NewsLine End Of Year Round-Up: Radio
January
The radio industry got off to a controversial start in 2004, with the BBC forced to drop drinks giant Coca-Cola as the multi-million pound sponsor of the weekly music charts used by Radio One. The move followed a wave of criticism, and forced the Corporation to find a way out of its two-year deal with the Official UK Chart Company that gave the drinks firm regular plugs during the Radio One chart rundown as well as a credit on BBC One’s Top Of The Pops (see BBC Buckles Under Pressure To End Coke Sponsorship Deal).
Meanwhile, fledgling digital radio station, Oneword, was forced to announce redundancies and a wide-ranging restructure of its operations following the announcement that Hong Kong-based USI Holdings was to sell its 50% stake in the company (see Oneword Restructures As Major Shareholder Pulls Out).
At the other end of the scale, Kelvin MacKenzie’s Wireless Group announced the acquisition of local radio broadcaster, Forever Broadcasting, for £8.1 million, expanding its portfolio of regional stations to include Tower FM in Bolton, Peak FM in Chesterfield and The Wolf in Wolverhampton (see Wireless Group Secures Forever For £8.1 Million).
February
February saw Chrysalis Radio secure a new three year deal to handle all national airtime advertising sales for Guardian Media Group’s portfolio of radio stations, building its portfolio to take on all national sponsorship and promotions activity for GMG Radio’s five Jazz FM, Real Radio and Smooth stations, while continuing its current role of selling national airtime for the group (see Chrysalis Extends Airtime Sales Deal With GMG Radio).
Meanwhile media regulator Ofcom announced the launch of an extension to its radio licences programme, making new FM radio stations available across the UK, in a move that promised to benefit several key cities over the next few years. Amongst the areas suggested for new commercial stations under the initiative were Cornwall, Durham, Belfast, Bristol and Aberdeen (see Ofcom Plans To Roll Out Raft Of New Radio Licences).
March
March saw the beginning of one of the year’s biggest events in radio, with outspoken Wireless Group chief executive Kelvin MacKenzie commencing legal proceedings against RAJAR, claiming damages of more than £66 million, allegedly caused by “flaws” in the audience measurement body’s research (see MacKenzie To Claim £66 Million In Damages From RAJAR). RAJAR later lashed out at the claims, dismissing MacKenzie’s accusations as “ludicrous” (see RAJAR Dismisses Wireless Group Claims As Ludicrous).
The Radio Advertising Bureau was also vocal in March, demanding a reduction in the amount of “wealth warnings” required at the end of financial services advertisements, claiming that they are too awkward, often incomprehensible and can sometimes be longer than the actual airtime adverts themselves (see RAB To Lobby Government Over Wealth Warnings).
March also saw the Commercial Radio Companies Association appoint former Channel 5 chief executive, David Elstein, to take over from Lord Eatwell as its chairman. Eatwell had been credited with many key achievements throughout his four-year chairmanship, including maintaining industry unity despite increasing competition, promoting understanding of the medium and securing several vital legislative gains during the formulation of the Communications Act (see Commercial Radio Body Appoints Elstein As Chairman).
April
Commercial radio group UBC Media had cause for celebration in April, announcing that total revenues had more than doubled year-on-year and were expected to be up by 60%. The group stated that a strong growth in radio advertising thanks to the launch its AA Roadwatch traffic and travel news service for commercial radio (see UBC Media Sees Revenue Boost Of 60%).
Kent Messenger Group also sought success in April, becoming the latest company to subscribe to J-ET, the radio industry’s online trading system. With six stations in Kent and an aim to grow its national business, Kent Messenger Group saw J-ET as key to accelerating that growth (see Kent Messenger Joins Radio Industry’s Trading System).
Elsewhere, Kelvin MacKenzie’s dispute with RAJAR rumbled on throughout the month, with the Wireless Group chairman branding RAJAR chairman, Lord Gordon of Strathblane “totally unfit to be in his current position” (see MacKenzie Brands RAJAR Chairman “Totally Unfit”).
