Submission to

BBC Trust

Service Review of Network Music Radio

(Radio 1, Radio 2, Radio 3, 6 Music, 1Xtra, Asian Network)

November 2014

  Confidential

2  

CONTENTS

Introduction page 3

The Most Creative and Distinctive Output page 3

Serve All Audiences page 7

Innovate Online page 9

Value for Money page 10

Conclusion page 11

  Confidential

3  

INTRODUCTION Global is a media and entertainment company comprising Global Radio, Global TV, Global Publishing (music publishing) and Global Talent (artist management). Our brands include Heart, Capital, Classic FM, Smooth, LBC, Gold, XFM and Capital XTRA broadcasting from 20 broadcast centres across the country to over 23 million listeners every week.

Aside from our award winning talk station LBC, we are known for our music stations. We combine our passion for great music with impartial national and local news, weather, traffic and travel and local information. We compete for listeners with the BBC’s national stations, Radio1, Radio 2 and Radio 3, 6 Music, 1Xtra, other commercial stations and increasingly with online music and entertainment services. As the owners of Capital and Heart, two of the UKs largest commercial radio networks, playing contemporary and chart music, we are well placed to comment on the appeal and programming of Radio 1 and Radio 2. It is these stations that are the furthest from delivering on their remit and most closely emulate commercial stations. Our response to this review focuses on our concerns that far too often the BBC strays into areas where the private sector is already operating and serving consumers. This limits the choices available to listeners and places the BBC in direct competition with the commercial radio sector. They are therefore using public funding to duplicate services that are already available free at the point of use. This does not offer value for money to licence fee payers. We believe BBC Radio services should provide high quality, distinctive content for underserved audiences in line with their public service remits, not mainstream content which duplicates that available on commercial stations. The BBC has a responsibility to broaden choice. Classic FM is submitting a separate response with regards to the increasingly populist approach adopted by Radio 3. THE MOST CREATIVE AND DISTINCTIVE OUTPUT The BBC is neglecting its public service remit and failing to deliver against this strategic objective. What genuinely distinctive, high value public service content there is on the BBC’s most popular music radio stations is broadcast mostly if not entirely in off-peak hours. Peak listening hours are reserved for popular music programmes which compete directly with commercial services. A survey undertaken by BDRC for RadioCentre demonstrated worryingly low levels of awareness of public service output on Radio 1 and Radio 2. This reflects the fact that almost all higher value public service content on Radio 1 and Radio 2 is broadcast off-peak or

  Confidential

4  

overnight when radio listening is at its lowest. Only 6% of listeners associated Radio 1 with documentaries, something its service remit obliges it to produce. Only 14% of Radio 1 listeners could remember any arts or culture shows. Only 13% could remember any comedy shows. The figures are even worse for Radio 2, at 13% for arts and documentaries and 7% for comedy. Radio 1 The remit of Radio 1, set by the BBC Trust, is “to entertain and engage a broad range of young listeners with a distinctive mix of contemporary music and speech. It should reflect the lives and interests of 15–29 year olds but also embrace others who share similar tastes. “It should offer a range of new music, support emerging artists – especially those from the UK – and provide a platform for live music. News, documentaries and advice campaigns should cover areas of relevance to young adults.” If Radio1 were a new publicly funded service it would not be approved for launch because the remit is vague and does not place an emphasis on public service content or serving an audience not effectively reached by commercial radio, teenagers for example. Radio 1's Head of Music George Ergatoudis describes Radio 1’s daytime policy as “carefully introducing a range of the best new music to a huge mainstream audience and this is the reason we make such a difference to an artist’s career”.1

The daytime schedule playlist however is dominated by music in the charts and widely played on commercial radio. New music and specialist music shows are broadcast off peak or during the night. In addition, the weekly schedule does not feature a suitable number of documentaries or campaign-focused programmes as set out in the remit. In the week 17th – 23rd October, there were only 4:30 hours of non-music, of which 2:30 hours were news broadcasts. The one-hour documentary and one-hour phone in show were both broadcast at 21:00. The Radio1 schedule duplicates content already available on commercial radio. It features popular celebrities and events that are widely covered on commercial radio, therefore it is not distinctive or offering listeners a genuine alternative to commercial radio. For example:

§ Radio1 produces a chart show on Sunday afternoons between 4 and 7pm. Commercial radio produces the Big Top 40 Chart show at the same time. Many different commercial operators subscribe to Big Top 40, made by Global. Both the BBC and commercial versions both feature interviews with artists featured in the chart.

1 http://www.recordoftheday.com/news-and-press/radio-1s-head-of-music-george-ergatoudis-responds-to-the-recent-observer-article-detailing-the-radio-1-playlist-meeting

  Confidential

5  

§ Radio1 went backstage at the Brit Awards this year, as did Capital FM. The Brit Awards themselves were televised on ITV. Both Radio1 and Capital interviewed the award winners. The awards reached a very wide audience through commercial television and radio therefore it is a waste of the licence fee for Radio1 to send a crew and presenter backstage to the event.

