Is Sunrise able to fund a station or not?

On 31 January this year Ofcom gave their reasons for allowing the Litt Corporation to retain the Slough licence for Time 106.6 in the face of competition from community radio service Asian Star Radio. The Litt Corporation owns Sunrise Radio and was responsible for yesterday’s decision to ask listeners to donate cash to keep the station running (see earlier post).

It is ironic therefore that Ofcom cited the Sunrise Radio group’s superior financial resources as one of the key reasons for leaving the Slough licence with that organisation. The statement said, in part:

“This combination of strong competition for listeners and a somewhat heterogeneous licence area have historically made the Slough, Windsor & Maidenhead licence an extremely challenging one to operate. In this context, therefore, the Broadcast Licensing Committee took the view that the assessment of the applications under section 105(a) was of particular significance in this award.

“The Committee considered that the overall business plan proposed by Time 106.6 ('Time') was a realistic and conservative one that was based on existing levels of listening and revenue, but nevertheless anticipated the station becoming self-supporting in the new licence period. This follows a period which has seen the station's annual losses narrow considerably, partly as a result of cost savings achieved by co-locating in Southall with other stations owned by Time's parent company Litt Corporation. The ability of Litt Corporation to provide Time with funding as and when necessary, which it has consistently done in the past, also provided reassurance of the applicant's ability to maintain the service.”

http://licensing.ofcom.org.uk/radio-broadcast-licensing/analogue-radio/apply-for-licence/re-advertisement/awards/slough?utm_source=updates&utm_medium=email&utm_campaign=slough-re-award

Sunset or Sunrise?

Southall-based Sunrise Radio has today announced that it is appealing to listeners for funds to keep the station afloat.

A “news item” on the station website, and announcements on-air, say the Chairman of the Sunrise group Avtar Lit is asking listeners to financially support the radio stations:

“There has been an increasing trend among Asian broadcasters to be supported by their listeners and viewers. Many Asian TV channels are paid for by subscribers or viewers. With advertising rates failing to increase in 15 years and other costs escalating, there is no other way except a combination of advertising and listener contribution. Listeners can make a contribution by sending a cheque, or by credit card.”

It is not clear what, if anything, donors will receive in return for their contributions.

Along with many commercial radio companies the Sunrise group is thought to be cash-strapped having been badly hit by the downturn in advertising revenue. Recently, Sunrise Radio, Kismat Radio and Punjabi Radio ceased broadcasting on digital television to save costs, and Sunrise did not renew its contract on digital radio in the West Midlands. However this may be the first time an established UK commercial radio station has tried the listener subscription route.

The item does not elaborate on the scheme but Ofcom rules do permit appeals for funds for programming or services subject to certain conditions, including:

• Broadcasters should keep accurate and detailed records of donations and how they are spent. Records should demonstrate how donations received are used to fund the service.
• Ofcom strongly recommends that donations are kept in a separate, specific account so that information relating to donations and how they are spent is clear and easy to access. It is also recommended that audits of such accounts are conducted.
• Broadcasters should avoid creating unrealistic expectations about what donations can achieve and appeals should not improperly exploit any susceptibilities of the audience.
• Broadcasters should take care to ensure that the acceptance of donations does not prevent them from meeting the Code‟s requirements relating to due impartiality, no undue prominence of views and opinions, and editorial independence.

Listener appeals have been used widely elsewhere – for example the Public Service Broadcasters Telethons in the USA and by community radio operators worldwide. Many stations offer membership of some kind of “listeners club” in return for a minimum donation. However these are not run by profit-distributing commercial concerns like the Sunrise Group.

In the UK we are used to getting a wide range of radio free, at the time of listening, from the BBC and other stations so it will be interesting to see if this model can work here.

 

Global, the Competition Commission and Ofcom

This week the Competition Commission has shown that it has some teeth where Ofcom has only been provided with gums.  The Commission told Global Radio it must dispose of some stations in seven regions following concerns over its £70m purchase of Real and Smooth services from GMG Radio.

Global must sell some of the stations it bought as part of the GMG deal, or offload its own services such as Heart and Capital, in seven areas: the East Midlands, Cardiff, North Wales, Greater Manchester and the north-west, the north-east, central Scotland, South Yorkshire and West Yorkshire.

It is notable that the Competition Commission has decided that there would be “significant adverse effects”  in most regions outside London as a result of the merger. Although recognising that commercial radio operates in what it calls a two sided market – with separate competition for listeners and advertisers - the Competition Commission largely restricted its analysis to the effects on the advertising market, which is what it was essentially set-up to do.