May
The on-going debate surrounding RAJAR’s audience measurement methods was further stoked at the beginning of May, as the ratings body announced that four new contenders had entered the race to provide it with an electronic measurement system. Although RAJAR refused to release the names of those bidding for the contract to supply the meters, all four newcomers were understood to have very different approaches to the issue, including alternatives to the watch and portable people meter methods previously seen (see RAJAR Auditions New Electronic Audio Meters).
Later in the month RAJAR announced a six-month consultation period on the development of its electronic measurement system, seeking the advice of advertisers, media agencies and broadcasters on how it should proceed with the introduction of the new research method (see RAJAR Launches Consultation On Electronic Measurement).
Outside of the continuing controversy over audience measurement, Emap Performance announced that the launch of its Kerrang! Radio station in the West Midlands would be backed with an extensive £1 million cross-media campaign designed to drive listeners to its rock-oriented programming. The campaign included high-profile television and bus-side activity, along with guerrilla marketing, street teams, stunts and PR through local media (see Emap Backs Kerrang Radio With Launch Campaign).
Elsewhere, figures from the RAB revealed a strong performance for commercial radio throughout the first quarter of 2004 with revenues increasing by 7.5% year on year to more than £150 million, as big-brand FMCG advertisers continued to increase their investment in the medium (see Commercial Radio Continues To See Revenue Rise).
June
BBC Radio Five kicked off June with a deal to secure the exclusive broadcast rights for coverage of FA Premier League football matches for the next three seasons. The long-running deal guaranteed that the station could continue its coverage of the league on analogue and digital networks until the end of 2006/2007 season (see Five Live Secures Premier League Coverage Until 2007).
However, Five Live found itself on the receiving end of legal threats surrounding football broadcast rights during June, and was forced to withdraw a promotional trailer claiming it had exclusive broadcast rights for the Euro 2004 tournament. The debacle arose as Kelvin MacKenzie’s rival talkSPORT station took exception to Five Live’s claims, having been granted official commentary rights and broadcast status by UEFA earlier in the year (see talkSPORT Threatens To Sue BBC Over Football Claims).
Meanwhile, rumours circulated that the Scottish Media Group was in the process of sounding out potential buyers for its Virgin radio station, a property which could have been off-loaded for around £130 million. It was understood that several rival radio groups had expressed an interest in Virgin, which SMG acquired four years ago for £225 million. However, industry sources said that bidders were only willing to pay around £80 million for the national station (see Virgin Radio Could Be Sold For £130 Million).
Rival indie-rock music station Xfm was also busy during June, signing as the exclusive radio sponsor of McKenzie Group’s Academy music venues in Brixton, Birmingham, Bristol, Glasgow, Liverpool and Islington. The deal saw the venues agree to carry permanent Xfm branding and promotional merchandise, as well as being used for the station’s many live music sessions (see Xfm Signs As Academy Venue Sponsor For Three Years).
The UK’s electronic radio trading system, J-ET, also expanded during June, launching on schedule in Manchester and Leeds, with Feather Brooksbank in Manchester posting the first campaign brief from a non-London agency. Within minutes the agency had received the requested responses from a number of Manchester sales points (see J-ET Launches On Schedule In Manchester And Leeds).
Continued bickering over RAJAR’s proposed electronic audience measurement system continued towards the end of the month, as Kelvin MacKenzie accused the ratings body of “scaremongering” with estimates that a new system could cost up to £25 million a year to operate (see Cost Of Electronic Measurement Causes Controversy).
July
The Radio Advertising Bureau began July by predicting that commercial radio can achieve a 10% share of display advertising revenue by the end of the decade by exploiting its power as a brand conversation medium. The industry body claimed that the ambitious 10% target is achievable because of the continued growth in radio audiences, better understanding of the medium by creative departments and greater acceptance by major advertisers such as Proctor & Gamble (see RAB Sets Sights On 10% Share Of Display Revenue By 2010).
