for the commercial radio
sector. In an increasingly crowded leisure time marketplace where 'radio' now
faces increased competition from internet-delivered content, it is local radio's
'localness' that makes it unique for consumers. Removal of that 'localness'
reduces local radio largely to a sequence of music that can be just as well
delivered by any number of algorithms from computer programmes anywhere
in the world.
Figure 11: UK radio shares of listening by station type115
0
10
20
30
40
50
2012Q2
2011Q2
2010Q2
2009Q2
2008Q2
2007Q2
2006Q2
2005Q2
2004Q2
2003Q2
2002Q2
2001Q2
2000Q2
1999Q2
1998Q2
1997Q2
1996Q2
1995Q2
1994Q2
1993Q2
All BBC Network Radio Local Commercial Radio
BBC Local/Regional All National Commercial
source: RAJAR
Local commercial radio's performance in the UK market, measured by its
share of radio listening, is lower now than it was two decades ago, despite the
number of local commercial radio stations having almost tripled since then.116
Commercial radio's revenues from local advertisers, in real terms, were lower
in 2012 than they had been in 1989, when there were five times fewer
stations.117
There appears to be no empirical evidence to demonstrate that the
unprecedented regulatory changes that local commercial radio has undergone
during the last two years have increased its audiences, revenues or led to a
wider choice of radio content for consumers.
Our opinion is that there are no benefits from further relaxation or removal of
the current localness rules, as suggested by the DCMS consultation. Quite
the opposite, we believe that localness should be made a firm requirement
from all local radio licensees. Exceptions should be made only where financial

data from licensees can be provided to the regulator, demonstrating that
continuing operating losses would lead directly to a station's closure.
A complete removal of localness requirements would lead to many local
commercial radio stations becoming little more than 'music jukeboxes'. Their
output would become indistinguishable from the almost infinite choice of
music content available to consumers via the internet and delivered to a
rapidly growing number of portable and home devices.
Mike Powell, then managing director of Guildford local commercial radio
station 'County Sound', had said in 1993:
"Jukebox radio is not local radio. If you hold an existing local licence and
you're a jukebox, I think that you deserve to lose your licence".118
Our opinion is that Powell's words are as valid today as they were then. There
would appear to be little point in regulating a local commercial radio industry
that utilises scarce radio broadcast spectrum but which, in return, is not
compelled to offer local content or social benefit to UK citizens. Furthermore,
the government is likely to be condemning large portions of the local
commercial radio sector to economic failure in the medium term by allowing
licensees to completely remove the most significant 'unique selling point' from
their outputs.
DCMS has asked whether a mechanism exists to secure an appropriate
level of localness provision, particularly local news.
We concur with DCMS that local news is a very important element of
'localness' and we note that consumer demand for local news has been
demonstrated consistently by market research. However, we do not consider
as entirely appropriate the present regulatory policy of viewing a licensee's
provision of hourly local news bulletins during daytime programmes as a
proxy for a station's 'localness'.
Consumers' attachment to a local radio station involves a more sophisticated
relationship than the demand for a two-minute local news bulletin that might
follow 58 minutes of networked content from a regional or national broadcast
centre. In its efforts to simplify the regulation of 'localness', the regulator
appears to have reduced a very complex concept to a box-ticking exercise.
We wholeheartedly support Ofcom's assertion that:
“The major outcome of localness delivery is the feel for an area a listener
should get by tuning in to a particular station, coupled with confidence that
matters of importance or interest to people in the area will be accessible on-
air”.119
We also support Ofcom's aim to move away from 'box-ticking' as a suitable
means to ensure the provision of 'localness':

“To devise any system of box-ticking against various localness criteria would
be fundamentally to misunderstand the nature of local content and its context.
Such a system would be likely to create a non-stop conveyor-belt of check-
sheets, where any queries about content would probably be impossible to
clarify. Moreover, it would be inconsistent with Ofcom’s regulation of television
output, which is moving away from a box-ticking system”.120
Local commercial radio's ability to create intrinsically local content through the
hiring of a local presenter producing a live, interactive programme from a
radio studio within the station's service area has always been the sector's
greatest strength. It should be evident, even to a casual listener, when that
intrinsic 'localness' is missing from a local radio station's output, as Ofcom
recognised:
“Localness is, ironically, most easily identified in its absence”.121
We propose that the regulator should initiate discussions with genuinely
local commercial radio stations to create a markedly improved system for
the regulation of 'localness' that will secure a greater minimum commitment
than local news bulletins from the local commercial radio sector. The objective
should be to ensure that as much locally relevant material is broadcast by
local commercial radio licensees as proves economically feasible, not to
reduce the objective of 'localness' to a single proxy.
We recognise the difficulties involved in creating a workable regulatory
framework for 'localness', as did the 'Digital Britain' consultation:
"The challenge for Government and Ofcom is to devise a regulatory regime
which secures the provision of local content but that equally reflects the
economic realities of local media markets. … We recognise there are
challenges in devising such a regulatory structure, as it must give clarity both
to broadcasters and be enforceable by Ofcom. However, this difficulty should
not be allowed to undermine the principle".122