§ Radio1’s daytime programming carries interviews with the same artists on the same days as commercial radio station, normally coinciding with the release of a new single. The same often happens with film guests and general celebrity interviews. In deed, Global often finds itself competing with Radio1 for access to artists.

The fact that Radio1 is still able to adhere to its service licence despite its lack of distinctiveness or public service content is proof in itself that the service licence needs to include more demanding and more specific requirements and that these need to be closely monitored by the Trust. Radio 2 The remit of Radio 2 is “to be a distinctive, mixed music and speech service, targeted at a broad audience, appealing to all age groups over 35. It should offer entertaining popular music programmes and speech-based content including news, current affairs, documentaries, religion, arts, comedy, readings and social action output.” If Radio 2 were a new publicly funded service this format would again not be approved for launch because this remit is vague and does not place an emphasis on public service content. It emulates much of what is available on commercial stations, therefore limiting audience choice. Its remit to appeal to a ‘broad audience’ is counterproductive for a public service broadcaster because the focus should be on underserved audiences and content not provided elsewhere. As it stands, this remit has allowed the BBC to build the Radio 2 schedule around high profile presenters and guests and popular music shows to chase ratings. ‘Mixed’ music shows and documentaries or high value informative speech are rare and often buried in off-peak hours.

Radio 2 broadcast very little content consistent with the remit to feature ‘documentaries,

religion, arts, comedy, readings and social action output’. Specialist music programmes, documentaries or other unique programmes are broadcast off-peak. 6 Music The Remit states 'Its music should focus on major artists and material which do not receive

  Confidential

6  

much support from other radio stations.' it goes on to say 'It should minimise the number of tracks played in daytime, including new tracks, which are also played on Radio 1, Radio 2 or comparable commercial radio stations in a typical week'. In the week 27th October 2014, the top two tracks on the 6 Music Playlist were songs by Elbow and the Foo Fighters, both of which garner airplay from many other radio stations. The Foo Fighters track also received 19 plays on Radio 1 for this week. This can hardly be described an attempt to minimise duplication.

Musically, there is no public service benefit whatsoever for 6 Music play-listing artists such as Kasabian, Noel Gallagher, the Foo Fighters, Two Door Cinema Club, The Vaccines and Kings of Leon (who all receive regular A list rotation on the station) as these acts are perfectly well served by the commercial sector via Xfm, Absolute, Kerrang! and Planet Rock, not to mention Radio1 and 2. In addition, 6 Music is distorting the commercial marketplace with its dominance over music festivals, which has locked the commercial sector out of a number of major mainstream festivals such as Glastonbury, Latitude and T in the Park. As it the case with Radio 1 & 2, 6 Music is also failing to broadcast documentaries in peak hours. 1Xtra IXtra demonstrates that it is possible for the BBC to deliver a radio station that attracts a younger and diverse audience. The average ages of the station’s 15+ audience has, however, edged up recently and at 28 (in the latest RAJAR survey) is currently outside the station’s target range. We therefore believe it is very important that the Trust acts to ensure that the station continues to deliver against its remit of targeting 15-24 year olds. Ensuring that the programming output of the station remains distinctive is also important. The station broadcasts some 55 hours of specialist content a week, only marginally less than Capital FM which is a mainstream station. Repeats on the station also appear to be increasing. Other recent developments, such as sharing of news bulletins with Radio 1, are also a cause for concern which the Trust should investigate. Recommendations: - The majority of music played on BBC radio should be distinct from commercial radio

during daytime hours - There should be an increase in public service output (arts, culture, documentaries,

  Confidential

7  

comedy and current affairs) during daytime hours including peak - Greater choice should be provided to listeners by scheduling more specialist music

during daytime - BBC Radio should focus its festival coverage on giving a platform to more new artists

and to smaller, regional festivals - There should be greater news and current affairs programming during daytime

SERVE ALL AUDIENCES For many years Radio1 focused on building very large audiences for popular shows that

ignored its remit to serve younger audiences. The median age of Radio1’s listeners is 30 yet despite changes to the presenters line-up it has not made the changes to its broadcast content necessary to attract a younger audience despite this being raised as an issue at the last service review. It was also recommended by the Trust that it should maintain its reach to 15 to 29 year olds. The graph below shows that this isn’t happening.

Source: RAJAR Over the past decade, 15-29 year olds have accounted for a diminishing proportion of Radio 1’s total audience. BBC Management have not yet successfully tacked this issue – there is no evidence that the trend has been reversed since the Trust’s last review in 2009, as shown below.

