Ofcom To Reduce Radio Analogue Licences
Fru Hazlitt, chief executive of Virgin Radio, announced today at the Radio Festival that Virgin will be renewing its national analogue licence on “substantially reduced terms”, saying that it was a great day for the digital future.
Virgin, talkSPORT and Classic FM have all applied to Ofcom to have their analogue licences renewed in the coming months (which legislation allows to be for a maximum of four years), with the regulator saying that the revised terms at which the licences are offered reflect the reduced value of analogue licences in an increasingly digital radio environment.
Ofcom said it also considered the growth in digital broadcasting, which has led to a decline in analogue radio listening, and developments in the radio advertising market, which have led to an increase in competition for advertising revenue.
Classic FM could save as much as £2.8 million a year if GCap Media, as is likely, accepts Ofcom’s proposals for the revised licence.
Together the PQR payment (which is levied on revenues attributed to analogue listening) and the cash bid amount (which is a fixed sum) make up the total licence fee payment. Classic FM’s annual licence fee (the cash bid amount) would be cut from £1.1 million to £50,000. In addition, the percentage of qualifying revenue (PQR) paid under the terms of the licence would be reduced by Ofcom from 14% to 6%.
If accepted by GCap, the financial terms are effective from the start of the licence extension period, 1 October 2007, until the revised date of the licence, 30 September 2011. Virgin and talkSPORT’s licences are up for renewal at a later date.
Commenting on the new licence terms, GCap Media chief executive Ralph Bernard said: “The team here at GCap have worked hard making the case for these revised terms and I am pleased with today’s result. I believe that by making these adjustments to our terms, Ofcom has recognised the growth of digital radio and the important role that Classic FM is playing by increasing digital listening to the station.”
Virgin Radio: 020 7434 1215 www.virginradio.co.uk GCap Media: 0207 663 7000 www.gcapmedia.com talkSPORT: 020 7959 7800 www.talksport.co.uk