In north-east England, where the heritage ILR services were both owned by EMAP (now Bauer Radio), the Radio Authority and Ofcom had over the years licenced three separate region-wide licences to compete with them:  Century Radio (now Real Radio); Galaxy (now Capital); and Smooth (which covers a slightly smaller region).   We now face a situation where all three region-wide alternatives are owned by Global. The only other players, apart from Bauer, are town or city-sized commercial services covering places away from the main conurbations of Tyneside and Teesside or a few community radio stations with very limited range.

Plainly it is sensible for the Competition Commission to decide that, as Bauer pointed out in their submission, this gives Global too great an influence in the region’s radio advertising market.  But why does Ofcom not see this as a potential reduction in plurality for radio LISTENERS too?

Ofcom would claim that radio listeners also have the alternative of BBC stations and digital media, but then advertisers have alternative outlets in other media as well. It is odd that, when it comes to money, the competition regulator sees this centralisation of control as a risk but, in matters of editorial policy and cultural variety, the broadcast regulator does not.

An while Ofcom argues that the regulation of “Formats” guarantees a choice and diversity of programming for listeners the Competition Commission’s report undermines this to an extent.  The report points out that, while the Capital North East Format specifies a target audience of 15-29 year olds the average age of their listeners is in fact 31.  Similarly while Smooth is supposed to aim for listeners 50+ the average age in practice is 47.  The Formats of these three originally distinctive regional stations have become so watered down that they are all effectively competing for slightly different versions of the same familiar middle ground.

Targeting radio programming is not an exact science, and I do not blame any operator for trying to occupy the high ground in terms of audience numbers, but why is Ofcom so content to acquiesce in allowing this narrowing of choice?

Growth of digital listening

The latest Rajar figures (Quarter 1 2013) show that half the UK population now listen to digital radio each week.  This includes listening online, and via television boxes and mobile phones etc. as well as, mainly, listening to DAB radios.

This is good news but does not mean that these people are ONLY using digital radio. At work, in the car or elsewhere they may still be using FM or AM radio, and some of their favourite local stations may not even be available on DAB.   While digital listening has seen a healthy 17% rise year-on-year, to 34.3% of all listening hours, this means the great majority of radio listening is still on FM or AM.

And, before we start to plan the FM switch-off again, remember that in many markets the most popular single station is not even available on DAB. And with the closure of some local and regional multiplexes, to make way for more national channels, these local services are not likely to be able to appear on DAB in the foreseeable future.

There are some good examples from the UKRD stable where stations from Wessex FM to 2BR to Yorkshire Coast Radio, and others, each now achieve a weekly reach of around 50% of their local population on FM – but cannot be efficiently moved onto DAB.

Metro Radio - Station of the Year

Congratulations to everyone at Metro Radio for achieving the Sony Award as Station of the Year (1m+) on Monday night. It's very well desrved.

As someone who worked on the launch of Metro way back in 1974 it is particularly pleasing to see Metro being nationally recognised for its commitment to its local area and doing the right things to make a continuing impact on the north-east listeners today.  Sadly, with the introduction of nationl branding and programme formats, few of the other first-generation stations are allowed to maintain such a strong local identity and sense of connection with their own patch.

Hats off to Bauer for allowing Metro to be Metro. But of course this makes the recent TFM decision even more bewildering......

Is DAB the solution or the problem?

The future of radio is digital. I cannot believe than in ten years time audio broadcasting will remain as the only medium delivered by old-fashioned analogue means. In far less than that time we will all expect to get our radio programmes via the digital links which will empower every other aspects of our lives. I already find it frustrating that I cannot pause and rewind a radio show or press a button to hear my favourite station’s traffic news at a moment which suits me.

But is DAB the most practical delivery method?

The great thing about radio broadcasting has always been that it is so straightforward, simple to set up and energy-efficient. DAB is technically brilliant but very complex and requires a large infrastructure. It assumes large groups of stations all wishing to cover exactly the same areas. For smaller stations DAB is far more expensive and cumbersome than the old system. For listeners, particularly with so many music stations now using a low bitrate in mono, DAB offers little benefit and, for many, a worse listening experience.

In many areas DAB simply does not have the capacity, even if they could afford it, to carry all the existing stations available locally on AM and FM, let alone the thousands now broadcasting on the web. I think DAB may be the only digital technology that offers fewer choices at lower quality and greater cost than the analogue system it replaces!

