Evaluation of applications for the re-advertised local commercial radio licence in the Dumfries & Galloway market of South West Scotland in the UK, written by Grant Goddard in September 2003 for The Radio Authority (and edited substantially by management).

1. RA PAPER 52(03)
4 September 2003
RE-ADVERTISED LOCAL LICENCE AWARD:
DUMFRIES & GALLOWAY
Paper by the Staff
MATTER FOR DECISION
1. Members are asked to decide which of the two applicants should be awarded
the re-advertised local FM licence for the Dumfries & Galloway area, in South-West
Scotland.
STAFF SUMMARY AND RECOMMENDATION
2. The submission documents of the two applicants leave much to be desired in
terms of quality and clarity. The incumbent South West Sound Ltd. has a track record
of impressive audience figures (market leader with a 30% listening share, RAJAR
Q1/03) but is so busy heralding this achievement at every opportunity that the details
of the station's programming philosophy and business strategy are all but obscured in
its re-application. Not only has South West Sound failed to give direct answers to
many of the questions required within the application process, but it has barely
articulated a convincing argument for being re-awarded the licence, save for the
obvious benefit that its ratings are extremely high. The station presently broadcasts
local programmes for eleven hours each weekday, using locally recruited presenters to
provide a mix of contemporary music, local news, what's on information and
community features aimed at 15 to 55 year olds. Essentially, South West Sound is a
daytime local opt-out from its parent Ayr-based stations, West FM and West Sound
AM, both of which it relays at different times of the day. The re-application proposes
that local programming be extended to evenings and weekends in the next licence
period, and that local news bulletins be added during evenings and weekends.
3. D-G-Radio Ltd. has achieved the almost impossible task of submitting an
application that is significantly worse in every aspect than that of South West Sound.
After having failed to win the same licence with its 1995 application, the group has
only managed to incorporate relatively minor improvements into its latest submission.
The essential elements of the proposal remain the same – a speech-dominated, locally-

2. RA PAPER 52(03)
Page 2
focused service managed by a large staff producing "information rich" programming in
the style of the BBC. Not only has D-G-Radio demonstrated no knowledge of the
requisite skills to run a commercial radio business, it has shown little understanding of
how to run any type of business. Incomplete answers, contradictory statements, intra-
group bickering, accusations of financial mismanagement, missing documents – all are
present in the D-G-Radio application, making it almost impossible to assess under the
usual Authority criteria. Much of D-G-Radio's application is merely a criticism of the
existing service provided by South West Sound, though at one point there is a
grudging acknowledgement that "South West Sound plays some nice tunes and
appears to have high listening" (section IV, p.3). Despite having initially nominated
other members of the applicant group to answer staff questions concerning the
programming, audience and finance sections of the application, D-G-Radio founder
Rex Pyke subsequently decided to answer all of staff's questions himself. His
justification for the non-answers he has provided to staff is that "what we are
attempting is such a departure from the current convention, it is hard to deal with some
of your questions." D-G-Radio's publicity paints the group's application as "a David
and Goliath head-to-head, the people of Dumfries & Galloway against the big boys"
(the "big boys" presumably being Scottish Radio Holdings, owners of South West
Sound). However, Pyke is more of a Don Quixote character, throwing down an
imaginary gauntlet in his group's press statements: "The D-G-Radio team seem to have
come up with some innovative ideas that are really going to test the imagination of the
Radio Authority. The Dumfries & Galloway licence is the last one to be granted by the
RA, and the radio industry is watching in expectation to see just how bold the RA is
going to be on this one."
4. The choice to re-award the licence to the incumbent may be preferable,
therefore, if only to avoid the distinct possibility that the competing applicant might
never manage to put a radio station on the air, even were it to be offered the
opportunity. It is obvious that South West Sound must be doing something right –
though that "something" is barely explained in its re-application – to achieve such
impressive audience figures in this relatively rural part of Scotland.
BACKGROUND
Terms of the licence advertisement, and coverage issues
5. This licence utilises three FM frequencies from three transmission sites, and is
designed to provide coverage of the south-western corner of Scotland which stretches
from Dumfries in the east to Stranraer in the west (see attached map). The existing
measured coverage area (MCA) includes an estimated adult (aged 15+) population of
around 85,000. The incumbent, South West Sound, undertakes audience measurement
in association with its 'parent' service, West Sound in Ayrshire, and does not publish
RAJAR figures separately for the Dumfries & Galloway area. However, the station has
submitted these separate data at staff's request (see paragraph 34), thus revealing that
its chosen TSA population is 98k adults (the TSA within which listenership to the two
Ayr services as well as the Dumfries & Galloway service is measured includes a much
larger adult population of 379k). Both applicants propose to maintain the existing
transmission arrangements, yet D-G-Radio believes that these could provide an