The issue of analogue radio switch-off was raised in July, as audiences began to migrate to digital technology, with the prospect of switch over raised by the government for the first time. Talk of future plans, similar to those for the digital television switch-over, were aired by Tessa Jowell, secretary of state for department of culture, media and sport in her written introduction to the second annual DAB digital radio report. Jowell said that she would begin reviewing the take-up of digital radio and consider how long it would be appropriate for analogue broadcasts to continue (see Analogue Radio Switch-Off Raised By Jowell).
July also saw the Radio Festival kick off in Birmingham, with the BBC’s director of radio and music, Jenny Abramsky, amongst the keynote speakers. Abramsky defended the Corporation’s radio operations in a presentation to delegates, describing the past year as turbulent, declaring that the Hutton inquiry and its aftermath had “plunged the BBC into crisis” and that the difficulties facing the Corporation were now compounded by impending charter renewal.
Abramsky used her address to hit back at calls from many media commentators for the licence fee to be abolished, stating: “I know that some think the BBC should be funded by another source other than the licence fee, but its independence is its greatest asset. Public service broadcasting puts the viewers and listeners interests first” (see Abramsky Defends BBC Radio Ahead Of Charter Renewal).
Ofcom pledged to relax the rules governing television and radio sponsorship in July, a move which promised broadcasters greater freedom to mix commercial messages into programme breaks and shows (see Ofcom To Relax Broadcast Sponsorship Regulations). Meanwhile, commercial radio was seen to increase its appeal to advertisers with further growth in its delivery of core audiences in the second quarter of 2004, according to Radio Advertising Bureau (see Commercial Radio Increases Appeal To Advertisers).
August
August was a quiet month for the radio industry overall, although Channel 4 managed to inject a flurry of excitement as rumours circulated that it would launch a national, speech-based, digital radio station to compete directly with BBC Radio Four in 2005 (see Channel 4 Plans To Launch National Talk Radio Station). The rumours were later confirmed as UBC Media, the UK’s largest independent radio production company, announced details of a development agreement with Channel 4 to create a radio station from the company’s existing Oneword digital station (see UBC Announces Plans For Radio With Channel 4).
Elsewhere Ofcom put a new FM commercial radio licence for the Kidderminster area of the West Midlands up for grabs in August as part an ongoing initiative to launch up to thirty new stations throughout the UK over the next few years (see Ofcom Advertises New FM Commercial Radio Licence).
September
The Wireless Group enjoyed a strong start to September, announcing that operating profits had grown by 108% to over £1.1 million during the first six months of the year, driven by the ‘storming’ success of its flagship station national speech station talkSPORT (see Wireless Revenues Driven By Success Of talkSPORT).
The Wireless Group also became embroiled in legal action in September, attempting to take the Football Association to task for selling national broadcast rights to FA Cup games exclusively to the BBC, a move which it claims damaged its advertising and sponsorship revenues (see talkSPORT Tackles BBC And FA Over Football Rights).
Meanwhile, media super-regulator Ofcom warned the digital radio industry that it would not be rushed into setting a definite switch-off date for the analogue radio signal, despite wide-spread calls from some of radio’s most influential commercial players (see Ofcom In No Rush To Set Switch-Off Date For Radio).
Elsewhere another of the year’s biggest radio stories was confirmed, as Capital Radio and GWR made their merger talks public, stating their intent to create a single broadcaster worth more than £700 million (see Capital And GWR Confirm £700 Million Merger Talks).
On the same day, media regulator Ofcom announced proposals to deregulate the use of the UK’s radio frequencies, allowing more services to share the airspace and extending the offerings currently available from broadcasters (see Ofcom To Free Radio Spectrum For Multiple Uses), while RAJAR set out a detailed timetable for upgrading its existing diary system to a new, potentially electronic method by 2007 (see RAJAR To Upgrade Audience Measurement System).
October
The digital radio industry looked increasingly optimistic at the beginning of October, with new forecasts from the Digital Radio Development Bureau predicting a massive boom in popularity for DAB digital radio, rising by a staggering 1200% from around one million in British homes to 13 million by 2008 (see Third Of UK Homes To Have Digital Radio By 2008).
