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'News: Ofcom Proposes Relaxing Media Ownership Rules To Address "Financial Pressures On Local Commercial Radio"' by Grant Goddard

'News: Ofcom Proposes Relaxing Media Ownership Rules To Address "Financial Pressures On Local Commercial Radio"' by Grant Goddard

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Published by Grant Goddard
News story about proposals by UK media regulator Ofcom to relax media ownership laws in order to address "financial pressures on commercial radio" by permitting greater consolidation, written by Grant Goddard in November 2006 for The Radio Magazine.
News story about proposals by UK media regulator Ofcom to relax media ownership laws in order to address "financial pressures on commercial radio" by permitting greater consolidation, written by Grant Goddard in November 2006 for The Radio Magazine.

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Published by: Grant Goddard on Mar 31, 2013
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11/20/2013

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NEWS: OFCOM PROPOSES RELAXING MEDIA OWNERSHIP RULES TO ADDRESS "FINANCIAL PRESSURES ON LOCAL COMMERCIAL RADIO" by GRANT GODDARD

www.grantgoddard.co.uk November 2006

A new report on media ownership published by Ofcom has suggested that the rules could be relaxed to enable further mergers between the industry’s biggest commercial radio groups. Under current rules, a merger between EMAP plc and GCap Media plc would require the disposal of six analogue radio licences, 19 local digital licences and one DAB digital radio multiplex (either London or Kent). Ofcom concluded that this “requirement to divest services could discourage mergers from taking place,” as it believes that “allowing further local consolidation might be one way to address concerns about the financial pressures on local commercial radio.” Ofcom’s report notes that “radio’s importance as a source of local news is also gradually decreasing” despite the regulator’s continued emphasis on licensees’ provision of comprehensive local news services. Ofcom also insists that DAB radio services mean that “more listeners now have access to more radio services provided by different owners,” although it acknowledges that there will be “only one local multiplex in many areas for several years.” Lisa Kerr, head of external affairs at RadioCentre, commented: "It is an important signal from the regulator that ownership rules for radio are relatively more restrictive and complicated, and probably too complicated for the modern converging multimedia world we live in. Commercial radio is competing with other media that has an enormous amount of freedom in terms of ownership and the way they run their companies, and it is restricted by rules put in place when the world was entirely different. There are so many places you can go now for local news and opinion. The market is no longer media specific." One media analyst commented: “This report reads as if it were written by one of the radio companies as an argument for further industry consolidation. Ofcom has not produced one shred of evidence to show that mergers to date have benefited listeners, advertisers or shareholders. Over the last two years, audiences for commercial radio have declined, revenues are down, and radio share values are at rock bottom. Neither Ofcom nor the radio companies have published research to explain why consolidation has produced no benefits for stakeholders.” The UK already has one of the most consolidated commercial radio markets in the developed world, with GCap Media controlling 34% of advertising revenues, 44% of DAB multiplex capacity, and 57% of national digital radio services. Additionally, digital radio is almost entirely vertically integrated, with combinations of the largest radio companies owning the DAB multiplexes, as well as owning the stations that are carried on them.

[First published in 'The Radio Magazine' as 'Ofcom: More Consolidation Might Ease "Financial Pressures"', #763, 22 November 2006]

News: Ofcom Proposes Relaxing Media Ownership Rules To Address "Financial Pressures On Local Commercial Radio" page 2 ©2006 Grant Goddard

Grant Goddard is a media analyst / radio specialist / radio consultant with thirty years of experience in the broadcasting industry, having held senior management and consultancy roles within the commercial media sector in the United Kingdom, Europe and Asia. Details at http://www.grantgoddard.co.uk

News: Ofcom Proposes Relaxing Media Ownership Rules To Address "Financial Pressures On Local Commercial Radio" page 3 ©2006 Grant Goddard

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