Radio in Digital Britain
1.1 We welcome the Digital Britain review as an unprecedented opportunity to consider the role of radio in a digital world, and as part of the wider media landscape. In this submission we offer proposals to take forward some of the specific radio issues raised in the Digital Britain Interim Report. We suggest legislative changes that Government should consider
1.1.1 to restructure both the analogue and digital radio landscapes, in order to secure the future of commercial and community radio in the face of increasing financial and competitive pressures,
1.1.2 to encourage the continued growth of the DAB platform; and
1.1.3 to overcome some of the obstacles that might hinder any future digital migration.
1.2 This submission builds on evidence that Ofcom has published previously but also draws on research and analysis that is still in progress .
1.3 Media consumption is changing in Digital Britain, but linear audio still has unique characteristics, and our research suggests that broadcast radio still has a particular role to play.
1.4 At UK-wide and larger local levels, the commercial radio sector complements the BBC's radio services, but also has an important role providing competition, diversity of genres and plurality of voices, given the BBC's share of the radio audience. At smaller local levels, commercial and community radio makes a unique contribution of local content and community benefits not duplicated elsewhere.
1.5 Digital technologies offer consumers greater control, quality and - with very little spectrum available for new analogue radio services - potentially greater choice. DAB has had the largest impact to date in the UK radio market, with considerable takeup and usage, and industry investment in transmission infrastructure.
1.5.1 The Digital Britain Interim Report follows the Digital Radio Working Group in proposing a Government policy that DAB should be the primary distribution platform for UK-wide and large local radio stations, and calls for a migration of listening to DAB over the next decade.
1.5.2 Our analysis suggests that a number of digital platforms offering radio content are likely to develop, and to co-exist in a mixed ecology.
1.5.3 DAB is currently the technology best placed to provide free-to-access universal provision of digital radio services, across the country, via affordable portable and mobile devices. We therefore share Government’s vision of DAB as the primary digital radio platform.
1.5.4 If this is to happen, regulation and legislation will need to change to facilitate the continued growth of the DAB platform. We set out below the changes that we believe need to take place.
1.5.5 But these changes alone will not be sufficient: action by industry stakeholders, both BBC and commercial will also be necessary, notably improvement of coverage and reception, a more consistent offering of high quality content, and greater use of the other consumer benefits DAB can offer in terms of programme guides, text and data services.
1.6 More immediately, the industry faces significant financial pressures, resulting in part from structural and cyclical changes in advertising and in part from the costs of digital transmission.
1.7 Taking these things together, there is an urgent need for Ofcom and Government to address three linked questions:
1.7.1 If DAB is to become the primary distribution platform for UK-wide and large local stations, what regulatory and legislative changes could improve its viability, so that consumers can be offered a wide range of high quality services?
1.7.2 What other steps may be necessary to encourage take-up of the DAB platform, and what will be the role of other stakeholders, such as industry groups and the BBC, in achieving these?
1.7.3 In a world where financial pressures on commercial stations are increasing, but localness is still valued by listeners, what regulatory and legislative changes should be made now to strike an appropriate balance between public interest in localness and financial viability of commercial radio? Such changes will need to help both analogue and digital platforms, now, during and beyond any migration to digital platforms.
1.8 At a UK-wide level we recommend facilitating the creation of new commercial radio stations to create a consumer proposition analogous to that of Freeview: a wide range of popular and niche services, delivered digitally. In particular we suggest Government considers:
1.8.1 Allowing existing analogue regional stations to become UK-wide digital (and quasi-national analogue) stations, in effect by dropping the local programming required from them; and
1.8.2 Allowing existing regional multiplexes to be merged and expanded to create a second, regionalised UK-wide commercial DAB multiplex, that could be a platform for national radio station brands while still selling advertising on a regionalised basis.
1.9 At a local level we suggest there may be a need to amend legislation and regulation to ensure the continuation of a viable tier of commercial services, large enough and sufficiently well resourced to provide local news and other content in every part of the UK. These stations would also be expected to broadcast on DAB and so would be subject to digital migration if it occurs. But we recognise that existing stations in this tier may need greater flexibility in order to have sufficient resources to offer quality local content.
1.9.1 Our ongoing research and analysis suggests that stations will need scale to be viable, but also that universal provision of local commercial radio services is highly desired by consumers. Taken together, we suggest it may be sensible to define a new set of geographic areas for this tier, taking into account local affinities. In due course Ofcom plans to consult on a set of areas for the whole country.
1.9.2 Within areas, we are considering proposing effectively to allow consolidation of these services: including by greater programme sharing and co-location, and local multiplexes being able to combine and extend to increase coverage.
1.9.3 As the main emphasis for these stations should be on localness, music now being available via many types of platforms and services, we plan to consult on the appropriateness of continuing to regulate music formats for all stations.
1.9.4 Stations of sufficient size to be viable on analogue should also be of an appropriate size for carriage on the relevant DAB multiplex/es, and would be of sufficient scale to afford DAB transmission .
1.10 These larger local areas would ensure at least one local station in every part of the UK. At a level below, our analysis so far suggests that the viability of smaller stations will depend on a range of local, particular factors. We therefore do not envisage there would be universal availability of smaller services, but would encourage - through regulatory and other means - the growth of new services, building on the success of community radio.
1.10.1 We suggest there may be merit in allowing stations to choose which model they wish to follow:
- their current commercial model but with greater flexibility to co-locate and share more programming with other stations in their area;
- a merger with other local commercial stations in the area, obtaining carriage on DAB to join the tier of large local stations;
- a non-profit, accountable community model with eligibility for public funding;
- or a more flexible commercial model whereby they propose a different set of commitments to localness (similar to the Key Commitments of community radio stations) which get written into their licence.
1.10.2 This lowest level would not, according to the proposals of the DRWG, migrate to DAB alongside the national and larger local services. Indeed, in the event of spectrum being freed up by migration, awarding more FM licences of this type would be possible.
1.11 This submission sits alongside other work that Ofcom is doing related to radio:
1.11.1 We will consider how our regulation of localness on radio may need to be revised in the light of Digital Britain’s final report and the Myers Review of the rules governing local radio, together with an exploration of the different options we set out above. We are mindful of the urgent pressures faced by the industry, and will move to consult on this area as soon as possible.
1.11.2 We will carry out our statutory review of the cross-media and radio-specific ownership rules.
1.11.3 We are undertaking a major project considering the wider provision of local media. This will consider, among other things, radio’s role in the wider local media landscape and commercial radio’s expansion into multimedia platforms as a way of expanding the provision of local material.
1.11.4 We will also be reviewing the Broadcasting Code this year, to reflect changes in society and in the broadcasting and regulatory environment. Among other areas of research, Ofcom is examining consumer attitudes to commercial references in radio. Ofcom will publish this research, together with a public consultation on the Code Review, in summer 2009.
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