The document provides a strategic review of radio licensing in the UK market context. It finds that while there are 271 commercial radio stations offering a wide range of formats, choice varies significantly by location. In rural areas listeners may only have access to 1 or 2 stations, while Londoners can choose from over 20. The formats most widely available are Contemporary Hit Radio and Gold, but there are gaps for services targeting older audiences. Factors like availability of spectrum and the economic viability of niche formats influence the range of choice across the country.

1. 1
Radio Licensing Strategic Review
Market Context
November 2003
DRAFT

2. 2
Contents
1. Summary & Conclusions
2. Introduction
3. Range and choice
4. Audiences
5. Economics and ownership structure
6. Other radio services and platforms
7. Regulation in other countries
Appendix
Company Profiles

3. 3
Summary and Conclusions
At the end of 2003 Ofcom will assume responsibility from the Radio Authority for awarding commercial radio licences. Ofcom is taking
the opportunity to review the strategy for awarding licences. This paper sets the context for that review
Range and choice
• There are 271 commercial radio stations in the UK; 3 national and 268 local and regional, covering populations of between 1,000
and 10 million.
• The choice available to listeners depends on where they live, with Londoners having the greatest choice (20 commercial stations).
70% of the population have a choice of at least 7 commercial stations, but in rural areas there may only be 2 commercial stations
(including 1 national)
• Stations can be categorised by “Format” although these can be difficult to define and to distinguish and “format creep” where stations
gradually change their format without approval, can be a problem.
• In addition to the national stations, most listeners have the choice between a Top 40 “Contemporary Hit Radio” (CHR) station on FM
and a Gold station on AM – the legacy of traditional ILR stations.
• Newer stations that have entered the market have to offer something different – the smaller stations tend to offer “Full Service” (a
mix between CHR and Gold), whilst the larger regional stations tend to offer a wider range of formats
• As the reach of some niche services, such as Jazz is lower than formats like CHR, they require a larger potential audience to stand a
chance of becoming profitable. They are therefore are only viable a regional or London level.
• Due to frequency limitations not all formats are available everywhere – the big gaps are “Grey” and “Easy Listening” services for
older audiences and Modern Rock stations like Xfm.
• On AM, networking is used extensively and most stations are part of one of the 3 large “Gold” networks – e.g. Capital Gold. There
is pressure from some stations to allow increased “Networking” and “Automation”.
• There are few ethnic services outside London and they tend to be on the less popular AM band.
1. Summary &
Conclusions

4. 4
Summary and Conclusions
Audiences
• 90% of the population listen to radio for at least 15 minutes a week – 65% listen to commercial radio and they listen for an average
of 15.6 hours a week. Commercial radio takes a 46.2% share of the total radio audience.
• The most popular formats (in the areas they are available) are CHR and Adult Contemporary (AC).
• Between them, the range of commercial radio formats covers all of the demographic groups, but as the format most widely available
is CHR and some of the formats targeted at older audiences have very limited coverage, commercial radio’s overall audience profile
is much younger and more C2DE than the BBC’s.
• The smaller stations, particularly those in areas where there is a lot of competition, have often struggled to gain audience.
Economics and ownership structure
• Despite a difficult couple of years radio’s share of the advertising market has continued to grow and now stands at 6.6% of all display
advertising. Most revenue comes from national advertisers.
• The five largest radio groups (Capital, GWR, Emap, Chrysalis and Scottish Radio Holdings) between them account for two thirds of
all commercial audiences and around 85% of revenues.
• Only the large groups appear to be making profits, with many of the smaller groups and the independents struggling.
• There are likely to be significant changes in the ownership of both the major and smaller groups following the relaxation of ownership
rules.
1. Summary &
Conclusions

5. 5
Summary and Conclusions
Other radio services and platforms
• A Community Radio pilot scheme is underway comprising 15 services.
• Digital Radio finally seems to be taking off with cheaper sets in the shops and a wide range of services now available, but it will be a
long time before it matches the reach of analogue radio.
• There is a considerable amount of listening to radio via digital TV (20% claim to listen to the 50 services available via Sky) and to a
lesser extent the internet.
CONCLUSIONS
• There is a wide range of possible commercial radio formats, apart from the ubiquitous CHR and Gold formats.
• However, the limited availability of spectrum, particularly on FM, means that not all formats can be available everywhere. The main
gaps in format availability are generally in services for older audiences (“Grey”, “Easy Listening”) and Modern Rock stations such as
London’s Xfm, but there are other gaps.
• In order to be economically viable these “niche” formats need potentially large audiences – achieved either by a regional station or
by some form of networking of smaller stations.
• Digital Radio helps to fill these format gaps as does radio via Digital TV and the Internet, but it will be a long time before Digital Radio
has the ubiquity of analogue radio and TV and the internet will never offer the portability of traditional radio.
• The approach of licensing stations for as large an area as possible and for formats which serve new audiences would probably
extend the total reach of commercial radio, maximising consumer benefit.
• But this must be weighed against the benefits of the “localness” achieved by licensing small stations within existing larger areas.
These small services tend to offer very similar formats to those already available in the area and audience figures suggest that they
are not generally popular. However, more work is needed to determine what such “localness” actually means in practice (e.g. how
much is invested in local news) and how much audiences value that “localness” .
1. Summary &
Conclusions

