Ofcom have been consulting on the Future of Radio for what seems like a million years now. Part of the reason it’s been such a long process is that the environment for the radio industry’s been changing quite a lot. Whether that’s new technology, corporate shenanigans or a weakening advertising market, it all affects the job radio can afford to do. Indeed, according to Ofcom, 40% of smaller local radio stations lose money. Something therefore has to change.
Today, Ofcom issued its new localness guidance to local radio stations – in other words a list of things that they can or cannot do with regards to the local elements of the service they provide to listeners. The main headlines are that most stations will have to broadcast 10 hours of local content between 6am and 7pm and that breakfast time must remain local on weekdays. On the weekends each stations must broadcast at least four hours of local content. For many stations this is quite a change as they currently have commitments for at least 13 hours of local programming on the weekdays and around 8 hours on weekends.
These changes allow lots of flexibility for stations and could mean many more syndicated programmes on the weekends and potentially a big name networked drivetime.
This will no doubt cause a bit of a stir from some listeners, the anorak radio community and especially weekend jocks. Of course if asked the question “would you like your local radio station to be ‘local’ only ten hours a day and four on weekends” the answer would of course be no. Just in the same way as you’d get a ‘no’ if you asked a question “should the local library be closed on Wednesdays” from people whether they use the library or not.
To be honest, i’m a believer in the less regulation the better. The market will determine whether there is value in local content.
There is, however, a strong argument that says this spectrum is a scarce public resource and the trade-off in running a business off it is that you have to do some public good – which includes localness and other bits and pieces enshrined in your format. I do think this was the case, but I think every day that passes shows that ‘scarce public resource’ has less and less value and therefore it is harder to justify large public-service commitments.
The response to this (i’m trying to second guess the comments…) is “well if the stations can’t make money they should hand their licences back and let someone else have a go”. I genuinely believe the market is such that if one operator is losing cash (and can’t find anyone to buy the station) the chances of some white knight re-applying for it slim. I think the fact that no one wanted to buy Diamond FM (the Classic Rock station in Plymouth) with its heavy format commitments off of Macquarie, pre-launch, says a lot. As too will be the number of people who apply for the licence (and can recommend their own format commitments). I’m sure we’ll end up seeing one or two bidders, instead of the five there were first time round. Two years on the radio world is very different and the business enthusiasm for launching stations will have somewhat diminished. Indeed, you only have to look at the relatively poor performance of most new radio launches to see why people are worrying.
So, will we see a wholesale networking of drive and weekends? I don’t know. I think the big question is “what’s the strategy?”. Is it to maximise profits or is it to increase ratings? Now, increasing ratings can generate more profit, but also at the same time you can tolerate lower ratings (and advertising income) if you’ve reduced your costs. I think existing networked shows in evenings are more the latter – they take a time of the day where radio listening (even to an amazing local show) massively drops when compared to daytimes. The difference between the income lost from advertising (to a slightly reduced audience) is much smaller than the cost of funding a local programme.
Whilst there are these synergies in replacing local jocks with networked programming off-peak, doing it at drivetime is a very different proposition with any drops in revenue potentially outweighing any savings you make from staff costs. In addition the cost of acquiring a Scott Mills and associated production team is not going to come cheap. You’ve got to be pretty sure it’s going to put on listeners to choose to go down that route.
I think there is a danger that smaller groups will network drive with someone who is good but not outstanding and they might find their synergy savings disappearing pretty quickly. I think there’s a great example of this with the Touch Radio stations who took average performing stations audience-wise (though probably deeply unprofitable) and replaced it with a new brand, automation and networking and saw their audience fall off a cliff.
So, I think it’s good there’s the flexibility for stations to be able to make the decisions, but they should be aware of doing anything they see as a quick win.
Ooh, and in the picture above (without using the key) can you spot a Radio 1 favourite and another radio/new media blogger…