LOCAL FM RADIO
DCMS has asked whether to apply the measure of no station with an
MCA of 40 per cent or more overlapping the local DAB multiplex
remaining on FM after digital radio switchover.
We consider this issue to be hypothetical. Even if the government's
switchover criterion of 50% of listening attributable to digital platforms were
ever to be attained, mandatory closure of FM local station transmissions
would prove practically impossible for these reasons:
 There is insufficient local DAB spectrum at present to accommodate all
existing analogue local commercial radio licensees
 Local DAB multiplexes have failed to launch in some areas, despite the
regulator having awarded licences for those areas in 2007-8123
 Out-of-home radio listening (35% of total radio listening) would collapse to
almost zero because: only 1% of cars have DAB radios; no UK mobile
phones incorporate DAB radios; and local DAB mobile reception remains
insufficiently robust in many areas (covering only 43% of roads)124
 Commercial radio would risk sudden, catastrophic revenue declines
because a potential 50% loss in hours listened, precipitated by FM switch-
off, would incur a proportionate loss in advertising revenues
 The most significant part of a commercial radio company's valuation is
embodied in the scarcity of the FM/AM broadcast licences it owns, and
that valuation would be slashed to zero at the moment its analogue
licences were surrendered.
These facts are understood by the commercial radio sector but continue to be
ignored by public servants who insist that FM switch-off remains a feasible
objective. It will only prove feasible if the government's underlying objective is
to decimate the commercial radio sector at a single stroke. The wholly
misguided policy objective of 'DAB radio switchover' that has been pursued by
successive governments since the 1980s would destroy commercial radio and
would be likely to provoke an almighty consumer backlash against DAB radio,
the regulator, the government and, sadly, the radio medium itself.
Whilst overall consumer take-up of DAB radio has proven desultory to date,
even after a costly thirteen-year marketing campaign, consumer take-up of
local commercial radio listening via the DAB platform has been disastrous.
Only 16% of listening to local commercial radio is via digital platforms, and
an even smaller proportion (estimated at 10%) is via the DAB platform.125
Figure 12: UK radio share of listening by platform and station type126

65% 63%
42%
78% 74%
27% 30%
50%
11% 16%
8% 7% 8% 11% 10%
0%
20%
40%
60%
80%
100%
ALL RADIO BBC National
Networks
National
Commercial
BBC Local
Radio
Local
Commercial
analogue digital not stated
source: RAJAR & Ofcom
Even if listening to all radio via digital platforms were to eventually reach the
50% criterion, local commercial radio is likely (from extrapolation of RAJAR
data) to have reached only 30% by then, and an estimated 20% might be
attributable to the DAB platform. In these circumstances, FM switch-off would
immediately put at risk 70% of the volume of listening to local commercial
radio. Disenfranchised listeners would be forced to replace every analogue
household and car radio at a stroke (and to maintain their existing listening
patterns) if local commercial radio were not to be fatally impacted.
The reason that local commercial radio is unenthusiastic and opposed to DAB
digital switchover is not due to a sentimental attachment to analogue
technology, but because the data show that the local radio sector (both
commercial and BBC) has the most to lose from mandatory FM switch-off.
Other stakeholders may see fit to endorse DAB switchover because maybe,
from the available data, they have less to lose. However, local commercial
radio evidently has absolutely everything to lose.
Let our message be perfectly clear to policymakers … FM switch-off would
immediately put at risk three-quarters of the volume of listening to local
commercial radio. A government decision to force the switch-off of local
commercial radio's analogue transmitters, as part of its misguided 'Digital
Britain' strategy for radio, would be viewed as nothing less than the
wholesale destruction of our local businesses by the state.
There seems to be no obvious rationale behind the DCMS proposal to
implement a 40% coverage threshold in determining whether local
commercial radio stations migrate to DAB transmission. A 50% coverage
threshold should be a necessary minimum.
© 2012 Grant Goddard
Published by Radio Books