The reason is simply that DAB is OLD TECHNOLOGY.  By the standards of today’s digital devices it is prehistoric. It pre-dates the internet and did not anticipate the huge range of content expected on demand nor our expectation of interactivity.  DAB was developed as part of a European Union research project with the first transmissions being made in Germany in 1988. The specification was finalised in 1993. By contrast, Sir Tim Berners-Lee’s original proposal for what would become the World Wide Web was not published until 1989 and technical standards only began to emerge following his establishment of the World Wide Web Consortium in 1994.

For now, FM radio remains the best option for local broadcasting but Ofcom has been told to promote digital as the way forward and is looking on, apparently impotent, as analogue radio suffers and dies.

Given that frequency shortage is given by Ofcom as the principal reason why they cannot licence any new FM local radio stations it is ironic that, as a result of their own decisions, the utilisation of this scarce resource has become so wasteful.

For example, in north-east England TFM, now simply rebroadcasting Metro Radio, covers an area housing 788,467 adults in Teesside, Darlington, County Durham and North Yorkshire using a single frequency from a transmitter high up on the North York Moors. Meanwhile, based in Darlington, Star Radio now broadcasts its programmes to a set of smaller areas, all falling within the TFM footprint, using not ONE but FIVE frequencies. At least one of these in the south of County Durham could easily cover the Darlington area as well if a directional limitation originally designed to protect the separate Darlington licence were removed, but Ofcom refuses to do this on the grounds that they still regard Northallerton, Darlington and Durham as separate licences (even though they carry the same programmes)!

Of course frequency planning is a complex issue and the same frequency cannot necessarily be re-used at another site or at higher power, but using five different frequencies to cover a population of 433,000 adults when another station covers all of those, and 350,000 more, using a single frequency cannot be sensible or efficient.

 

 

Are there really no new FM frequencies available?

A number of prominent voices on Teesside are calling for a new local commercial licence to be offered for the area following the departure of TFM to Tyneside. Among them is ex-Radio Tees presenter and Darlington PR guru Graham Robb who last month asked Ofcom to advertise a new licence for Teesside. The regulator responded by saying there were no FM frequencies available and that a new analogue licence was counter to the Government policy of working towards digital-only broadcasting.

This was only to be expected. Several years ago Ofcom announced that it would no longer be advertising any new local commercial radio licences. The main reason given then was also that there are no suitable FM frequencies vacant in the most populous areas of the UK.

It has always been the case that an alleged lack of frequencies has been the excuse of choice used by successive governments and regulators to justify rationing access to the airwaves. It was used to delay the launch of BBC Radio One and local radio in the sixties, the launch of ILR in the 1970s, and community radio for a long while thereafter. The laws of physics have not changed in the intervening years, just the political will to permit more stations to blossom, kicking the police transmitters out of the FM broadcast band above 100 MHz for example permitted the introduction of national and regional commercial services.

There now appear to be another couple of issues behind Ofcom’s reluctance to allow any expansion of FM radio.  Firstly the efforts of some in the industry to promote DAB digital radio created the idea of a “digital switchover” for radio, closing down the existing FM stations. I’m sure I’ll write more about this shortly, but for now it’s sufficient to point out that there is no need for a digital switchover date for radio as there was for terrestrial TV. In the case of television the same UHF band was to be used for digital TV as had been used for analogue channels since the launch of BBC2 in the 1960s. To make room for new digital services the old analogue transmitters had to be closed, and this was done in a planned and remarkably efficient fashion.  By contrast, there is no immediate alternative use for the FM radio band – it will not be used for DAB.  Further there are a great deal more radio receivers to replace in the average household than there were analogue TV sets – for a long time people will be happy to keep using their FM radios.  DAB has been called “a solution in search of a problem”.

Secondly, Ofcom staff plainly feel overstretched. Compared to the previous sector-specific regulator, the Radio Authority, the communications watchdog has very few individuals dedicated to dealing with radio broadcast issues. Decisions on radio licences are taken by a general Broadcast Licensing Committee rather than the former dedicated and quite expert Radio Licensing Committee. For a year or so until last summer the considerable spectrum demands of the Olympics were often quoted as taking priority call over staff time, then Ofcom’s political masters demanded a new focus - on local TV!  

