NEWS: RADIOCENTRE CEO HARRISON ARGUES UK COMMERCIAL RADIO NEEDS "LESS REGULATION, LESS FORMAT RESTRICTION" by GRANT GODDARD

www.grantgoddard.co.uk October 2006

Newly appointed RadioCentre chief executive Andrew Harrison has provoked considerable debate within the commercial radio business in recent weeks, following his comment that over-regulation by Ofcom is holding back the industry. Harrison had told The Financial Times: What we need is for Ofcom to set a liberal environment so licence holders can thrive and make money. That is in the listeners' interests. If stations can't make a success from licences, it is listeners who will lose out. The broad thrust we want is for less regulation, less format restriction and more opportunity to secure long-term revenues." Having last month handed back his companys Stroud licence to Ofcom, William Rogers, UKRD Group Limited chief executive, commented: "There are dozens of small radio licensees in the UK which I believe are at serious risk. For many of them to stay in business, there will have to be a relaxation in the level of regulation, control and restrictions they face. Commercial radio, at any level, cannot operate as the charitable arm of the regulator. With the climate changing so quickly, I only hope that Ofcom appreciates it is lagging far behind market conditions." Kevin Stewart, chief executive of Tindle Radio Limited, said: There needs to be more leeway in interpreting the formats to help stations which are transmitting to areas that just arent big enough and where there is competition. Id like to see more co-location and I get the impression from Ofcom that change is something thats imminent. Shaun Gregory, radio adviser to Australian bank Macquarie, said: A lot of people knock Ofcom, but Im not one of them. For what its worth, I think its doing a great job. Of course, things should change and there should be less regulation, but it has gone out there with open arms inviting people to comment and shape the future of radio, and the industry hasnt been good at listening. I predict that, after consultation, it will allow things like networking and sharing of premises. Fru Hazlitt, chief executive of 'Virgin Radio', commented: The digital landscape is much less regulated, so if one assumes that all radio listening will eventually be digital, then we are moving towards less strict regulation anyway. The debate surrounding Harrisons comments has shifted the media spotlight back on the radio industry. Chrysalis Radio chief executive Phil Riley said: We brought in Andrew to shake things up to re-engage with the advertisers and the regulators. We are in a bit of a revenue slump at the moment, so he has a tough job. Hazlitt commented: Radio as a medium needs to come back into fashion. Andrew Harrison has to put it back in fashion. Selling the medium is critical. Opinions differ as to the main problems facing the industry. Justin Sampson, former head of the Radio Advertising Bureau, said: The key challenges for
News: RadioCentre CEO Harrison Argues UK Commercial Radio Needs "Less Regulation, Less Format Restriction" page 2 2006 Grant Goddard

commercial radio are the BBC and persuading audiences not to desert it in favour of music platforms such as iPods. Both will be achieved by keeping up the calibre of presenters. Mark Middlemass, managing partner at Universal McCann, suggested: Commercial radio has not lost its focus, but there has been an issue with investment in talent. The BBC has an advantage, as it can bring stars across from TV. Commercial radio has to find a way to deal with that. Meanwhile, Andrew Harrison initiated further debate about commercial radios demographic appeal with his comment this week that commercial radio wins on everything from 15 to 44. A recent report by Enders Analysis, examining the latest RAJAR audience data, found that commercial radios appeal amongst 25 to 44 year olds was diminishing alarmingly, particularly with men. Commercial radios share of listening is currently 47% amongst 25-34 year old males and 45% amongst 3544 year old males, down dramatically from 56% and 57% respectively six years ago. The report predicted that, by next year, 15-24 year olds will become the only adult demographic in which commercial radio has a greater share of listening than the BBC. Harrison went on to comment: Where we lose is on the older audiences. For the generations into The Archers, there is no commercial offering to compete for the over-50s. However, we will win overall because younger generations coming through grow up with commercial radio. However, according to Enders Analysis, RAJAR data show that fewer young people are now using commercial radio, with weekly reach amongst 15-24s down from 82% to 76%, amongst 25-34s down from 76% to 69%, and amongst 35-44s down from 75% to 67% over the last six years.

[First published in 'The Radio Magazine' as 'Harrison Comments Provoke Fierce Debate', #757, 11 October 2006]

Grant Goddard is a media analyst / radio specialist / radio consultant with thirty years of experience in the broadcasting industry, having held senior management and consultancy roles within the commercial media sector in the United Kingdom, Europe and Asia. Details at http://www.grantgoddard.co.uk

News: RadioCentre CEO Harrison Argues UK Commercial Radio Needs "Less Regulation, Less Format Restriction" page 3 2006 Grant Goddard