6. 6
Summary and Conclusions
• Another factor to be taken into account is the economic viability of small stations. There is little evidence that they are commercially
viable, particularly when set-up in areas where there is already a lot of established and successful larger competition. More work is
required to model the radio market examining the viability of stations of different sizes and different formats with different levels of
competition.
• In many cases in practice there is no choice to be made between licensing new large or small stations – the remaining frequencies
dictate the size of station which can be offered. However, Ofcom may wish to review its policy as licences for existing stations come
up for renewal.
• There is scope for further AM licensing and Ofcom will need to consider how that spectrum should be used and whether the current
part-networked groups of Gold stations are making best use of that spectrum. For example it might be better to reconfigure the
available frequencies to create one or more national network or to use it for community radio.
• Ofcom should also consider its policy on syndication. At present stations use common play-lists as a way to get around the
syndication rules. It may be preferable to allow more true syndication in return for strengthening commitments to localness
elsewhere in the output.
• Ofcom will also nee to consider the future of RSLs and Community Radio and whether they require dedicated spectrum or should be
slotted in where feasible – for example in the AM band o within the BBC FM sub-bands.
1. Summary &
Conclusions

7. 7
Contents
1. Summary & Conclusions
2. Introduction
3. Range and choice
4. Audiences
5. Economics and ownership structure
6. Other radio services and platforms
7. Regulation in other countries
Appendix
Company Profiles

8. 8
Introduction
At the end of 2003 Ofcom will assume responsibility from the Radio Authority for awarding commercial radio licences. Ofcom is
taking the opportunity to review the strategy for awarding licences
This paper sets the context for that review. It considers the current state of the commercial radio market in the UK, including:
– The range of choice available to listeners – both in terms of the number of stations available in each area and the range of
output.
– The audiences for those services – in terms of size and demographics
– The financial state of commercial radio and the ownership structure of the market
– How radio is developing on other platforms – Digital Radio, radio listening via Digital TV and Radio on the Internet
– The licensing regimes that apply in other major countries
Further development of analogue radio in the UK is severely constrained by the availability of FM frequencies which, to a large extent
will determine the pattern of licensing. However, there are still choices to be made regarding the issuing of new licenses – between
small stations serving particular communities and ones covering larger areas (where frequency planning permits) and in terms of the
format of those stations. In addition, over the next few years the licences of existing stations will come up for renewal and Ofcom has
the opportunity, should it wish to do so, of gradually changing the shape of commercial radio in the UK.
2. Introduction

9. 9
The Radio Authority’s remit
Under the terms of the Broadcasting Act 1990, The Radio Authority’s objectives are to:
– Facilitate the provision of licensed services which (taken as a whole) are of high quality and offer a wide range of
programmes calculated to appeal to a variety of tastes and interests.
– Ensure fair and effective competition in the provision of such services.
In awarding licences the Radio Authority must have regard to the applicant’s:
– Ability to maintain the service proposed. Considerations include:
• Sufficient financial resources to establish and maintain the proposed service
• The experience of staff involved
• Access to premises, equipment or technical resources
– The extent to which the station would cater for the tastes and interests of people living in the area…
– The extent to which it would broaden the range of programmes available … in particular the extent to which it would cater
for tastes and interests different from those already catered for.
– The extent to which it is supported by people living in that area
The Radio Authority is not empowered to specify the types of programme output which it expects to be provided.
2. Introduction

10. 10
Ofcom’s remit
Ofcom’s duties under the Communications Act 2003 are broadly similar to those of the Radio Authority as regards the regulation of
commercial radio.
Ofcom must ensure:
– the availability throughout the UK of “a wide range of … radio services which (taken as a whole) are both of high quality and
calculated to appeal to a variety of tastes and interests”
– The maintenance of a “sufficient plurality of providers of different … radio services”
2. Introduction

11. 11
Contents
1. Summary & Conclusions
2. Introduction
3. Range and choice
4. Audiences
5. Economics and ownership structure
6. Other radio services and platforms
7. Regulation in other countries
Appendix
Company Profiles