On 3 April 2012 the local radio licence for Slough, Windsor & Maidenhead, held by Time 106.6, was re-advertised, with a closing date for applications of 3 July.  There were only two applicants, the incumbent and a local Asian community radio service. In the past major new licence awards, contested by up to half a dozen companies, have been decided in less than three months, but in this case the applicants (including the incumbent whose licence was due to run out in May) had to wait until 16 January this year – some six and a half months later – for the re-award to the existing licensee to be announced. Apologising for the delay one Ofcom official explained that the award decision was postponed until January because of the volume of business at the Broadcast Licensing Committee. In particular the BLC was required to give priority to awarding the new-fangled (and misconceived) local TV licences over dealing with these old local FM radio licences.

So is there really a frequency shortage? Or a shortage of will at the DCMS and Ofcom?

Of course the FM band is limited in bandwidth and frequency planning is a complex technical task if mutual interference is to be avoided. For example two stations serving the same area must be spaced at least 0.4 MHz apart. But the fact is that the allocation of FM band frequencies has been done piecemeal over some sixty years and, were we starting with a blank sheet of paper, we could be much more efficient in fitting in more stations.  In particular the band has effectively been carved up between the BBC and Ofcom with virtually all stations being allocated frequencies only in the relevant sub-band. An example of the inefficiency of this approach is that BBC Radio 2 transmitters have the frequencies between 88.1 and 90.2 MHz virtually all to themselves, as does BBC Radio 3 between 90.3 and 92.4 MHz, etc.. That’s more than 2 MHz of national bandwidth used to carry each single BBC service. By contrast Classic FM achieves near-national coverage using 2 MHz between 99.9 and 101.9 MHz, but, by careful Radio Authority planning, it shares this sub-band with dozens of other local and regional stations.

Were the BBC national FM channels to be re-planned a large number of lower-powered local transmitters could be interleaved between them, even freeing other frequencies for further national commercial FM services. These might be used for some of the quasi-national “regional” music stations which currently sit on hundreds of separate local frequencies, creating more opportunities.

But who is going to tell Ofcom this is a priority while we are all supposed to be switching to DAB?

What price local radio?

In the north east of England Star Radio has been very critical of TFM merging its programmes with its sister station on Tyneside. The UKRD station has particularly highlighted Bauer’s decision to retain the station name TFM on the southern transmitter – suggesting that this is just an attempt to pull the wool over local listeners eyes (or ears). 

It does seem short-sighted not to have adopted the name Metro Radio for the whole service, getting all the bad publicity on Teesside over and done with in one go. While the playout system easily copes with split identification for the two areas, it would surely be better for the Tyneside-based presenters to be able to actually mention the name of their station in live links. They must now be constantly having to avoid plugging Metro this, or Metro that – hardly the recipe for great local radio and building station relationships with listeners! In the long term this may even prove damaging to Metro’s high profile in its own region.

Of course, if the whole thing from the borders down to North Yorkshire became known as Metro the truth would be plain for all to see. Apart from a few local news items the service would be indistinguishable from the regional licences originally granted to Century (now Real Radio), Galaxy (now Capital FM) which cover exactly the same territory from the same main transmitters. These regionals have always been able to split ad breaks and other recorded items north and south so there is really very little difference. As Real, Capital and Smooth become more like national stations, so Metro has become a regional service.

Critics of the robust Star Radio position have not been slow to point out that Star North East is itself the result of merging smaller licences for THREE different local areas, Darlington, Durham and Northallerton. There is, however, a significant difference in scale and financial viability here. The Northallerton licence has one of the smallest Measured Coverage Areas in England, with a population of just 35,231 adults (15+), while Darlington has just 108,262 and the former Durham FM MCA is 295,628. Allowing for some overlap the three Star Radio north-east licences together total only some 430,000 adults. This compares to 788,467 adults in the TFM MCA alone, a large coverage area served from a single10kW transmitter at the excellent Bilsdale mast in North Yorkshire.  Given their small catchment areas, which did not include any of the north east’s main centres of economic activity, the Star Radio stations were previously losing money and would apparently have been closed after their purchase by UKRD unless this cost saving had gone ahead. There can be no such economic case for closing TFM as a stand-alone operation.

There is a strong argument – advanced credibly by John Myers and others – that the Radio Authority, and then Ofcom, licensed too many commercial stations in small areas that were never going to prove financially viable. On the other hand there are a number of great local commercial stations with populations in the 100,000 to 400,000 range which are providing a valued bespoke service and returning a profit to their owners even in the existing economic climate. It’s all a question of how well the stations are managed and programmed.

