News Feature

By The Drum | Administrator

December 12, 2002 | 10 min read

Being awarded an FM terrestrial radio licence by the Radio Authority has proven to be a licence to print money for many radio groups over the years. Most recently, in Scotland, we have seen the Beat 106 licence sold off to Capital, scooping the consortium that bid for and won the licence some three years ago more than a few million pounds. However, as the Government looks to increase choice for UK radio listeners and the number of stations is set to increase, it goes without saying that listeners will fragment and find alternatives, resulting in stations losing listeners. That could ultimately impact on advertising revenues.

According to analysts, the six known bidders for the upcoming radio licence include Scottish Radio Holdings (not surprisingly), SMG (which will look to launch a regional version of its Virgin Radio station), Guardian Media Group (which is looking to roll its Jazz FM brand out across Glasgow), GO FM, a consortium of local businessmen headed up by Alan Clements of Wark Clements, Emap (which is looking to launch a radio version of its music television station The Hits) and Absolute Radio International, which is bidding under the my-fm identity in partnership with Radio Magnetic, the internet radio station.

So far, two of the contenders, Absolute/Radio Magnetic and Emap, have launched month-long trials of their proposed new services to test the waters amongst listeners in Glasgow. Early next year will see SMG launch a month-long trial for its Virgin Radio brand.

So, what does all this tell us about the radio industry in Scotland? Well, while the level of interest may be down on that of the bid which was eventually won by Beat around four years ago, the fact that Emap, SRH, Absolute Radio International and Guardian Media Group are all seriously pitching head to head for the licence goes to show that radio in Scotland is a very serious business and a medium expected to continue to grow.

But is there actually room amongst the advertising population of Scotland for another radio station?

Lillian Foote, media director of The Guy Robertson Partnership, which is one of the biggest buyers of radio in Scotland for its client Toyota, says: “Well, that’s a difficult question, but I think yes, there is room in Scotland. It really depends on who gets the licence and the audience they’re trying to target.

“In general, the broader demographics are already well catered for and in that respect they’re going to have to try and do something which will give the listeners another choice – it has to be a bit different. At the moment there’s a bit of overlap in the ‘popular’ market, with Beat and Real Radio performing well and eating into Clyde’s original share, so that audience is well catered for.”

Jan Dargue, a director of Mediacom, agrees with Foote that Scotland could sustain another commercial radio station. She says: “There’s been a near monopoly here for the past 30 years, after Clyde was given one of the first ever commercial licences to be awarded. Beat’s come along with a slightly younger proposition and done well and now Real has too, but there’s still room in the market.

“I mean, look at London. Yes, it’s bigger but it has still evolved in the same sort of way and they’ve got 13 different licences offering a range of choice to the listeners.”

Feather Brooksbank’s Lianne Dempster concurs that there is room, but offers a word of warning:

“Absolutely. Scotland can sustain another commercial radio station. It can only go further towards serving our community better and in commercial terms there’s still room for someone to add a bit more choice. The fact that it can be successful has been proven by what Beat managed to achieve and more recently the success of Real Radio. The only thing I would say is that if they’re going for that classic 17- to 44-year-old audience then it’s going to be very difficult for them. It’s a hugely competitive market.”

So, the general consensus is that, despite Radio Clyde’s longstanding dominance, the recent successes of Real Radio, Beat’s emergence as a force to be reckoned with and 96.3Q FM’s determination to have its say in radio in the West of Scotland, is it perhaps time to give the marketplace another shake-up like Beat FM did when it first came online?

Mediacom’s Dargue believes it is.

“We need something different, not something that’s just catering for the 25-44 market or thereabouts. Obviously, it has to be a viable business proposition, you can’t just target one-legged people with yellow hair, using a commercial radio licence.

“But what about something that caters for the over-45 audience, like Saga Radio, something else that has a broad appeal. Or the Asian community in the city; they’re consumers like everyone else. You’d have to consider all the statistics to establish if that was viable or not, but it seems to me like it’d be a good means of targeting a sizeable audience that is often quite difficult to reach using traditional mediums.

