Magazine article Marketing

Raymond Snoddy on Media: GCap Cannot Count on Moral Victory

Magazine article Marketing

Raymond Snoddy on Media: GCap Cannot Count on Moral Victory

Article excerpt

At last we have a decent row to look forward to in the radio sector.

All had seemed alarmingly quiet as Kelvin MacKenzie trousered his pounds 7m gains from the sale of The Wireless Group and wandered off in search of new media mayhem. All there was to contemplate was a bleak vista of falling advertising revenues and collapsing share prices.

Now we have a decent bust-up involving GCap, the biggest commercial radio group, and Ofcom, with more than a hint of internecine radio industry warfare, and a session with m'learned friends to follow.

It all came out of a relatively clear sky at last week's Radio Festival in Edinburgh. GCap chairman Ralph Bernard had a prepared speech to give, but suddenly tore it up and let rip instead.

He had been incensed by the performance of Ofcom chief executive Stephen Carter the previous evening. Carter had discussed the already-known fact that the regulator was consulting on the possibility that one, and possibly two, new national radio multiplexes could be awarded; additional spectrum was being released. In plain English, that could mean up to 20 new national digital stations in existence by the end of next year.

Good news, surely? More choice for the consumer and more business for the commercial radio industry. Not entirely.

Carter was clearly aware of the sensitivities involved, when he noted that more capacity and choice would not necessarily be welcomed by established companies. In the bit that was almost certainly responsible for getting Bernard into the ring raining blows, Carter went on to make himself perfectly clear. In a dilemma between competing industrial interests and additional consumer choice, Ofcom will always side with the consumer.

The GCap chairman did not have to be told twice. He had already established to his satisfaction that Ofcom plans to go ahead with the multiplexes, with a formal decision due as early as September. For Bernard, such a decision would not just be legally questionable but morally wrong.

When no one would invest a penny in digital radio, Bernard, then chief executive of GWR, laid his reputation and a significant part of his company on the line to launch Digital One. He says he did so in the express hope that one day the company would benefit from such a risky investment, because the then-regulator, the Radio Authority, had advertised the multiplex on the basis of it being the only one available. …

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