http://www.radiobooks.org
http://www.grantgoddard.co.uk
1 DCMS. ACommunications ReviewFor TheDigitalAge, open letter, 16 May 2001, p.2
2 DCMS. Communications Review:Seminar Series: Seminar 5:Radio, p.1
3 RAJAR. Q2 2012 andQ2 1998
4 RadioCentre/RAB data adjusted by RPI; Ofcomstation numbers data
5 http://stakeholders.ofcom.org.uk/binaries/research/cmr/cmr12/CMR_UK_2012.pdf
6 Ingenious Consulting.Commercial Radio: TheDriveto Digital, January 2009,p.2
DresdnerKleinwort WassersteinResearch. UK Radio: Tune InOr Turn Off?, 17 December2004, p.7
7 RAJAR. Q2 2012
8 http://www.ofcom.org.uk/about/what-is-ofcom/statutory-duties-and-regulatory-principles/
9 DCMS. A Communications ReviewFor TheDigitalAge, open letter, 16 May 2001, p.2
10 RAJAR. Q2 2012
11 http://stakeholders.ofcom.org.uk/binaries/consultations/renewal-national-licences/statement/classic-talksport-terms.pdf
http://stakeholders.ofcom.org.uk/binaries/consultations/renewal-national-licences/statement/Absolute.pdf
12 Grant Goddard.Tools ForRadioContent Regulation #1: Playlist Diversity Analysis, February2003
Grant Goddard. DoNew CommercialRadio Stations 'Cannibalise'Existing Players?, January 2005
13 Peter O. Steiner. Program Patterns AndPreferences,And The Workability OfCompetitionIn Radio Broadcasting,Quarterly
Journal of Economics, volume66, 1952, p.202
14 ibid.
15 http://stakeholders.ofcom.org.uk/binaries/research/cmr/radio4.pdf
16 Office of Fair Trading. Completed Acquisition By GlobalRadioUK Limited OfGCap Media plc, report ME/3638/08, London,27
August 2008, p.59, para.165
17 RAJAR. Q2 2012 andQ3 2002
18 RAJAR. Q2 2012
19 ibid.
20 RAJAR. Q2 1999 andQ2 2012
21 ibid.
22 John Myers. An IndependentReview OfThe Rules Governing LocalContentOn Commercial Radio,2009,pp.45-53
23 Ofcom. The Future OfRadio: Consultation, 17 April 2007,p.38,Figure 17
24 John Myers. An IndependentReview OfThe Rules Governing LocalContentOn Commercial Radio,2009,p.24
25 Ofcom. The Communications Market: InterimReport, February 2006, p.42
26 http://stakeholders.ofcom.org.uk/broadcasting/radio/localness/localness-guidelines
27 Ofcom. Localness On Local CommercialRadio Stations: An Interim ConsultationDocument Reviewing Localness Basics, 4
March 2004, pp.4-5
28 http://licensing.ofcom.org.uk/radio-broadcast-licensing/digital-radio/awards0708/awards/
http://stakeholders.ofcom.org.uk/binaries/research/radio-research/digital-radio-reports02/report280711.pdf
30 ibid. (RAJAR. Q1 2011 –latestdata published by Ofcom)
31 ibid.
32 Communications Act2003
34 Peter Davies.Speech to RadioCentreConference, 24January 2007
35 RAJAR. Q2 2012 andQ2 1998
36 RadioCentre/RAB data adjusted by RPI. Ofcomstation numbers data
38 Ingenious Consulting.Commercial Radio: TheDriveto Digital, January 2009,p.2
DresdnerKleinwort WassersteinResearch. UK Radio: Tune InOr Turn Off?, 17 December2004, p.7
39 RAJAR. Q2 2012
40 ibid.
41 ibid.
42 John Myers. An IndependentReview OfThe Rules Governing LocalContentOn Commercial Radio,2009,pp.45-53
43 Grant Goddard,IndependentRadioProductions CommissionedBy The BBC, 2010, Figure20, p.37
44 RadioCentre. ActionStations!(March 2011is themostrecent marketresearch)
45 BBC Trust. BBC LocalRadioServiceLicence, May 2012,p.1
46 RAJAR. Q2 1998 andQ2 2012
47 RadioCentre/RAB data adjusted by RPI
48 http://stakeholders.ofcom.org.uk/broadcasting/radio/formats-content/changes/
49 http://www.ofcom.org.uk/static/radiolicensing/amfm/analogue-main.htm
50 http://stakeholders.ofcom.org.uk/consultations/radio/statement/?a=0
http://stakeholders.ofcom.org.uk/binaries/consultations/radio/statement/Approved_areas_annex.pdf
51 ibid.
52 ibid.
53 Today, BBC Radio4, 31 July 2012
54 Ed Richards.Ofcom Annual Lecture:Citizens And Consumer In AConvergedWorld,16October2007
55 DCMS/BIS. Digital Britain: Final Report, June2009, p.100,paras.36-37

