Written evidence submitted by Radiocentre
I write on behalf of the commercial radio industry following the call for input from the Committee to its Broadcasting in Wales inquiry and welcome the opportunity to provide some up-to-date information on our sector in Wales.
Radiocentre is the industry body for commercial radio in the UK, representing over 300 licensed radio stations of all sizes from national brands like Classic FM, Kiss, Heart, LBC and Jazz FM, to small independent stations. Commercial radio reaches 37 million listeners each week with a mix of music, news, travel and local information.
In Wales, commercial stations reach 1.64 million listeners (RAJAR Q2 2022) in each week. The most popular stations are Heart, Capital and Smooth. Other services include Nation Radio and Dragon Radio, as well as Capital Cymru and smaller stations covering specific towns and regions, such as Radio Pembrokeshire and Radio Carmarthenshire.
In terms of listening share, the BBC is stronger in Wales than in the rest of the UK. Commercial radio accounts for 41% of radio listening compared to 56% to BBC in Wales, whereas UK-wide commercial radio accounts for 49% of radio listening compared to 48% to BBC. This acts as a constraint on the ability of commercial radio to reach audiences and grow revenue, with radio advertising revenues per head of population lower in Wales than elsewhere in the UK.
As the Committee will know, commercial radio delivers significant public value to its audiences. The public value of commercial radio is perhaps best encapsulated during times of emergency. At these crucial times, commercial stations are extremely well placed to provide listeners with up-to-the-minute coverage of both local and national emergencies. Major incidents trigger well-rehearsed plans that enable stations to alter programming and get journalists on the ground to provide audiences with trusted, accurate information. This is possible due to the dedication and flexibility of commercial radio news teams based in Wales, delivering a combination of local and national news stories.
Covering breaking news always requires a tailored response. At the start of the pandemic, for example, stations immediately adapted in order to provide both additional and longer news bulletins in order to ensure that listeners were kept informed of the important news updates as lockdowns took place.
Radio listening habits are changing and listening on smart speakers and online platforms now accounts for a significant and fast growing proportion of the audio market. According to official audience listening figures from RAJAR, smart speakers alone now account for an 11% share of time spent listening to UK radio. This is significantly higher than previous forecasts expected and will continue to grow.
This shift in listening habits creates opportunities but also presents significant threats for the UK radio sector, including services in Wales. The choice of content now available to audiences has been significantly enhanced as a result of new radio and audio services, now accessed easily and conveniently using voice commands. However, the growth in radio listening taking place online and on these devices has also led to fragmentation of audiences and even greater competition for vital advertising revenue, presenting radio broadcasters with a significant challenge as they seek to grow while providing a high quality and trusted service.
In addition, the surge in radio listening on smart speakers places online ‘gatekeepers’ (such as Alexa, Google Home and Siri) in an incredibly powerful position. Their growing dominance in this market significantly increases the risk of certain behaviours, which could threaten the future viability of UK radio, including potentially charging broadcasters for access, overlaying their advertising or referring users to the platforms’ own radio-like services (self-preferencing).
Given this change in how audiences listen, the Committee should consider widening the scope of this inquiry in order to include support for Ofcom licenced radio services on connected platforms, such as unfettered access for listeners, guarantees around data and safeguarding broadcaster advertising. Work is currently underway with officials in the Department for Digital, Culture, Media & Sport on how recommendations covering these issues, highlighted within the recent Broadcasting White Paper, can be incorporated at some stage into the forthcoming Media Bill.
In addition, we continue to support the current framework where broadcasting policy for England, Scotland, Wales and Northern Ireland is debated and agreed by the UK parliament, and overseen by Ofcom, with radio broadcasters from across the country having regulatory continuity and a level playing field in which to operate.
Despite these advantages, we understand that calls for broadcasting devolution continue to be made. There is a significant risk with such a radical shift in policy that it would ultimately have a detrimental impact to the commercial radio sector in Wales and listeners in turn. It is clear from public policy positions of those advocating the devolution of broadcasting that additional regulatory burdens are likely to be placed on radio broadcasters in Wales that are not demanded by listeners and likely to be detrimental to the commercially viability of services.
The current centralised approach to broadcasting, which we support, means that the UK is in the best position to address threats and challenges posed by global players in the audio market. For example, the joint industry and UK Government Digital Radio & Audio Review (October 2021) examined many of these issues and work is underway with both the BBC and commercial radio collaborating on the shared threats as we move away from traditional broadcast distribution to unregulated ‘gatekeeping’ online digital platforms. The international nature of these challenges, as well as other matters such as the management of broadcast spectrum, and the speed at which technology develops also underscores the importance of the UK continuing to have a united policy.
18 August 2022