RAJAR also continued its plans to upgrade its audience measurement system, carrying out what it claimed were ‘pioneering’ tests of three different audiometers (see RAJAR To Carry Out ‘Pioneering’ Audiometer Tests). Meanwhile, Capital Radio unified the content of its two Choice radio stations in London to present advertisers with a stronger environment and a larger combined audience (see Capital Unifies Choice Frequencies For Combined Output).
An independent review of the BBC’s radio services by the Department for Culture, Media and Sport was also published during October, proposing to make the BBC’s prized archive of radio material available to commercial buyers (see Commercial Rivals To Gain Access To BBC Radio Archive). Meanwhile, Kelvin MacKenzie welcomed the report for other reasons, applauding the recommendation for a regulatory body overseeing the acquisition of sports rights (see MacKenzie Applauds Call For Sports Rights Regulation).
November
The ongoing legal wrangles between RAJAR and The Wireless Group continued throughout November, with the radio ratings body petitioning the High Court to throw out TWG’s lawsuit against alleged “flaws” in its audience research (see RAJAR Moves To Have MacKenzie Law Suit Thrown Out).
Elsewhere there was bad news for the radio industry, new figures from the Internet Advertising Bureau and PriceWaterhouseCoopers claimed that online ad spend would overtake that of radio by Christmas, following a period of sustained growth (see Online Adspend To Overtake Radio By Christmas).
However, conflicting research from the RAB claimed that commercial radio was continuing to perform strongly, with revenue increasing by 6% year on year during the third quarter of 2004 to more than £158.7 million, following heavy investment from telecoms, motor and retail brands (see Big Brand Investment Boosts Commercial Radio Revenue).
December
Digital radio operator Gaydar Radio was in optimistic mood as 2004 drew to a close, announcing a £1.5 million investment programme which will see the company bid for more licences, commission more live programming and launch its own sales division (see Gaydar Radio To Boost Investment By $1.5 Million).
Elsewhere, Ofcom revealed a staggering response to its community radio proposals, with over 190 applications flooding in from groups wishing to operate small-scale broadcasting services (see Ofcom Inundated With Community Radio Requests). The watchdog also announced the first stage of its proposals for the UK radio industry, intended to support greater choice for listeners and less intrusive regulation of the commercial radio sector (see Ofcom Launches First Stage Of Radio Review).
The BBC’s audience and consumer research division hired market research company GfK in December, hoping to enhance existing data on its television and radio programmes with a new online measurement system to gauge viewer and listener responses faster than ever (see BBC Hires GfK To Enhance Audience Measurement). The Corporation also announced the success of a trial which saw BBC Radio content made available for download for the first time. The broadcaster logged more than 70,000 downloads of Radio 4’s In Our Time during November, as tech-savvy listeners welcomed the latest ‘podcasting’ service (see BBC Claims Success For Radio Download Service).
The digital radio industry also had cause for celebration in December, with new predictions by the BBC claiming that sales of DAB digital radios would reach, and exceed, one million units by January 2005, following an anticipated boost from Christmas sales (see DAB Radio Sales Expected To Reach 1 Million By January).
Meanwhile, Kelvin MacKenzie’s Wireless Group rounded off the year with mixed fortunes, celebrating at being awarded the last remaining FM radio licence in Edinburgh with a 24-hour speech radio station dubbed Dunedin FM (see Wireless Group Scoops Edinburgh Radio Licence), but losing its battle against RAJAR as its claims of an abuse of market power were struck out of court (see RAJAR Exonerated As Wireless Court Case Struck Out).
The proposed merger between GWR and Capital Radio was also given the go ahead in December, bringing a close to the year, with news that the Office of Fair Trading will not be referring the two companies’ consolidation to the Competition Commission, instead accepting undertakings to address competition concerns. The move cleared the way for the two companies to form one broadcaster worth an estimated £711 million (see Capital GWR Merger Escapes Competition Inquiry).
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