http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/07/05/cnradio05.xml&menuId=242&sSheet=/money/2006/07/05/ixcity.html UK: Ofcom slashes radio licence fees By Dominic White, Communication Industries Editor
(Filed: 05/07/2006) If proof were needed that commercial radio is undergoing a revolution, Ofcom has just provided it. The communications industry watchdog yesterday slashed the annual licence fees for several analogue radio stations. Classic FM, owned by GCap Media, will now pay the Government just £50,000 for its national analogue licence, down from £1.16m. SMG's Virgin Radio will see its outlay fall tenfold to just £100,000. The cuts reflect the increasing popularity of digital radio; fierce competition from broadband, mobile phones, mp3 players and digital television; and the BBC's growing market share. At the radio industry's biennial jamboree in Cambridge today a panel of industry heavyweights, chaired by the Daily Telegraph's Jeff Randall, will discuss what future commercial radio has - and indeed, whether it has a future at all. On the panel will be GCap chief executive Ralph Bernard, whose company has suffered more than most as the BBC leaves commercial stations trailing and advertisers divert budgets online. "We've been living with the BBC for 30 years here, so we may as well get used to it," he says. "The good news is that commercial stations have a bigger share with 15-44 year olds, which is the principal target market for advertisers. "But nonetheless we have to do more to get listeners listening for longer, and that's one of the opportunities for digital radio, because we've got more spectrum which should mean more listening and more share." On the advertising slump, Virgin Radio's chief executive Fru Hazlitt draws comfort from her experience at her previous employer Yahoo: "I freely admit radio ads are out of fashion but I saw it before in internet advertising. It was in fashion in 1999, then by 2003 was least fashionable thing ever, then when I left it was, unfortunately for me, trendy again." The challenge, she says, is for radio to make itself appealing by exploiting relationships with the music industry. "When advertisers get reminded again that radio is still a very sexy medium for consumers, things will turn. We recently had Chris Martin of Coldplay stand up at Isle of Wight festival and say, 'Thank you to Virgin Radio, the best ****ing radio station in the world.' And we didn't even pay him. It's the kind of brand identification advertisers like Levi's love." Radio is also facing new breeds of competition, from Channel 4, which is entering the market, to national newspapers offering daily podcasts. Patrick Yau, media analyst at Bridgewell Securities, sees podcasting - whereby spoken word news and features are downloaded over the web to be listened to on a computer or digital music player - as a medium-term, rather than an immediate threat to commercial radio. He believes music podcasting will pose a bigger threat, but says royalty issues need to been resolved before it can seriously take off. Technology change is an opportunity for radio, says Ms Hazlitt, whose Virgin station is the UK's most listened-to station on the internet. "People will listen to radio on their mobiles, through their TVs and through the internet. We should be everywhere." That is after all the point about radio. You can listen to it anywhere, while doing something else. Reply with a "Thank you" if you liked this post. _____________________________ MEDIANEWS mailing list medianews@twiar.org To unsubscribe send an email to: [EMAIL PROTECTED]
