The radio landscape has changed The commercial radio landscape is entirely driven by private and plc companies. The environment they operate in is competitive, hard and ruthless. So much so that continuing consolidation in more recent times has meant that these stations have changed beyond recognition even since 2004. A change in the nature of individual stations has meant that local programme departments don’t even exist anymore. As a result, any past commitment to localness is well and truly gone. While, they may still have local sales teams, the main source of their business is regional or national.

In fact, I would bet that it would not be too long before local sales teams in commercial radio will also be a thing of the past. It is a known fact that commercial radio, particularly the larger groups are still obsessed with competing nationally and not locally. They aim to do so in both sales and programming. An obsession that is rooted in the early to mid nineties when it appeared that big networks insisted that Radio 1 was the main competitor and nothing else mattered. Commercial Radio today is nothing more than a jukebox on a large scale and the cheapest advertising campaign (1800 to 2400) will cost about 1000. So the idea that any commercial radio station can be financially damaged by community radio is simply a ridiculous and unfair claim. Before you think that you might not be affected by this situation, there are no Community Radio stations that are able to earn more that 50% of their revenue from advertising or sponsorship. Some stations cannot earn any revenue from this source at all, other stations are placed somewhere in between. Not only that you then have to seek funding from elsewhere to make up the shortfall. So the only conclusion you may draw from this is that the restrictions placed on you, the shackles on your ability to make money is to simply to protect the directors and shareholders of commercial radio who have no restrictions at all placed on them to protect you.

The real world If community radio were to take a share of any advertising market, the advertising medium affected most would be the local newspaper. Now, I’m no marketing expert but I know that if I am running a community radio station, I can provide a new advertising medium to local business. Those advertisers would most likely have advertised previously in the local paper rather than on commercial radio… why? They can’t afford Commercial Radio and secondly, Commercial Radio simply doesn’t want to have the local butcher, hairdresser or fitness club on their station because they want to sound ‘bigger’ than that. However, local businesses are vital to the success of any community radio station. So, it is obvious that the community radio advertising revenue stream is completely different to the revenue stream targeted by commercial radio. That being the case, there is a very, very strong argument to get rid of the absurd idea that Commercial Radio needs to be financially protected from Community Radio. They are entirely different businesses in a completely different marketplace. I simply cannot understand how it is morally right to have regulation that plainly protects the revenue streams of both LTD and PLC radio companies whose turnover is measured in millions of pounds. That regulation does so at the expense of the smallest and poorest sector of the industry. Commercial Radio competes in a free market and must succeed entirely on their merits and do quite well in this regard. The degree of their success is a matter for them and should not be an issue for Community Radio in 2011.

Be very clear on one thing, the financial restrictions placed on Community Radio are of no benefit whatsoever to anyone other than the very, very wealthy directors and shareholders of commercial radio companies who remain OFCOM is there to regulate existing and new Community Radio stations, In my view they do so without considering the changing face of the industry overall. However, over the years they seem to have been weak in their resolve to maintain a strong and fair position regarding the regulation of Commercial Radio generally. They resisted initial requests from operators to relax the rules only to give way shortly after. Just look at how local values in commercial radio have disappeared over the years. It would not have happened if OFCOM didn’t allow it to happen. They use the deregulation argument to defend this but at the same time refuse to see the obvious problems within the community radio sector caused by stringent application of unfair financial rules. A Good idea? Perhaps it would be a good idea for community radio licensees to get together and fight their corner properly. A single voice that is loud and persistent is the best way forward. Why should you have to restrict your revenue streams to protect private enterprise? Why should you be put in a position where you cannot develop as a business because of a fear that others may not be able to develop just because you exist? Why, in a free market economy must you comply with rules that are outdated and unfair and designed for the benefit of others and not you? If you read the legislation you will come across this characteristic of Community Radio broadcasting in The Community Radio Order 2004. ‘community radio uses any profit that is produced in the provision of the service wholly and exclusively for securing or improving the future provision of the service or for the delivery of social gain to members of the public or the community that the service is intended to serve’ You do not have to restrict the revenue stream of any community radio station to achieve this. In fact, if you allow the station to earn as much as possible from its inevitably small market place (a restriction in itself) and apply the above provision, community radio stations would have a much bigger impact in the community they serve than they have now by providing much better quality programming and providing resources that could really benefit the community. How can this happen? It happens by having no restrictions on turnover but ensuring any profit made is reinvested into the station. Local Community Radio is local and that is the most important thing. It serves its community in a way that commercial radio does not. The quality of programming needs to be vastly improved though and this needs to be addressed now. This cannot be done if the ridiculous restrictions on how much Community Radio can earn remains in place. It is a possibility only if money is there to reinvest in the first place. Terry Doyle is a radio professional with a skillset to help you make your station a real success. From programming tips, presenter coaching and development to formatting your new station. If you wish to have a chat about radio generally just get in touch.