Talking radio: Grant Goddard
- Published: 10 September 2008 16:39
- Last Updated: 11 September 2008 10:00
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UKRD's decision to close Fen Radio in Wisbech shows the difficulties small commercial radio stations face, says Enders Analysis radio analyst Grant Goddard.
When UKRD handed back its licence for Fen Radio and voluntarily closed the station this summer, it blamed Ofcom. Chief executive William Rogers criticised the regulator and its masters for a "complete lack of common sense". It would be tempting to characterise this as a David and Goliath tale - but the issues are more complex.
First, there are too many commercial radio stations in the UK - and too many of them are too small and offer similar content to similar audiences.
Who is to blame? The regulator, because it offered progressively smaller local radio licences during the 1990s without analysing local economies. But also the radio groups because they applied for these licences promising every station could break even by its third year on air.
Second, niche formats such as Fen Radio's rock music cannot work in small markets, particularly in rural areas, where there are simply not enough people. Fen Radio attracted 13,200 listeners per week in a market of only 80,900 adults.
Who is to blame? The regulator, because it awarded licences to applicants whose business plans did not make commercial sense (such as talk radio in Edinburgh, adult alternative in Solent, rock music in Plymouth). But also the licence applicants, because they wrote those business plans.
Third, rock music radio stations have a dismal track record, despite the UK being a global hub for the genre.
Who is to blame? The radio groups (with the honourable exception of Bauer's Kerrang!), which have largely made a pig's ear out of rock radio. GCap sold off Planet Rock and almost sold Xfm, Global Radio has demoted The Arrow to a rock jukebox, and Macquarie never launched its Plymouth rock station.
Next, many small stations are only sustained by being subsidised by their owners' larger stations. In the case of UKRD, its lucrative Cornwall and Norfolk stations subsidised the rest of the portfolio. This was fine while its monopoly over local radio advertising in those areas was maintained - until Ofcom arrived and introduced competition in those markets.
Who is to blame? The regulator, because it perpetuated some radio groups by protecting their monopoly in key local markets.
Finally, some radio groups have short memories. When UKRD purchased the Fen Radio station in 2001, it was a larger operation serving 110,000 adults in Wisbech and Ely, from two transmitters.
In 2003, UKRD asked the regulator's permission to make the station smaller, because it wanted to annex the Ely transmitter to its existing Cambridge station. UKRD argued that a more locally focused product for Wisbech would be more likely to secure the station's success. The regulator agreed, effectively sealing the station's fate.
Now it has closed, and UKRD's Rogers has commented that "the market is simply too small to sustain a service" and that "there's absolutely no evidence that this marketplace can sustain a radio station of this type".
However, it was UKRD itself that precipitated Fen Radio's smaller service area. What we are witnessing is "theatre'" in which a regulated industry finds it easy and convenient to blame Ofcom for its woes.
Whereas Ofcom's predecessor, the Radio Authority, could have been relied upon to forge a solution to save itself the embarrassment of a station closure, UKRD is finding Ofcom more hard-nosed.
These events are symptomatic of more than 30 years of the regulator and the industry conspiring to manipulate and distort the UK radio market. Solving that legacy is proving almost impossible.