3. RA PAPER 52(03)
Page 3
acceptable signal to the entire population of the Dumfries & Galloway Council area
(122k adults). Although a 48 dBuV/m signal (mono reception) would provide wider
coverage than that shown in the attached map, it still would not reach all parts of the
Dumfries & Galloway district.
Area details
6. Dumfries & Galloway is predominantly rural, the third largest Council area
geographically in Scotland at 2,380 square miles, and incorporates hills and moors
inland and 239 miles of coastline indented by estuaries and bays. 60% of the district is
mountainous moorland, with the population mainly resident in the coastal plain and
river valleys. Tourism is becoming increasingly significant with 800k visitors to the
area now recorded each year, but the two most important industries remain agriculture
and forestry. This reliance on traditionally low-paid sectors is reflected in the fact that
average earnings in Dumfries & Galloway are the lowest of any local authority area in
Scotland. The largest town in the district is Dumfries with a population of around 32k,
while Stranraer is the only other town with a population of more than 10k. The M74
Carlisle-Glasgow motorway traverses the eastern part of the area and is connected by
the A75 to the Irish sea ferry port at Stranraer and Cairnryan, which is the second
busiest ferry port in the UK and provides the shortest sea crossing between Scotland
and Northern Ireland.
Existing local media
7. The main competition to South West Sound for local advertising is provided by
local newspapers, of which there are several. The market leader is the twice-weekly
Dumfries & Galloway Standard, published by Lanarkshire-based Scottish & Universal
Newspapers (a part of the Trinity Mirror group). The same company also owns the
weekly Galloway News, which circulates in the central part of the district, and four
freesheets, while main rival Dumfriesshire Newspapers Group publishes four papers
(all weeklies) in Dumfries itself and its surrounds. Another weekly publication, the
Galloway Gazette, is owned by Scottish Radio Holdings, which also of course owns
the current holder of this licence, South West Sound. BBC Radio Scotland provides
four opt-out news bulletins for South-West Scotland each day from its studios in
Glasgow. The only other ILR services which can be heard in (certain parts of) the area
are CFM, the Carlisle service (which, under previous owners, has tried to buy South
West Sound and has applied for its licence - see below) and, in the far west of
Galloway around Stranraer, Downtown Radio's two Belfast-based stations. The local
television service is provided by Carlisle-based Border TV, which was an initial
shareholder in South West Sound.
History of licence
8. This licence started life as an IBA contract for the Dumfries area only, and was
offered in 1989 to South West Sound Ltd. [SWS], a company whose shareholders were
West Sound Radio plc (77%, an independent company which had operated the contract
for neighbouring Ayr since 1981 and also owned four nursing homes and a security
alarms company), Border TV (15%) and Lothian & Borders Co-op Society (7.5%).

4. RA PAPER 52(03)
Page 4
The station launched in May 1990 with four staff, providing seven hours of local
programming each weekday with the remainder of the output being a simulcast of the
West Sound service in Ayr. Despite the name of the company, the service was
identified as West Sound throughout and was predominantly managed from Ayr. In
1992, SWS was part of a consortium called Carlisle Radio Ltd. (CRL) which also
included Border TV and Radio Borders that won the Carlisle ILR licence. However,
within weeks of being awarded the licence, the partners fell out when CRL attempted
to engineer a reverse takeover of SWS. This failed, and SWS withdrew from the
consortium prior to the launch of the Carlisle service (CFM) in April 1993. However,
although its representative resigned from the SWS board, Border retained its 15%
stake in the Dumfries & Galloway licensee. Scottish Radio Holdings [SRH] made its
first attempt to buy the licences held by West Sound plc (i.e. the two for Ayr [FM and
AM] as well as the one for Dumfries & Galloway) in mid-1995, but under the
ownership rules at the time such a transaction would have required a change to West
Sound's AM measured coverage area because of the significant overlap between it and
that of the Glasgow AM licence already owned by SRH. West Sound formally
requested a reduction in coverage area for its AM service to allow the takeover to
proceed, but such a move was rejected by the Authority. The overlap between the
Glasgow and Ayr FM services was not 'significant' and thus SRH suggested that it
could acquire the Ayr FM licence only, together with a minority shareholding in any
residual subsidiary set up to operate the AM licence. However, the Authority was
uncomfortable with this proposal too, as the AM service was highly dependent on its
FM sister station and such an arrangement could have amounted to a 'device' to enable
SRH to acquire the Ayr AM licence as well as the FM one. SRH decided to let matters
rest until after the Dumfries & Galloway licence had been re-advertised and awarded.
9. The licence was first re-advertised in 1995 and attracted three applications
additional to that from incumbent SWS. One of these was from present challenger Rex
Pyke, with the others being submitted by the aforementioned CRL and a Glasgow-
based group called Solway Sound. Pyke's application, DGfm, achieved a score in the
staff marking of less than 40%, and among many significant flaws, was most crucially
undermined by its failure to include any convincing evidence that its identified funding
was in place. CRL provided the strongest challenge to SWS, but ultimately was let
down by its proposal to originate all of its programme output from Carlisle (whereas
SWS proposed to introduce an additional six hours of dedicated Dumfries & Galloway
material at weekends), and by its unwillingness to extend the coverage of the licence
into the hitherto unserved western part of the area (all three other applicants made such
a pledge). The licence was re-awarded to SWS in December 1995, on the condition
that the company implemented its application proposal to extend coverage westwards
by the end of the following year (an additional three frequencies had been made
available by the Authority to this end). Such a development had been facilitated by the
original IBA contract in 1989 but had not been pursued by SWS, probably due to the
fact that the station did not break even until 1994. As promised, two new transmitters
were switched on in late 1996, one serving the area in the far west centred on Stranraer
and the other providing coverage of Newton Stewart and Wigtown in the central part
of the district. By this time, the station had been acquired by SRH as part of its
takeover of West Sound Radio plc. The history of SWS under SRH is discussed in
paragraph 17.