12. 12
There are 271 commercial analogue radio stations in the UK
The 271 commercial radio licences in operation in the UK broadcast in the FM and AM bands:
FM 1 National service
9 London-wide services
16 Regional services in other parts of the UK (with one more yet to launch)
183 Local services (covering population sizes ranging from 2,000 to 3 million)
AM 2 National services
7 London-wide services
53 Local services
130 143 154 166 172 177
205
226 242 248 255 261 268
'91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03
No, of commercial licences
3 National
Source: Radio Authority
Local
History
1973 – 1988 Stations launched – one per area (except London) – all simulcast
on FM and AM – all offering a Full Service format (except LBC)
1988 Stations encouraged to offer separate services on AM and FM –
most chose to offer a “Gold” format on AM and Contemporary Hit
Radio ( CHR) on FM.
1990 onwards As more frequencies became available, additional stations began
to be launched covering all or part of existing ILR areas – offering
a choice of format (e.g. Jazz FM, Kiss 100) or covering smaller
areas (e.g. Wish in Wigan, already covered by Manchester and
Liverpool stations)
1992 – 1995 The three national commercial stations launched
1994 Regional licences began to be awarded
1999 Commercial Digital Radio services first launched
3. Range
& Choice

13. 13
The number of stations available to listeners varies by location
The number of stations available to listeners is determined by where they live.
– London has the greatest choice, followed by the Home Counties (where many of the London stations can be heard in
addition to more local stations)
– In the most densely populated areas of the country many listeners can choose between regional stations, stations from the
nearest big city and more localised stations.
– 71% of the population can choose between at least 13 stations (6 BBC and at least 7 commercial)
– By contrast, in rural areas listeners may only have access to one national commercial station and one local commercial
station.
5 5 5 5 5 5 5
1 2 1 1 1 1 1
3
3
3 3 3 3
1
17
11
5 4 3 2
1
0
5
10
15
20
25
30
Greater
London
Home
Counties
Metropolitan Large Town Medium Town Small Town Rural
Choice available to the average listener by size of market
Eg. Luton Manchester Southampton Northampton Carlisle Caernarfon
% of pop. 12 7 25 27 12 14 3
Local Commercial
BBC National
BBC Local
National Commercial
26
21
8
14 13
1112
Source: Rajar/Ofcom analysis
3. Range
& Choice

14. 14
Stations can be grouped into a number of “formats” based on their content
Each station’s licence contains a description of its format. There is no strict definition of a format – it is up to each licensee to devise its
own in its application - but it is possible to group stations into broad formats (see table). There can be considerable overlaps between
these formats and it is sometimes difficult to distinguish between them.
In addition, over time the Radio Authority
has deliberately relaxed its control over
formats, under pressure from the
commercial radio companies who argued
they needed the flexibility to be able to
adapt to changing market conditions.
This has led to “format creep” which has
dramatically changed the character of
some stations:
E.g. When London’s Easy Listening
station “Melody” became “Magic” it’s
output evolved rapidly from Frank Sinatra
and The Carpenters to The Stereophonics
and Coldplay. As a result it is now hard
to distinguish it from the AC format of
competitor “Heart”.
3. Range
& Choice
Format Description
Target
Age
Range
CHR
(Contemporary
Hit Radio)
"Top 40" Radio - includes most of the traditional ILR FM stations (Capital, BRMB,
Radio City, Clyde)
15-34
AC (Adult
Contemporary)
"Softer" music aimed at a slightly older audience than CHR (e.g. Heart, Ocean) 25-44
Full Service Encompassing CHR and AC, usually with higher speech content than these formats.
They tend to be small town / rural stations (e,g, Dee, Spire, Silk) or large regional
stations (Century, Real)
25-44
Dance Dance, R'n'B and Hip Hop, etc aimed at a young audience and competing generally
with BBC Radio 1
15-24
Rock The only station offering Rock at present is Virgin (AM nationally, FM in London)
although it is soon to be joined by Kerrang in the West Midlands
25-44
Modern Rock There is only 1 station of this format - Xfm in London (and nationally digitally) 15-44
Easy Listening There are only 3 such stations - by far the largest being Magic in London. Although
its used to offer a distinctive service (under the former brand Melody) it is now almost
indistinguishable from the AC stations such as Heart
25-54
Gold Music from the 1960s-80s. Most stations are on AM and many are part of one of the
three "quasi-networks" - Capital Gold, Classic Gold, Magic AM.
35-54
Grey A fairly new format (since the demise of Melody), there are only 2 stations - both
Saga - wfor the West and East Midlands
55+
Jazz There are 2 Jazz FM stations - London and the North West. The station is also
available nationaaly digitally.
35-54
Talk There are 2 LBC stations in London and the national talkSPORT service on AM Various
Ethnic Most ethnic stations are targeted at Asian audiences. Various
Classical Classic FM Various
Other Christian (Premier), Country music (Mean Country) Various

