RADIO - A REGULATORY NIGHTMARE
The CEO of any major company is charged with delivering the best returns for shareholders, even if those just happen to be family. It’s their job to maximise every opportunity while operating within the rules and when those change, so must you.
The Global decision of the past week is unsurprising. They’ve always been honest about their intentions to run big national brands and in doing so, transformed radio. Let’s not forget that before they arrived, commercial radio was looking rather dull with advertisers turning away in favour of more exciting platforms. Things are very different now. In came new ideas, big investment and brilliant marketing while networking to the max. They believe shiny focused brands are the way forward and they’ve been proven mostly right. There is little sign of audiences being decimated as first feared but perhaps that’s because there was still a level of localness within the mix. That will mostly disappear.
A short history lesson.
Over a decade ago, the industry was in crisis with 80% of stations unprofitable and failing. I explained the how and why of it all in a comprehensive report published in 2009. The summary was that massive changes were essential and I proposed that regional radio went national while local stations were freed from a large number of cumbersome rules and regulations. In return for this, I wanted localness protected, and regulated for. It is their DNA after all and it seems right to me that in return for this gift of a free licence, you had to give something back.
OFCOM pretty much rejected the report but soon after started implementing it. (The bits they liked). The industry turned itself around helped by a new level of freedom but also through investment, big ideas, fresh leadership and smart brands. The industry is now thriving.
This new found belief in the medium gave the larger groups confidence to buy more and with it, quite a bit of debt. That’s their business as it is the business of OFCOM to ignore such matters and remain focused on output. Of course, any good regulator must always be open to persuasion, especially when presented with the facts of a fast changing world, but the release brake has to be used with care. The problem is, I don’t think OFCOM cared enough.
The department overseeing radio became a shadow of its former self, good people left and they said yes, far more than they said no. Observers suspected they never really grasped the importance of localness beyond it probably being a good idea. This may be because none of the decision makers really listen to local commercial radio in the first place or, in the rush to be the all new, progressive, big thinking benevolent regulator, they forgot about their duty to public service. I’m only guessing.
Nevertheless, we ended up where seven hours of local programming together with a local breakfast show was the norm. The medium boomed as advertisers flooded back resulting in record revenues. Knowing this, and that the two largest groups are collectively making over £50 million a year, you wonder how the regulator was convinced of the need for further change. There is certainly no crisis to avert as per a decade ago.
For this, you have to hand it to The Radiocentre for their brilliance in lobbying. It’s funded mostly by Bauer and Global and staffed by good, creative and clever people. It is their job to lobby for change and they’ve been pretty successful at it. I accept that we are faced with world wide challenges from new entrants trying to eat our lunch, however, the regulator is there to think long and hard before agreeing to something major like this, and be seen to be doing so. Sadly, it all seems so easy.
Regulation now comes without any bite whatsoever. The very idea that one news story alone is enough to tick the box of localness is rather insulting. They should just be honest and say to those holding licences; do what you like when you like and for the benefit of having that transmitter, you have to pay X to us each year. Simple, clear and transparent.
There are many who will disagree, after all, where is the evidence that local radio is even wanted? This comment would ignore the value of local radio when delivered by those who really know how to do it well. In my view, you rather believe in it, or you don’t. I do.
What happens now?
The horse has bolted. Some will want to challenge the regulator when licences come up for re-advertisement but I can’t see that happening. OFCOM would look pretty silly hitting reverse now although that won’t stop MPs and council leaders badgering them to do so. Who knows? If you can get momentum going for another Brexit vote, anything is possible.
The door really opens wide for community radio and BBC Local, but that’s another blog entirely.
For the record, I have no problem with regional stations going national, it should have happened years ago. I have no issue with large groups asking for more change, If I was their CEO, I would be doing the same. People who point the finger of blame at Global and Bauer are misguided. Ashley and co will do a fantastic job and climb to even greater heights. That’s not the issue.
What we should be asking is how the hell OFCOM agreed to this in the first place? Make no mistake, the blame lies squarely on their shoulders.
Never have so many been let down by so few.