5. RA PAPER 52(03)
Page 5
Local response
10. At the time of the licence re-advertisement, staff wrote to invite views from the
two local MPs, two local MSPs, and the chief executive of Dumfries & Galloway
Council. Most unusually, responses were received from all but one of these prominent
local individuals, and another MSP to whom we had not written also wished to
comment on this licence award. In a letter to the Authority of 20 August, Peter
Duncan, MP (Con., Galloway & Upper Nithsdale), the shadow Scotland Office
minister, said that he did not wish to offer exclusive or preferential support to either
applicant, and expressed surprise that his name had appeared in the DGR application
as a supporter as this had been done without his approval. His letter was copied to
Alex Fergusson, the MSP (Con.) for the same constituency as Duncan, who also was
surprised to see his name in the DGR application and accused the group of using "a
selective quote from an e-mail which I sent them". He added that, like Duncan, he
supported both applicants and would want "to work constructively with whoever was
awarded the licence". This apparent twin misunderstanding was the subject of an
article which appeared in the 17 August edition of Scotland on Sunday. Duncan was
quoted as saying "it is extremely premature of Professor Pyke and his consortium to
quote me as a supporter of his bid, considering I have not yet met him", while
Fergusson reportedly said he simply wished DGR "good luck" and was "angry that
they have chosen to quote me in a public document as a so-called supporter". The
article also made allegations about Pyke's past financial history (see paragraph 39).
11. The other MP with a constituency in the licence area, Russell Brown (Lab.,
Dumfries), wrote to offer his exclusive support to DGR, praising its local roots and its
proposal to broadcast phone-in programmes. At the same time, he expressed the view
that South West Sound had become increasingly oriented towards Ayr, and stated his
concern that he had sometimes heard important local news items from the
Dumfriesshire area reported on CFM (ILR Carlisle) but not on South West Sound. His
counterpart in the Scottish Parliament, Dr. Elaine Murray (Lab.), also wished to
endorse DGR, saying it would be a "genuinely independent local radio station", and
repeated Duncan's criticism that the incumbent is too focused on Ayrshire. She also
claimed that South West Sound is "politically biased, tending to favour press items
generated by MPs and MSPs of one particular political party over those of any other".
DGR has also gained the unequivocal backing of two other MSPs, Chris Ballance
(Green, South of Scotland) and Alasdair Morgan (SNP, South of Scotland). This too
has caused some disquiet, however, with an Ayrshire MP accusing Ballance of
potentially putting local jobs in the county (i.e. the staff of West Sound) at risk by
supporting DGR rather than the incumbent (Ballance is a regional member of the
Scottish Parliament whose constituency encompasses Ayrshire as well as Dumfries &
Galloway). Uniquely among those who corresponded directly with the Authority, the
chief executive of Dumfries & Galloway Council has offered his wholehearted support
to the incumbent. This is not especially surprising given that the Council has an annual
contract with the station (worth £7k) to promote and market its activities, but
nevertheless the chief executive and his colleagues seem very pleased with the service
being provided by South West Sound, particularly its local news service (which is
described as "fair, balanced and professional") and its off-air charity work.

6. RA PAPER 52(03)
Page 6
12. Within the past three weeks, 14 letters regarding this licence have been sent
directly to the Authority by individual members of the public, all of which are in
support of DGR. The main theme running through these letters is that DGR would
provide a more local service than the present incumbent, whose output is variously
described as "unremarkable chart music", "a poor imitation of Radio 1", and "cheap,
tacky and one-dimensional sounding", and in particular would offer greater
opportunities, through phone-in programmes and other speech output, for local people
to become involved and for local issues to be discussed. Two correspondents (who
have the same surname but different addresses) expressed disappointment that West
Sound was not more like Heartland FM, the ILR service for Pitlochry and Aberfeldy.
Assessment of applications
13. Four members of staff have been involved in the assessment of the applications
and the questioning of the groups about their proposals: Grant Goddard (Development
Officer) as 'project officer', together with Janet Lee (Programming), Andy Causby
(Finance) and Terry Dowland (Engineering). Thomas Prag was the 'nominated
Member' for this licence, responsible for liaison with staff. Following the Authority's
agreed procedure when there are fewer than three challenging applicants for a re-
advertised licence, the scoring system has not been employed.
History and composition of applicants
14. D-G-Radio [DGR] founder Rex Pyke says he is "hopeful that lessons have
been learnt from the experiences of the previous licence award" and suggests that the
new application "has some enhancements over our previous application." These
enhancements include a partial list of shareholders, a market research report and
projected audience figures (none of which was included in the 1995 application), but
the overall quality of the application is still very poor. DGR exists because of two
expressed dissatisfactions with existing local radio services. Firstly, BBC Radio
Scotland closed its 90-minute daily Dumfries opt-out (called Radio Solway) in 1993,
which precipitated a local petition of 9000 signatures, to no avail (Radio Scotland now
broadcasts four Dumfries news bulletins per day that total 28 minutes). Secondly,
DGR says that "much of the limited speech content broadcast by South West Sound is
of little interest to the people of Dumfries & Galloway." It argues that, following
SRH's purchase of South West Sound in 1996, "the prospect of a truly local service
disappeared" and was replaced by "an opt-out satellite relaying the Ayr service (and
SRH's overnight service) for the larger part of the day."
15. For its previous application, DGR had recruited a wholly local board and
promised "genuine local programming" that would be "more speech orientated." Two
innovations have been introduced into the current application: an independent radio
programme production unit and the backing of a nascent radio group – Nigel Reeve's
Laser Broadcasting. The independent production proposal seems only to distract the
applicant from its core business of managing a local radio station, and the notion that
programmes about Dumfries & Galloway "will be sold around the UK and the world
and also be broadcast by World Radio Network through sponsorship" is optimistic,

