Commercial radio calls on Ofcom to reject BBC spin-off plans

Radiocentre, the industry body representing commercial radio, is urging Ofcom to reject the BBC’s proposal to launch four spin-off stations on DAB+ and online.

The BBC announced in February that it planned to roll out Radio 1 Dance, Radio 1 Anthems, Radio 3 Unwind and a Radio 2 nostalgia service. It argued that this would “do more for younger and C2DE audiences who currently get less value from the BBC”.

But Radiocentre has argued the spins-offs provide limited value and could even put some commercial services out of business.

In comments submitted to the BBC’s initial consultation in May, the trade body said the proposed stations are not perceived as “distinct” from similar commercial radio offerings by potential listeners; that they could impact commercial radio listening and thus reduce advertising revenue to the industry by £71m per year (equivalent to a 10% decrease); and that the move may force some stations to close, lessening competition.

BBC digital music expansion plans face pushback from commercial radio

Conclusion of public interest process

Under its charter, the BBC must assess whether any change to its remit is “material”, including the launch of such stations.

With Ofcom earlier concluding that new DAB+ stations would be considered material, the BBC was then required by the regulator to conduct a public interest test, to be reviewed by the BBC’s board.

The BBC completed the test this week, with its board concluding that the proposal meets the public interest criteria. It has now submitted the proposal to Ofcom.

In July, the media regulator moved to stop the launch of the Radio 2 spin-off and confirmed that it would be subject to a public interest test, while Radio 1 Anthems, Radio 3 Unwind and the expanded Radio 1 Dance were given the green light to launch on BBC Sounds.

Now the BBC has significantly developed its proposal for the Radio 2 extension in response to feedback from the audio industry. New recommendations include partnering other BBC stations for more local views and content, and supporting the wider industry through commissioning content from homegrown, independent producers.

Following a market analysis, the BBC suggested that Radio 1 Dance, Radio 1 Anthems and Radio 3 Unwind are “unlikely to have a significant impact on fair and effective competition”.

While it conceded the Radio 2 extension “does have the capacity to have an impact on fair and effective competition in relation to closer competitors”, it argued that this is justified by the public value it generates.

Ofcom delays launch of BBC Radio 2 ‘pop nostalgia’ service

Ofcom assessment begins

In its overall findings, the BBC noted strong opposition from the commercial industry, particularly from Radiocentre, News Broadcasting and Boom Radio. However, it has received broad support from “audience groups, the music industry, music rightsholders and the independent production sector”.

The BBC has concluded from its public interest test that the stations will generate “high public value” and fulfil the BBC’s mission. They will improve value for audiences; expand the breadth of music on radio; showcase new and British music; deliver high-quality speech content and relevant news; and support technology innovations in radio.

Ofcom will now begin its own assessment, which is expected to last six months before it ultimately determines whether those stations can be rolled out in their current form.

As part of this process, Ofcom is inviting industry comment on the proposal by 5 December. It added that stakeholders would have an opportunity to comment on its draft findings before a final conclusion is reached.

‘Material impact’ on commercial sector

Radiocentre has argued that the spin-offs provide insufficient public value given their similarities to extant commercial stations and that their launch could harm the commercial radio market.

Matt Payton, Radiocentre’s CEO, stated: “The BBC’s proposals for new spin-off radio stations should be rejected by Ofcom. They are still largely an imitation of existing commercial services and appear to provide little in the way of distinctive content.

“Should the new stations be given a green light, they would clearly have a material impact on advertising revenues and affect the viability of some stations.

“The process so far has consisted mainly of the BBC marking its own homework. We now look forward to working with Ofcom on an independent assessment of these proposed changes, where we will continue to highlight the negative effect on audiences and competition.”

Concurrently, the BBC conducted a public interest test on its plan to extend the broadcasting hours of Radio 5 Sports Extra. Ofcom is also launching a competition assessment into this proposal.

According to the lates Rajar figures for Q3, the BBC bucked a year-long trend by gaining share from commercial radio.

While commercial radio’s weekly reach dipped slightly from Q2, it still showed grew by 2.1% compared with Q3 2023.

Rajar Q3 2024: Top takeaways