Eatwell at Faulds agrees, saying that diversity is still a little lacking in Scottish commercial radio.

“To be honest, I don’t really know exactly what Scotland needs in terms of diversity. I mean Real Radio seems to be doing exceptionally well at the moment and appears to have something for just about all age groups, a factor that seems to be worrying both Beat and Radio Clyde.

“Together I think there are elements that appeal to most demographic groups. The problem we do have is that there’s not enough variety in terms of the style of the stations – the type of music they play and the programme content.

“I mean, personally speaking, I don’t think there’s a commercial radio station out there for me at the moment. Mind you, seeing as I like Neil Diamond, I’m not sure there ever will be. I find that I tend to listen to BBC Radio Scotland these days and they seem to be doing quite well.”

Could the problem be that the majority of commercial radio stations are somewhat akin to tabloid newspapers, their schedules full of popular music and popular chit chat when perhaps a more broadsheet approach to broadcasting could find an audience, with a mix of informed and topical chat with a less populist genre of music?

Eatwell says: “Yes, that’s it. A station that isn’t just chat if it’s talk programmes and not just pop if it’s music. At the moment the major stations all seem to be providing variations of the same theme.”

Dempster agrees: “I would think that a sensible route for a new station to take would be in providing a sort of commercial Radio 2 style; that sort of audience hasn’t really been catered for yet. The more choice the better, more competition would be great for the sector.

“However, at the moment I think the communities of Glasgow and Edinburgh are pretty well covered by the commercial radio scene. It’s just a pity that so many other Scottish communities aren’t.”

So, the question remains: which radio group is the clever money being put on to win the licence and launch another station during the coming year months?

Like all good media buyers, bets are being hedged somewhat.

Foote says: “In that respect I think a station which can offer a niche proposition might be the favourite and I therefore think Jazz (GMG) stands a good chance. The only question is – is there a sustainable audience base for a station of that kind? That could be a problem, but if you look at the other two areas where Jazz is already up and running it seems to be performing quite well.

“And what about Classic FM? Yes it does have a national base but its success has illustrated how well stations with a niche target audience can perform.

“To summarise, yes, there is room, but it has to be different and that’s why Jazz might be the favourite”

However, Dempster at Feather Brooksbank is not sure that the Jazz Fm formula, which has performed so well in London and Manchester, is right for Scotland.

“I just don’t know how Jazz FM is going to fit in. I’m not sure that I can really see that formula working, but that could just be my personal taste.

“There’s a lot of speculation out there right now about who’s in for it and whom they’re going to target. It’s too early to tell which bids are the favourites at the moment, as the first test licence broadcasts are just starting. Once we’ve had a chance to listen to some of these we’ll have a better idea about the different propositions on the table and the different audiences they’ll look to attract. It’s an interesting time.”

Eatwell agrees with Dempster, saying: “Instinctively, I just can’t help thinking that it’s not going to be GMG with Jazz FM. I just don’t see Glasgow and Jazz going together. It’s not like Manchester, for example. I’m just not sure if Jazz music is popular enough to sustain a commercial station.

“The favourites are probably going to be Emap or SMG with Virgin, and in particular Virgin, as they have a play list that’s a little bit different. Virgin focuses on rock and classic rock and at the moment I don’t think that’s being covered by any other radio station.”

The only certainty at the moment is that the possibilities are endless. No, sorry, there is another certainty. Whichever group does get the new licence will be met with formidable opposition from the established stations, as Beat and Real have been over the past four years.

However, with the ongoing advancement of digital radio, the entire UK radio sector is due for a radical shake-up when digital sets become widely available. The general feeling is that that will not happen until car manufacturers and hi-fi system manufacturers begin to include digital receivers in their products. So, come on, Ford and Sony, sort it out.


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