7. RA PAPER 52(03)
Page 7
given the very limited market for independent radio productions. Laser's involvement
has injected 46% of the required financing (£206k in shares) and a more robust
financial plan (though an accidental reference to the "Maidstone" licence in the
application belies the source of the figures). Laser only became involved shortly before
the application was submitted and persuaded Pyke, somewhat reluctantly, to
commission audience research. The application emphasises "Rex's resolve to bring in
outside radio industry expertise whilst maintaining local control," but fails to fully
address the potential pitfalls of such a partnership.
16. Assistance with completing the application was provided by John Brocks
(RadioWorks), who was recommended to Pyke by William Rogers (MD of UKRD).
Pyke approached the local economic development council to fund Brocks' consultancy
fee preparing the group's business plan and market research, but claims that he was
informed by the Authority that such public funding was ultra vires (whereas, in fact,
the Authority's written response in June 2003 was that "a one-off grant from a local
authority to pay for a technical consultant…. does not raise any regulatory issues"). It
was Brocks who, having already started work on the application process, suggested to
Pyke that Laser might pay his fees if the group were invited to take a shareholding in
the station. Confusingly, the group's application states that another consultant, Peter
Salt, "assisted with much of the co-ordination of this application" although, according
to Pyke, only the market research section was co-ordinated by Salt, at the behest of
Brocks. It was Salt who made the initial approach to Laser on the group's behalf, with
the proposal that Laser take a stake and that he could represent Laser's interest on
DGR's board. Reeve agreed to take a shareholding but insisted on taking the board
position himself, leaving Salt without a role in the group. Despite the application's
statement that Salt "will have an ongoing role with DGR particularly in relation to
DGR's independent programme production sales," Pyke says "he is nothing to do with
production – his only role was the market research."
17. South West Sound [SWS] has managed to produce a remarkably insubstantial
and understated re-application, despite assistance with the process from five SRH staff.
The station achieves impressive audience figures and dominates the local media
market, but SWS has made a barely convincing case for its licence to be re-awarded.
Within months of the Authority's licence re-award to SWS in 1995, the station was
sold to SRH (along with neighbouring Ayr station West Sound Radio) for £1.6m
(though SRH itself warrants not a single mention in the "company history" section of
the re-application). According to SWS chairman Hal McGhie, the benefits of SRH
ownership have included investment in additional FM transmitters that have extended
the station's coverage area (although, in fact, as noted in paragraph 9, this was a pre-
SRH promise in the 1995 re-application); the relocation of the studio from a hospital
basement on the edge of Dumfries to a new town-centre location in a shopping
precinct adjacent to the bus terminal; and improved roadshow trailer facilities. No
additional information was provided in the re-application about the company's
development strategy. The station continues to be little more than an opt-out from
SRH's Ayr-based West FM and West Sound AM, and continues to identify itself on-air
as "West Sound" rather than "South West Sound" in its local programming.

8. RA PAPER 52(03)
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Management and staffing
18. D-G-Radio's non-executive chairman is Rex Pyke, visiting professor of film-
making at the University of Glasgow's Crichton Campus, who was the group's founder
in 1995 and has extensive experience in film and TV production, but not radio. The
board's radio industry experience is provided by non-executive directors Nigel Reeve,
whose radio advertising sales career goes back to 1975, and who now fronts Laser
Broadcasting Ltd., and fellow Laser director Nick Jordan. Local directors comprise Liz
Niven, a local writer and former contributor to BBC Radio Solway; Shaun Bythell,
manager of a local used bookshop ("Scotland's largest"), occasional contributor to
BBC Radio Scotland, and contributor to Pyke's films; and Roland Chaplain, a local
consultant meteorologist who has made contributions to BBC Radio Scotland. Staff
feel that the proposed board is more creatively minded than business-based, with little
local business experience. Asked about this lack of commercial experience, Pyke
retorted: "We don't have the sort of business expertise that most people have in radio,
which appears to be buying and selling radio stations, but our business is actually
running business." The application promises that "several further key local directors
will be appointed" at a later date, drawn from holders of the £244k of shares in the
company (46% of total shares) that have yet to be allocated locally. Pressed to name
possible future directors, Pyke offered Sir Neil McIntosh (former chief executive of
Strathclyde Council), Andy Goldworthy (local sculptor), and Professor Rex Taylor
(director of the Crichton Campus) with whom he has already spoken.
19. The staffing plan, comprising 11 full-time staff and six freelancers (earning an
average £28 per week), is large for a station of this size and has not been fully thought
through. The applicant explains: "we have listened to our radio partner and advisors in
regard to advertising for the best possible candidates currently working in the
commercial radio industry." In follow-up questions, Pyke said that DGR "have
intentionally not approached any possible programme controllers or senior journalists"
to join the group since "we should be able to find the people we want within weeks of
being awarded the licence." Pyke's assertions that "DGR will be staffed 24 hours a
day" using "work methods based on successes like the St Luke's Agency [an
employee-owned London advertising agency which encourages flexible working
patterns] and Ryanair [the low-cost airline]" prove merely baffling. Asked if the group
has someone in mind for the managing director post, Pyke replied cryptically that
"there is someone very near to home who wants to do the sort of radio that we are
doing, as opposed to the radio she is doing at the moment."
20. Local businessman Hal McGhie was appointed as non-executive chairman of
South West Sound in 1993, following the resignations of founding chairman the Earl
of Dalkeith (subsequent to his appointment as an ITC Member) and his successor
James Graham (of former shareholder Border TV). Managing director Sheena
Borthwick and company secretary Pamela Hay are both shared with SRH's Ayr
stations, where they hold the same responsibilities. Station manager Fiona Blackwood
joined the board in 1997 and has worked at the station since 1993. Since the group's
last application in 1995, two successive managing directors have left the board (one
before and one after the SRH buyout), as has the former finance director (appointed
before the buyout). The group says it will add programme controller Alan Toomey to

9. RA PAPER 52(03)
Page 9
the board "within the next eighteen months." Asked about the effects of the SRH
buyout on the board, McGhie said that it made the station "financially sound" because
"prior to that, West Sound had been a marginal operation…. When SRH came in, they
put in some broadcasting expertise so that we had a lot more contacts, more back-up if
anything happened…. I haven't found any disadvantages."
21. SWS presently employs four full-time staff (the same complement as when the
station launched) – a station director, news editor, sales executive and receptionist –
and four freelance presenters. The remaining functions – programming, finance, traffic
and community action – are all shared with SRH's Ayr operation and charged through
an inter-company management fee. The re-application proposes a fifth freelance
presenter to cover the proposed additional hours of local programming. Not included
in the local staff complement is managing director Sheena Borthwick, whose cost is
shared between three SRH stations and charged in the management fee.
Programming
22. The salient quantifiable aspects of the two applicants' programming proposals
are as follows:
South West Sound D-G-Radio
Primary target audience (age) 15-55 15-54
Speech as % of daytime output:
Weekdays 35* 35-50
Weekends 20-35* 30-45
Local news bulletins/headlines:
Weekdays 0600-0000 0600-1800
Weekends 24hrs 0700-1300
Automated hours (per week) none 12
[* figures estimated by staff, based on programme schedules provided]
23. There appear to be significant differences between the programming proposals
set out in D-G-Radio's application and Pyke's own views on the group's intended
programming. Responding to staff questions, Pyke explained that consultant John
Brocks had authored the programming section and had delivered the results to the
group only the day before the Authority's application deadline. According to Pyke, "a
lot of the programme ideas, or re-worked non-ideas, were introduced into the schedule
to make the 'company saleable.' Well, we don't want to sell the company. We want to
make the programmes that our community wants to listen to." Asked about the
inclusion of two syndicated shows in the schedule, Pyke protested that these shows
"are the inventions of John Brocks at RadioWorks" and that "DGR has never discussed
the supplying of programming from RadioWorks." Pyke said that Brocks "was re-
working [programming] he had done in other proposals," and that the programme