35%

37%

39%

41%

43%

45%

47%

Radio 1: Reach amongst 15-29 year olds

  Confidential

8  

Source: RAJAR Since the Trust’s last review in 2009, Radio 1 has lost distinctiveness against commercial radio amongst its target audience. According to RAJAR, in 2009 14% of 15-29 year old Radio 1 listeners did not listen to any commercial radio station. By 2014, this had fallen to 9%. Indeed, Radio 1 appears to have a strategy of deliberately and directly targeting commercial radio listeners in its marketing despite being publicly funded. For example Radio1 Xtra bought Google and Twitter search terms for Choice FM and Capital Xtra, both commercial stations playing a similar genre of music to the BBC station. This meant that the BBC paid search engines to ensure that when people searched for our commercial brands Radio1Xtra was the first search result. Although the BBC did stop this when asked it is of concern that the BBC thought it an appropriate thing to do in the first place. It is surely not appropriate that Radio1 should take such an overly commercial approach to attracting audiences. The cross promotion of Radio1 on BBC television and online is using a privileged resource only available due to licence fee funded services in order to entrench a market dominant position. Marketing the Radio 1 and Radio 2 breakfast shows during peak viewing hours on a national television station is designed simply to boost ratings, not to attract an underserved audience. Nor do the adverts promote distinctive programming but the more mainstream parts of the schedule. This is market distortion, as commercial radio does not have access to cross promotion on TV. Cross promotion of BBC radio on BBC TV should be carefully controlled to avoid unnecessary market distortion and should focus exclusively on distinctive, high value public service content. Radio 2 is programmed to have wide appeal and attract a large audience. As we have already explained, high audience numbers are not the right measure of success for BBC stations; they should cater for audiences that are underserved. Its remit says they should serve an

35%

37%

39%

41%

43%

45%

47%

49%

Radio 1: 15-29s as % of total listening

  Confidential

9  

audience over 35 yet the BDRC survey shows that nearly a third of under 35 year olds that it is aimed at them. The hiring of Chris Evans following Terry Wogan clearly demonstrated a desire to attract a younger audience.

Radio 2 employs popular and established television presenters such as Dermot O’Leary, Graham Norton and Zoe Ball who broadcast to audiences of millions on prime time television. They appeal to an age demographic that is well served by commercial radio. There is a 38% crossover of listeners between Radio 1 and 2. This doesn’t point to either service being particularly distinctive. Recommendations: - Radio 1 should be required to further prioritise the lowering of its median age to within

its target age bracket of 15 – 29 - Radio 2 should focus on increasing the average age of its audience and held to account

on doing so. The target age remit should be raised to appealing to over 45’s

INNOVATE ONLINE

The BBC’s mixed record on technology is well documented. BBC investment can have a positive impact on new technology and platforms, for example in the RadioPlayer partnership with commercial radio, but too often it has wasted money developing “me too” products that are already available in the market. The BBC should have a duty to create distinct and original content and service from other media but it also has a duty to be very mindful of its ability to distort the market and crowd out investment from commercial players. The launch by Radio 1 of a video channel has been a particular cause of concern. There is an inherent risk that this can become in effect a new television channel by stealth, launched without a full market impact assessment and with no clear public service remit and with no specific service licence. Radio 1's use of video content online has not been clearly articulated to licence fee payers and Radio 1's service licence does not cover the creation of video content that has no direct connection or benefit back to Radio 1 and UK licence fee payers. In addition, the development of new services under the Radio 1 brand cannot be allowed to distract attention from the need to ensure that the core radio service is focused on delivering distinctive content to its 15-29 target audience This new channel is clearly in danger of interfering with an already crowded commercial market. Close oversight by the Trust will therefore be essential.

  Confidential

10  

Recommendation: - The service licence of Radio 1 should be updated to reflect the increase in its online

activities and set clear boundaries and exact parameters for those activities.

VALUE FOR MONEY

BBC Radio has a duty to provide value for money for the license fee payer. They aren’t delivering this duty and their services cost double the budgets of all 335 licensed commercial stations combined. Public subsidy should be used exclusively to deliver services above and beyond those provided by the market. Public service content such as documentaries and specialist music programmes are of course

more expensive to make than popular music programmes therefore Radio1’s running costs should be higher than many commercial stations in the future. However, the current level of public service content being delivered does not justify the current costs in comparison to its commercial counterparts. If you compare the budgets of Global’s main stations against its BBC equivalents the

difference is stark, especially considering the crossover.

Radio 1 - £40.2m Capital Network (7 stations) - £13.3m

Radio 2 – £47.8m Heart Network (19 stations) - £19.8m

Radio 3 – £40.8m Classic FM - £4.6m

6 Music - £7.9m Xfm Network - £2.1m

Recommendations:

- If BBC Radio stations are to continue to be funded at these levels, there must be a

much higher delivery of public service content at all times but particularly at peak hours.

  Confidential

11  

CONCLUSION Global supports a successful and efficient BBC delivering distinctive and original content of public value. Rather than playing popular music for a mass audience, which is already well served by the commercial sector, they should increase choice and better serve their audiences by primarily broadcasting distinctive and original content not available elsewhere in the market. In summary:

• Radio 1 is not delivering against its stated objective of bringing its audience age down to under 29

• Radio 2's target of having a "broad appeal" to audiences over 35 is much too broad. • Radio 1 and 2 should both be broadcasting more distinctive content during peak

hours • 6 Music is not sufficiently distinctive in daytime and its dominance of mainstream

festivals has a distorting effect on the market To achieve this, the culture at BBC radio stations must be radically changed and remits must be overhauled: they need to be much more specific and rooted in the provision of clearly defined public duties. Managers must be held accountable for running services in line with remits. At present, station managers appear to pay little attention to station remits and as evidenced are not held accountable if they are not implemented.