56 DCMS/BIS. Digital Britain Report: ImpactAssessment, June2009, p.109
57 RAJAR. Q2 2012
59 DCMS. ACommunications ReviewFor TheDigitalAge, open letter, 16 May 2001, p.2
60 DCMS. Communications Review:Seminar Series: Seminar 5:Radio, p.3
61 RAJAR. Q2 2012
http://stakeholders.ofcom.org.uk/binaries/consultations/renewal-national-licences/statement/classic-talksport-terms.pdf
62 RAJAR. Q2 2012
63 http://stakeholders.ofcom.org.uk/binaries/consultations/renewal-national-licences/statement/classic-talksport-terms.pdf
64 RAJAR. Q2 2012
65 ibid.
66 A. Negbennebor. Microeconomics: The Freedom To Choose,2001
67 John Myers. An IndependentReview OfThe Rules Governing LocalContent On Commercial Radio,2009,pp.27-8
68 Radio Man Loses High CourtChallenge, Kent Messenger,26 July 2005
70 RadioCentre/RAB data adjusted by RPI. JICRAR &RAJAR data
71 Peter O. Steiner. Program Patterns AndPreferences,And The Workability OfCompetitionIn Radio Broadcasting, Quarterly
Journalof Economics, volume66, 1952, p.202
72 ibid., pp.206-207
73 ibid., p.202
75 RAJAR. Q2 2012
76 ibid.
78 RAJAR. Q2 2012
79 ibid.
80 RAJAR. Q2 1999 andQ2 2012
81 RAJAR. Q2 1999 andQ2 2012
82 http://www.bbc.co.uk/bbctrust/our_work/services/radio/service_licences.html
83 ibid.
84 ibid.
86 Grant Goddard.Tools ForRadioContent Regulation #1: Playlist Diversity Analysis, February2003
87 RAJAR. Q2 2012
88 ibid.
89 Office of Fair Trading. Completed Acquisition By GlobalRadioUK Limited OfGCap Media plc, report ME/3638/08, London,27
90 Chris Smith.ABillThat’s Out OfTune WithLocal Radio, Financial Times, London, 23 October 2002
91 BBC. Radio ReformUnveiled, BBConline,London, 14November2003
92 Saeed Shah. Jowell PoisedTo AllowMajor Radio Consolidation, The Independent,London, 14November2002
93 RAJAR. Q3 2002 andQ2 2012. Ofcomdata
94 RAJAR. Q3 2002 andQ2 2012
95 ibid.
96 Global Radio. Offer For GCapMedia plc, document,London, 31March 2008, p.5
97 ibid.
98 Office ofFair Trading. Completed Acquisition By GlobalRadioUK Limited OfGCap Media plc, report ME/3638/08, London,27
99 ibid.
100 RAJAR. Q2 1999 to Q2 2012
101 RAJAR. Q2 2012
102 Office ofFair Trading. Completed Acquisition By Global RadioUK Limited OfGCap Media plc, report ME/3638/08, London,27
103 http://stakeholders.ofcom.org.uk/binaries/research/cmr/radio4.pdf
104 John Myers. An IndependentReview OfThe Rules Governing LocalContentOn Commercial Radio,2009,p.54
105 HMSO. Communications Act 2003(c.21), section314:1
106 RAJAR. Q2 1999 to Q2 2012
107 ibid.
108 Ralph Bernard. Address to the Westminster Media Forum ontheCommunications Bill, 5 December 2002
109 Hansard(2003a). HouseofCommons, Standing CommitteeE, Communications Bill, 23January 2003(afternoon)
110 Enders Analysis. GCap Media: TheEnd OfThe Road,January 2008
111 Enders Analysis. GCap Media: OnePrevious Owner, Needs Serious Attention,8 April2008
112 ibid.
113 Ofcom. The Future OfRadio: Consultation, 17 April 2007,p.38,Figure17
114 http://stakeholders.ofcom.org.uk/broadcasting/radio/localness/localness-guidelines
115 RAJAR
116 RAJAR. Q2 2012 & Q4 1992
117 RadioCentre/RAB data adjusted by RPI
118 Radio Waves, RadioNews, No. 16,26 February 1993

March 2004, pp.4-5
120 Ofcom. Radio –Preparing For TheFuture:Phase 1, 16December 2004,p.85
March 2004, pp.4-5
122 DCMS/BIS. Digital Britain: Final Report, June2009, p.100,paras.36-37
123 http://licensing.ofcom.org.uk/radio-broadcast-licensing/digital-radio/awards0708/awards/
http://stakeholders.ofcom.org.uk/binaries/research/radio-research/digital-radio-reports02/report280711.pdf
125 RAJAR. Q1 2011 (most recentdata from Ofcom)
126 RAJAR. Q1 2011 (most recentdata from Ofcom) http://stakeholders.ofcom.org.uk/binaries/research/radio-research/digital-
radio-reports02/report280711.pdf

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