10. RA PAPER 52(03)
Page 10
names "were invented by Brocks to make them punchy and trendy." Asked about the
nightly six-hour 'No Nonsense' show described in the proposed programme schedule,
Pyke said he "did not realise that it was six hours…. I don't know what it is." These
and other contradictions between the written application and Pyke's subsequent
answers to staff questions make it difficult to evaluate DGR's programming proposals.
24. The insubstantial content of South West Sound's application makes it difficult
to determine precisely which programming is proposed as "new" for the next licence
period, and which programming SWS already broadcasts. Staff follow-up questions
elicited rather more useful information. Locally-originated programming is presently
broadcast only on weekdays 0700-1800 (though this is not stated explicitly in the re-
application). The rest of the time, programming is relayed from West FM, West Sound
AM and, overnight, from SRH's Scottish National Night Network produced at Radio
Clyde. SWS's existing Format requires its programming to be "a mix of current chart
music, recurrents, gold and easy listening, spiced with Scottish when appropriate" and
current chart tracks must never exceed 40% of output. While the station satisfies these
requirements in its locally-orientated weekday daytime shows, the evening shows it
relays from West FM are dominated by current chart music (hardly surprising, as that
station's Format requires "up to 80% current chart hits"). This creates a significant
dissonance between SWS' locally-orientated, less contemporary daytime output and
the music-intensive, chart-dominated programming relayed during evenings.
25. The unsuitability of the music in the evening shows is compounded by the lack
of a clear station identity whenever SWS relays Ayr-originated output. Between 0600
and 0700 on weekdays, the station relays the breakfast show from West Sound AM,
complete with "West AM" and "1035 AM" IDs. Once programming from the
Dumfries studio ends at 1800, the station relays West FM from Ayr, including "West
FM" and "96.7" jingles (the 96.7 frequency is not used within the Dumfries &
Galloway TSA). The re-application states that, during those hours that it relays Ayr
services, "SWS will and does enjoy its own local advertising commercial breaks,
planned at three breaks per hour, with station promotional branding thus blending
seamlessly into programming." Asked about the gap between this statement and the
on-air reality, station manager Fiona Blackwood explained "that's a mistake, that
should not be happening. It's presenter error. There are jingles there [at Ayr] primarily
to be simulcast so that when they press the button, the South West Sound jingles come
out for Dumfries & Galloway and the West FM jingles are broadcast throughout
Ayrshire. That is something that we are addressing and something that I am constantly
on the phone and e-mailing up the road [to Ayr] and saying 'not again, please.' I know
it does rub people up the wrong way."
26. The station's existing Format also requires SWS to broadcast three hours of
local programming on both Saturday and Sunday. Blackwood told staff that SWS does
originate occasional local programming at weekends "where possible" during special
events such as the Scottish Rally (in June) and the Dumfries & Lockerbie Agricultural
Show (in August), as well as providing live inserts from roadshow events during the
summer months. Chairman Hal McGhie replied that "normally it's all relayed [from
Ayr] at the weekend." Staff have thus identified two apparent breaches of the station's
Format - too much chart music in the evening and only occasional local programming

11. RA PAPER 52(03)
Page 11
at weekends. These will be investigated separately by staff, but should not be
considered by Members in the context of this licence award as they do not form part of
the station's proposals for the new licence period.
27. Indeed, these deficiencies would be partially remedied in the programming
plans which the station intends to implement if re-awarded the licence. While its
format would remain "broadbased, covering the music and speech tastes of all age and
socio-demographic groups between 15-55 years target group [sic]," the station plans
to:
 start the locally produced breakfast show at 0600 rather than 0700;
 introduce local programming (with 30% speech content) on weekday evenings
1800-2200 with the employment of an additional freelance presenter;
 introduce locally-originated programming (with 35% speech content) on Saturday
and Sunday 1000-1400, though this will be simulcast by West FM in Ayr;
 increase its weekday daytime speech quota from 20% to 35%.
The net effect of these changes would be to increase genuinely local programming
from 55 to 80 hours per week, and to add a further eight hours of locally-produced, but
regionally-orientated, output. The changes would also make weekday evening
programming considerably more speech-orientated and less chart-dominated.
Speech content and news output
28. D-G-Radio's application states boldly that "whereas West Sound has previously
offered a 'McDonalds' style, DGR will have the style of a small bistro with a
constantly changing menu based on local produce." But DGR has seriously
underestimated the resources necessary for a small commercial station to produce
programming with an average 40% speech content during its daytime output. The
comparison the applicant makes between its own plans and the success of speech
service BBC Five Live is bizarre, given the size of the Corporation and its London
base. In response to staff questions, Pyke acknowledged "the ambitious amount of
speech" but said that the group was "guided by the BBC's mantra 'Inform, Educate and
Entertain'." The application states that "the feel and style of the service will largely be
defined by the speech content" of the station, and "every link will contain at least a
nugget of information presented in an interesting and entertaining way." But it proves
difficult to imagine how the proposed 35-50% speech content could be executed
during daytime when DGR promises "we won't play two or more records back to
back" and "we don't expect to have large blocks of wall to wall speech." With such a
substantial commitment to speech content, it is also difficult to see how DGR could
continuously achieve its aim "to avoid inane links, irrelevant comment, top twenty
style presentation, or forced (and unfunny) jokes."
29. The proposed overnight sustaining service (0000-0600) from World Radio
Network would seem to have little relevance to listeners in Dumfries & Galloway,
since the schedule consists of re-broadcast programmes of Radio Australia, Radio
Sweden, CBC Canada, Public Radio International (USA), Radio Poland, Radio Prague
and Radio China. Ethnic minorities make up less than 1% of the population within
Dumfries & Galloway (even in London, multi-ethnic Spectrum Radio achieves only a
0.1% share of listening). Pyke argued to staff that World Radio Network programming

