Guardian Media Group’s “deep pockets” in Manchester secured it the radio licence to launch RockTalk but the group is not becoming a monopoly in the city, according to one of the unsuccessful bidders.
In February, radio regulator Ofcom awarded an FM licence to Guardian Media Group (GMG) for its proposal to launch RockTalk, a classic radio station that also promises substantial local speech content.
Ofcom said the editorial and commercial resources of parent GMG was one of the factors in awarding the licence to RockTalk, as was its good record to date in meeting revenue targets.
As well as North West radio stations Smooth and Century, GMG also owns the Manchester Evening News, local newspapers and TV station Channel M, leading to claims it was developing a media monopoly in Manchester.
But Clive Dickens, director of Absolute Radio International, whose Jack FM was one of the ten unsuccessful bids for the licence, says: “GMG’s cross-promotional potential and deep pockets in the city won the day. The financial criteria for this licence do include financial strength. But GMG is not a monopoly. “This is not a cottage industry anymore. Consolidation is a fact of life.”
RockTalk will be GMG’s 13th radio licence in the country and follows the group’s recent acquisition of the Saga and Century FM radio operations.
Targeting listeners aged over 35, it’s offering “the sound tracks of our lives from the last five decades – from Led Zeppelin to the Rolling Stones and Thin Lizzy to U2” and has a potential audience of 1.8 million in the Manchester area.
John Myers
GMG’s second rock station, following the launch in January of 96.3 Rock Radio in Scotland, RockTalk won’t be broadcasting until 2008 because, jokes GMG Radio chief executive John Myers, “we have to wait for a bulk order of Harley Davidsons for the staff”.
But Myers insists that a high level of daytime speech will reflect the lives of Manchester people, with a strong commitment to local news, current affairs and interactive debate. Ofcom was persuaded that RockTalk’s combination of, er, rock and talk would extend listener choice even though Manchester’s commercial radio market was overcrowded.
The verdict left another unsuccessful bidder, Phil Riley, Chrysalis Radio’s chief executive, bemused. Riley, who led Chrysalis’s two bids – one for a classic rock station, the other for a talk station – was quoted as saying RockTalk’s format was “bizarre” and doubting whether it would attract listeners. He acknowledged GMG’s resources but said both Chrysalis and EMAP could match them.
Sunrise Radio, with its Masti Radio bid, proposed a contemporary Asian and urban music broadcaster aimed at young Asians aged under 35 and other ethnic groups in Manchester. Sunrise Radio (Yorkshire) claims a market penetration of 78 per cent of Asians in its market.
Sunrise chief executive Usha Parmar is disappointed to lose out to RockTalk because she feels Masti Radio would have met the needs of a “seriously under-served” youth group.“It is also surprising that the licence has been awarded to this particular brand of radio in an area which is already well served by talk radio and that once again it seems the bigger boys have muscled out the competition,” she adds.
By contrast, the blow was softened for Dickens because Absolute Radio - which owned Liverpool’s Juice FM from 2003 to 2005 - has just launched a station in Oxfordshire and won a licence for a second. He acknowledges Jack FM would have represented a risk over the clout of GMG in the Manchester bid.
Dickens maintains that further consolidation is inevitable in the commercial radio market as advertisers are finding more and varied ways of spending budgets that aren’t substantially larger. Internet radio in particular offers customer acquisition data in the form of verifiable click-through numbers that can’t be matched by traditional media – as well as being the flavour of the month among brand managers.
Nevertheless, digital radio has found it hard to get into the car, the bathroom and the kitchen, while the TV market is fragmented and newspapers are under online threat. “I still think the radio industry is in a better position than most. It will be a long time before we wake up and read the internet in the shower.”
Clive Dickens
But commercial radio faces problems of its own making in that expectations of double-digit growth have become the norm, continues Dickens. Without substantial growth in revenue that has meant cost cutting to keep shareholders happy and a lack of investment in content, talent and innovation. Dickens believes quoted commercial radio groups should consider going private and regrouping, as Clear Channel is considering in the US, so as not to be “at the mercy of analysts and the City”. That will give them the space to develop talent and explore new revenue models that aren’t based on the spot advertising that some have called “interruption-based media”.
Dickens likens this latter dilemma to the music industry’s refusal until recently to accept the redundancy of the album, which, with its usual filler tracks, is a “nonsense notion” now downloading is widely available. “Huge chunks” of the market are now gone.
He refuses to divulge his solutions but concludes: “There are models out there but people are stubbornly resisting."
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