I’ve long argued that the only way to run a successful and financially viable radio station in a small market is to take every opportunity to exploit the station’s unique relationship with listeners, organisations and businesses in its own area. It must be skilfully tailored to suit the tastes, interests, history and present-day concerns of its area. The arrival of group-wide programming and identikit features nearly killed the TLRC group of stations in the early 2000s. Without quality programmes and a real relationship with its area a local station has no right to expect listeners to choose it over a national or digital alternative.

Who decided UK local radio wouldn't work any more?

Among radio people in north east England there has been a big fuss recently over Bauer’s decision, nodded through by Ofcom, to combine the programming of Teesside-based TFM with its larger sibling Metro Radio on Tyneside. However this is an inevitable consequence of a number of policy decisions made by the regulator over several years. Essentially, encouraged by the big players in the industry, Ofcom has come to the conclusion that truly local radio is not a viable commercial proposition.

Worse still, Ofcom has decided that local programming, other than in formal news bulletins, is of little consequence or importance. In response to the Digital Economy Act 2010, announcing measures “to protect and promote what listeners want most from local radio” Ofcom cited research which said news is valued more than other content on local commercial radio. As a result the licensing authority decided that stations could request to reduce the number of locally made programme hours if they committed to providing local news bulletins throughout weekday daytime. In other words the local relevance of the other 58 minutes per hour, and ALL programmes outside weekday daytime, were of little importance provided you could insert some recorded local news material at the top of some peak hours. Ofcom announced “The measures will still ensure that local stations stay local – providing the locally focused content listeners want and which is protected by the legislation governing radio – but in a more flexible way.”

At the same time Ofcom said it would permit local FM stations to co-locate and share all of their programming within “approved areas”. It said this would allow local services to merge to form larger, more financially viable stations. These approved areas were more like regions – the whole of Northern Ireland for example – and in the north east of England reflected the entire former Tyne-Tees TV region. As a result, in approving the changes to the TFM licence, Ofcom was able to say: “The proposed changes to co-location and programme sharing are consistent with Ofcom’s statement on commercial radio localness regulation since the licences concerned are all within the same Ofcom approved area.”

In agreeing the format changes for TFM Ofcom went on to make the incredible assertion that: “The request has been agreed under Section106(1A)(a) of the Broadcasting Act 1990 – that the departure would not substantially alter the character of the service.”  Nobody who has ever lived and worked in Teesside or North Yorkshire would ever believe that the character of a radio programme presented from Newcastle would be the same as one presented from Stockton. Ofcom believes that the social, cultural, economic and historic differences between these two large communities can be adequately reflected in a few minutes of local news items in every 24 hours.

Unfortunately the BBC has always held an equally ambivalent attitude towards the value of its own local radio programming. It is only a couple of years since BBC Local Radio appeared to be under threat in the last round of cost-cutting by the Corporation. And while hundreds of community radio services have opened in the past decade or so these are limited in coverage area and funding and have, correctly, a focus different to that of a broadly-based, entertainment-led, commercial operation. As a result, over much of the UK, a large gap is opening in our radio landscape. The originally local services have been allowed to become region-wide while the regional stations have become essentially national brands.

This migration upwards in size happens in most areas of business and human endeavour and is generally seen as a good thing. However as a local bakers shop, car dealership or carpet warehouse grows, goes regional and then national (when a healthy economy permits) other people can launch new local enterprises to fill the space and introduce fresh new ideas, products and services. In radio this is not the case. Ofcom has complete control over who may use the radio spectrum for broadcasting and they have decided that, firstly, there are no more available suitable frequencies in the FM band in most built-up areas and, secondly, that, even when they become available, they should be allocated to either low-power community services or for region-wide stations.

Still the vast majority of listening is on FM and this remains the most efficient and effective way of delivering high-quality local radio. For a local service transmitting via DAB digital radio is like using a very expensive sledgehammer to crack a small nut. While anyone can set up a new audio service via the internet this is an ideal method of delivery for a nation-wide or even worldwide community of interest but lacks the flexibility and efficiency of FM local radio, where millions of radio sets already exist in homes, cars and workplaces.

We are left with an very inefficient use of the VHF broadcast spectrum, with a large number of separate medium-power transmitters now carrying identical programmes nationwide while newcomers are told there is no room in the band for their new ideas.