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is relevant "because a lot of it is really small town – it's Alaska or it's the Vatican." At
weekends, despite the application stating that "all DGR's programmes will originate
from our studios," Pyke stated in follow-up questions that the group is "considering
getting some programming from our neighbours West Sound in Ayr, Borders FM in
Selkirk and/or CFM in Carlisle," all of which are owned by SRH, as is the incumbent.
Pyke's admission that "the proposal has not yet been discussed with any of them" only
underlines his naivete in proposing that DGR would broadcast programming made by
the competing applicant, which he referred to as "an amicable thing to do with our
neighbours."
30. South West Sound presently employs one local news editor who compiles and
reads local bulletins on weekdays from 0700 to 0900. The rest of the day, the editor
sends local stories to the West FM studio in Ayr, to be incorporated into that station's
bulletins, which SWS relays from 0900 to 1900, and at 2200. This is also a Format
breach and will be considered by staff alongside those highlighted above (see
paragraph 26). A local business news bulletin is inserted from Dumfries at 1710 on
weekdays. The re-application proposes a considerably enhanced local news service
with specifically local bulletins of mainly two-minute duration broadcast hourly (apart
from 2100) between 0600 and 2300 "solely provided by our local news editor." The
document failed to specify whether this schedule would also apply to weekends, but
staff ascertained from follow-up questioning that local news bulletins of one or two
minutes duration would be broadcast throughout both Saturday and Sunday. Asked
how one person could manage such a Herculean task, station manager Fiona
Blackwood explained that: "What we are working on is to get help for our news editor,
so that through the drivetime we could have local news bulletins broadcast from the
Dumfries studio, as well as the business news." It remains unclear to staff how the
proposed enhanced news service would be staffed.
31. Additional daytime speech content would include sixteen features that SWS
considers essential to its programming. Half of these are short daily inserts, and the
remainder are longer features, such as 'Legal Matters,' 'Entertainment Incorporated' and
'Policing The Region,' of up to one hour's duration that would be broadcast fortnightly
or monthly. Staff presume that these features would be the reason for the proposed
substantial increase in daytime speech content, though the proposals are confused both
by the applicant's statement that it "feels we have the mix of music and speech just
right" and by its failure properly to respond to the question in the application regarding
the proposed balance between music and speech. Local speech-based documentaries,
such as the 'Sinking of the Princess Victoria Ferry' programme mentioned in the re-
application, are produced approximately every 18 months, when resources allow.
Music output
32. D-G-Radio says that its daytime music policy will concentrate on CHR, classic
and modern soul and adult contemporary genres, whilst avoiding "pure disposable pop
and novelty records as well as many extremes of musical endeavour." The station "will
be quite likely to play the occasional piece of Scottish music, particularly around our
Scottish language feature on a Sunday evening" but has no plans to include specific
Scottish music within its playlist of 3000 songs from the past four decades. South

13. RA PAPER 52(03)
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West Sound says that it has "no intention to alter the character of its service" and will
continue its policy of "classic hits mixed with adult-appeal current hits, complemented
by non-daytime specialist music programmes." The latter comprise a three-hour
Saturday night Ceilidh and a three-hour Sunday night religious music show, both of
which the station currently broadcasts but which would now be included in its Format.
Audience research and findings
33. D-G-Radio's application states that "Pyke had not anticipated carrying out
research as he felt that the hundreds of letters of support he had received said it all."
Pyke admitted to staff that he was "not too keen on doing" market research because "it
seemed a very expensive thing to do" and he "knew what all the outcomes were going
to be just by living here and talking to people." 130 street interviews were conducted
during June 2003 in Dumfries shopping areas, but quotas were not applied to the
sample to ensure that it was representative of the local population (63% of respondents
were female, 40% were aged 16-24). The youth bias renders the survey's most notable
conclusions (for example, in choosing a radio station, music is the main reason while
local features are of no importance) meaningless and provides no empirical evidence to
support the applicant's proposal for a locally-orientated talk-dominated station. In
response to staff questions, Pyke clutched at straws when claiming to have "super-
sampled the younger audience in this small survey to emphasise the point that even
young people in Dumfries & Galloway want something that has greater quality and
local content." More sensible answers might have been provided by Peter Salt, who
commissioned the market research for the group, and who was originally nominated to
answer staff's follow-up questions but, according to Pyke, "he then said he would
prefer not to do it."
34. Despite its impressive audience figures, South West Sound included in its re-
application almost no analysis of its existing listenership or how its audience has
changed over the period of the station's current licence. Only persistent staff
questioning secured the release of RAJAR data back to 2000 for the SWS service
alone (the published RAJAR data incorporates SWS and the two Ayr services into a
single "West Sound" figure). Asked for earlier data, SWS managing director Sheena
Borthwick explained that "the system does not hold information for any radio group
further back than Q2 2000." The figures reveal that SWS is the clear market leader
within its TSA of 98k, consistently achieving a listening share of between 30 and 40%,
a weekly reach of more than 50%, and a weekly listening average of 13 hours. Its
closest competitors are BBC Radio 2, whose audience in Dumfries & Galloway has
grown in line with national trends, and BBC Radio 1. SWS has considerable appeal
across the different demographics, achieving impressive listening shares of more than
20% across all age groups and both sexes. The only other Scottish station audible
within the TSA is BBC Radio Scotland whose listening share is half that of SWS (15%
in Q1/03).
35. SWS also submitted the results of qualitative research to support its argument
that the station is satisfying the needs of local listeners. Three focus groups were
organised in Dumfries by Dipsticks Research, comprising men and women aged 25 to
54, though respondents were pre-screened to ensure that all were "daily radio listeners,

14. RA PAPER 52(03)
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listening to South West Sound FM most often" which must have skewed the sample
considerably. Predictably, the results paint the station in positively glowing terms,
though there are a few interesting findings:
 The scheduling of the weekly dance music show and the Ceilidh show both
coincide with similar shows on competing stations (Pete Tong on BBC Radio 1 and
'Take The Floor' on BBC Radio Scotland). Asked if remedial action would be
taken, managing director Sheena Borthwick explained that because "we out-
perform the BBC at these specific times and also, taking into account the possible
impact on other programmes should we decide on a [schedule] move, we have
concluded for the time being to leave the programmes where they are."
 While older respondents (aged 35+) felt that SWS presenters were "good at their
job," younger respondents (25-34) perceived many daytime presenters as "bland"
and "lacklustre." Borthwick responded that the station "does not consider these
opinions to be weaknesses, rather the opposite, it shows that the audience care and,
no matter their age or social economic groupings, are entitled to an opinion."
 Respondents suggested the station play more Scottish music and more requests.
The station said it will implement both suggestions next year.
 Respondents suggested that sometimes "elements of the news can become a little
parochial." Borthwick responded that "the phrase 'parochial and proud of it' springs
to mind along with a smile and as a consequence SWS do not plan any changes
based on this comment."
Audience forecasts
36. D-G-Radio's over-estimated TSA (see paragraph 5) substantially impacts upon
not only its projected audience figures (50% reach and 10.0 hours in year one) but also
upon the viability of its business plan. DGR predicts that, as a result of its proposed
launch, BBC Radio 1's "unusually high popularity will undoubtedly suffer casualties
both in terms of reach and more demonstrably in hours listened," without the group
realising that the high level of listening its market research ascribed to Radio 1 (38%
of respondents) is due largely to the youth bias in its sample. [Most recent RAJAR
data for SWS credits Radio 1 with 28% weekly reach.] Asked why DGR had not tested
its proposed speech-orientated format through RSL broadcasts, Pyke said: "we would
just be putting an Elastoplast on the wound. What we really want is something that
people can turn to all the time to know what's going on and give an identity to our
community, as opposed to doing something for a couple of weeks or a month, and then
abandoning it." South West Sound provided no audience forecasts for the new licence
period.
Local support and involvement
37. There is little evidence in support of D-G-Radio's claim to have received
"hundreds of letters" except for 65 pro forma responses from the group's web site, half
of which are simply enquiries about work opportunities at the station, and the other
half which comprise a pre-prepared sentence of support for the group's application.
Staff questioned the stated number of support letters but received no response. The
most significant support letter is from Chris Ballance MSP (Green, South of Scotland)
who criticised incumbent South West Sound as "no more than a very part-time

15. RA PAPER 52(03)
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operation bolted-on to its parent company" that has "little local basis" and offers "scant
coverage" of Dumfries & Galloway. Ballance praised Pyke's "good track record of
efficient budgeting and delivery," although it should be noted that Ballance teaches
creative writing for film in the same university department at which Pyke is a visiting
professor, and Pyke has made a presentation video about bookshops in Wigtown, one
of which is owned by Ballance. Other noteworthy persons who have offered explicit
support to the applicant include Lord Puttnam, Sir Neil McIntosh and Alasdair Morgan
MSP (SNP, South of Scotland). There is also no evidence that DGR has organised
local meetings with the public, or has mounted any concerted local campaign to
engender support during the period since the group's last unsuccessful licence
application in 1995. Pyke claims that DGR has distributed 500 flyers from a stall in
Dumfries Town Square, has attended agricultural shows, and "ten to fifteen supporters
are continually meeting people, listening as well as evangelising."
38. South West Sound similarly held no public meetings in connection with its re-
application because of, according to Borthwick, the station's "consistently high
RAJAR results." However, letters of support were sent to the station by, among others,
the Chief Constable of Strathclyde Police, the Chief Executive of Dumfries &
Galloway Council, Dumfries & Galloway Fire Brigade, Sir John Orr (chairman of the
station's Cash For Kids charity) and (former station chairman) the Earl of Dalkeith. To
maintain contact with listeners, SWS organises regular roadshows within its TSA
(mainly during the summer months). According to station manager Fiona Blackwood,
the Cash For Kids charity "has taken off beyond belief" with listeners appreciating that
"every single penny raised stays within our region."
Financial proposals
39. Rex Pyke argues that the D-G-Radio concept is "visionary, adventurous and
needed" (section IV, p.1) while at the same time being "vehemently commercial"
(section IV, p.2). However, despite being largely assembled by a company with some
radio experience, 46% investor Laser Broadcasting (hence the erroneous reference to
Maidstone on p.5 of section IV), the group's financial proposals are greatly flawed and
give staff no confidence that it would be capable of successfully operating a local radio
service. The revenue forecasts are implausible, the much-vaunted independent
production aspect of the application is ill-considered, the proposed cost-base is greatly
over-inflated and, most significantly, as was the case with Pyke's application for this
licence the first time it was re-advertised, no written evidence has been provided to
confirm that all of the proposed funding is available. 46% of the shares (which equate
to 54% of the total share capital, or £244k, as a result of the shares being issued at
three different prices) have been set aside for as yet unidentified local investors, yet the
only evidence seen by staff that Pyke could meet his stated commitment to underwrite
this entire sum is a faxed letter from an estate agent which values farmland owned by
Pyke at "less than £50k" and a statement made by him in response to follow-up
questioning that what would appear to be his home is now on the market with an initial
sale price of $650k (around £415k). This is clearly insufficient, and in both cases
unverifiable. Members may also wish to note that Pyke was reportedly the subject of
no fewer than eight sequestration orders between 1995 and 2000, for sums owed to the
Inland Revenue, Royal Bank of Scotland and others, although all were subsequently

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dismissed on payment. Perhaps most confusingly, when asked during his telephone
interview with staff to identify some of the likely local investors, Pyke responded "if
nobody in the region wants to buy shares in it, then SRH will probably want to". The
other main investor in DGR, Laser Broadcasting, was established by ILR veteran
Nigel Reeve last September after he had merged his former company, Fusion Radio,
with Milestone, but had then been prised out of that venture by Milestone's Andy
Craig. Earlier this year it applied unsuccessfully for the Maidstone licence, and is
currently organising RSLs in some of the remaining areas on the Authority's 'working
list'. The only financial information seen by staff in relation to Laser shows that in the
six months to February of this year, it had a turnover of £111k. Reeve claims that the
company has £400-500k available, and that a further £1.2m has been pledged by
external investors should this be required.
40. As noted above, as well as the serious concerns about its sources of funding, the
group's detailed financial forecasts are also somewhat implausible. It is claimed that
the costs and overheads are "based on actual radio costs" (section IV, p.3), yet follow-
up questioning failed to elicit which particular stations had been used as a model, and
indeed Pyke even claimed that the figures in the application (which were produced by
consultant John Brocks) "could be reduced". This would be helpful, as the anticipated
annual cost base of £500k is much higher than that of the incumbent (£300k). Even
though, as a stand-alone service, higher costs are to be expected, a proposed total of
eleven staff seems hugely inflated for a licence of this size, and DGR would need to
generate an unrealistic level of revenue simply to break even. Furthermore, staff have
identified flaws in all four of the revenue streams anticipated by the group. Its
assertion that "advertising revenues are beginning to improve" (section IV, p.4) is
unfounded and in any case is of no relevance to a small marketplace like Dumfries &
Galloway; it has provided no justification for its expectation that it would generate £5k
in sponsorship for each of its shows which would be broadcast by World Radio
Network; programme sales to BBC Radio Scotland are unlikely given the small
amount of independently-produced material the network commissions, none of which
is provided by commercial stations competing in its home market; and it seems most
unlikely that radio programmes about Dumfries & Galloway would attract significant
demand from overseas broadcasters. With these concerns in mind, it seems highly
improbable that the station could generate £460k in revenue in its first year on air,
rising to £500k by year three. South West Sound currently obtains £300k in revenue
each year, and has the benefit of access to regional and national sales through its
ownership by SRH. Although DGR claims that it could withstand a 20% shortfall in
revenue, staff are not convinced that the group would be capable of generating £300k
of revenue in its first year, let alone the forecast £460k. No research has been carried
out in order to determine whether the group's plans for independent production could
be transformed into a viable business proposal, and the applicant does not seem to
have given any consideration to whether a programme service offering more speech
content than the present incumbent would have a requisite effect on the audience and
revenue it would attract. That said, Pyke maintains that DGR is "an imaginative and
unconventional venture" which "does not fit into the normal pigeonholes."
41. South West Sound is proving itself to be a viable operation within the SRH
group, and clearly benefits financially from sharing resources with West FM and West

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Sound AM in Ayr. Although the re-application is sparse and seems to have been
hastily put together (the business plan is especially poor), it is evident that the station
has performed well in recent years. Revenue figures supplied to the Authority combine
SWS with the two Ayr licences, though separate SWS financial statements show
£296k revenue in the year ended September 2002 (20% of the combined £1.5m
reported by the three licences). Over the last two years, SWS turnover increased by 9%
per annum and, from evidence in the management accounts, looks likely to grow by
2% in the current year to September 2003. The re-application anticipated 25% growth
in 2003, which will certainly not materialise and, in follow-up questions, the group
acknowledged this error and credited the higher figure to enhanced expectations of the
local economy at the time of re-application. SWS is confident that higher revenue
levels are possible, though staff believe £350k to be more realistic than the £370k
projected for the current year. From 2004, revenue is expected to grow in line with
planned increases to the ratecard (3-5% p.a.). The group does not expect the increases
in advertising rates to affect the number of advertisers using the station, nor the
amount of airtime they purchase, an assumption that seems reasonable, given the lack
of competition in the TSA. According to the re-application, local revenue represents
70% of station sales, regional sales 14% and national sales 16%. The re-application
contains an unsatisfactory level of narrative on the station's revenue history and
forecasts, with future rises not fully explained. The attached management accounts
suggest to staff that local revenue will be 17% lower than budgeted, making total
income 5% below budget. Sponsorship income and national revenue are also projected
higher than could be reasonably expected.
42. Accounts show that costs at SWS have not changed dramatically in recent
years, but the re-application expects costs to increase sharply this year, by 18%. In
follow-up questioning, the group helpfully provided an analysis of costs over the last
year, showing the rise to be due largely to increased rental changes (as the rent-free
period of the new premises ends) and website overheads charged from the parent
company. Even after these increases, the station's cost base is only about £27k per
month, a level that no stand-alone station could realistically hope to achieve, especially
one proposing more substantial local programming. According to the balance sheet,
SWS broke even between 1998 and 2000. A loss of £27k in 2001 seems to be largely
the result of higher staff costs (five staff were employed then, rather than the present
four) and higher operating charges such as rent. These costs were reduced in 2002
which, combined with increased turnover, produced a £31k profit. Profit forecasts in
the re-application are ambitious, particularly since management accounts show 2003
profit will probably be only £10k, though the related revenue and cost assumptions
seem reasonable, despite a lack of detail. Owner SRH seems to have found an
equilibrium point at SWS whereby it can operate a service with minimal staff, making
it work for both its bottom line and for listeners. Given the degree of shared resources
with SRH's Ayr stations, and revenue figures that are apportioned, the 'profit' figures
could be open to manipulation. It does appear, however, that the station is generating
cash – some £7k in 2002.
Grant Goddard
4 September 2003