15. 15
The choice of formats is greatest in the big cities
Market
Classical
Rock
Talk
LocalTalk
ModernRock
AC
CHR
Dance
EasyList
Full
Gold
Grey
OtherEthnic*
Asian
Jazz
Christian
Country
Total
Formats
Market
Classical
Rock
Talk
LocalTalk
ModernRock
AC
CHR
Dance
EasyList
Full
Gold
Grey
OtherEthnic*
Asian
Jazz
Christian
Country
Total
Formats
London 1 1 1 2 1 1 1 1 1 1 4 2 1 1 1 20 18 Preston & Blackpool 1 1 1 1 1 1 1 7 7
Chelmsford 1 1 1 2 1 1 2 1 1 1 2 1 15 12 Sheffield 1 1 1 1 1 1 1 7 7
Maidstone 1 1 1 2 1 1 2 1 1 1 2 1 15 12 Teesside 1 1 1 1 1 1 1 7 7
Guildford 1 1 1 2 1 1 2 1 1 2 1 14 11 Wrexham 1 1 1 1 1 1 1 7 7
Luton 1 1 1 2 1 1 2 1 1 2 1 14 11 Belfast 1 1 1 2 1 6 5
Southend 1 1 1 2 1 1 2 1 1 2 1 14 11 Brighton 1 1 1 1 1 1 6 6
Wigan 1 1 1 2 2 3 1 11 7 Cambridge 1 1 1 1 1 1 6 6
Chester 1 1 1 1 1 2 2 1 10 8 Canterbury 1 1 1 1 1 1 6 6
Birmingham 1 1 1 1 1 1 1 1 1 9 9 Dundee 1 1 1 1 1 1 6 6
Manchester 1 1 1 1 1 1 2 1 9 8 Gloucester & Cheltenham 1 1 1 1 1 1 6 6
Bradford 1 1 1 1 1 1 1 1 8 8 Hull 1 1 1 1 1 1 6 6
Coventry 1 1 1 1 1 1 1 1 8 8 Ipswich 1 1 1 1 1 1 6 6
Liverpool 1 1 1 1 1 1 1 1 8 8 Norwich 1 1 1 1 1 1 6 6
Portsmouth 1 1 1 1 1 2 1 8 7 Plymouth 1 1 1 1 1 1 6 6
Southampton 1 1 1 1 1 2 1 8 7 Reading 1 1 1 1 1 1 6 6
Wolverhampton 1 1 1 2 1 1 1 8 7 Swansea 1 1 1 1 1 1 6 6
Bristol 1 1 1 1 1 1 1 7 7 York 1 1 1 2 1 6 6
Cardiff 1 1 1 1 1 1 1 7 7 Aberdeen 1 1 1 1 1 5 5
Derby 1 1 1 1 1 1 1 7 7 Exeter 1 1 1 1 1 5 5
Edinburgh 1 1 1 1 1 1 1 7 7 Lincoln 1 1 1 1 1 5 5
Glasgow 1 1 1 1 1 1 1 7 7 Oxford 1 1 1 1 1 5 5
Leeds 1 1 1 1 1 1 1 7 7 Worcester 1 1 1 1 1 5 5
Leicester 1 1 1 1 1 1 1 7 7
Newcastle 1 1 1 1 1 1 1 7 7 National
Nottingham 1 1 1 1 1 1 1 7 7 Regional 1 Regional, 1 Local * Other ethnic stations
Peterborough 1 1 1 1 1 1 1 7 7 Local each counted as separate format
There is little duplication of formats in individual markets. Where there is, this tends to be a local CHR or Gold station competing with a
larger station of the same format from the nearest big city.
Where CHR and Gold stations were already available ( a legacy of original ILR stations splitting frequencies in the late 80s/early 90s)
new entrants to the market – whether serving a smaller area within an existing licence (e.g. Canterbury, Gloucester) or a regional
station (e.g. Century, Real, Heart) have adopted the next most popular formats – Full Service or AC.
Source: Radio Authority / Ofcom analysis
Note: This table does not represent a comprehensive list of all markets
3. Range
& Choice

16. 16
The number of stations does not signify the availability of different formats
There is not a direct correlation between the number of stations of a particular format and the availability of such stations – e.g. there are
more Full Service stations than any other format, but they only cover around 69% of the population, as they are either regional or small
town stations.
CHR and Gold local stations cover most of the country, whilst the three national stations (Virgin, TalkSport and Classic FM) claim to cover
the whole country (In practice their analogue coverage is more limited due to technical coverage constraints, although they are available
nationally via Sky Digital). For example, there are 160 stations with either a CHR or Full Service format.
Some formats, such as Grey, Easy Listening (both targeted at older audiences) and Modern Rock have very limited availability.
100%100%
21%
100%
33%
11%
88%
69%
33%
23%
61%
98%
36%
AC
CH
R
Dance
Easy
List.
Ethnic
FullServ.
G
old
G
rey
Jazz
Rock
M
odern
Rock
Talk
Classical
131122
57
102
11
3
15
58
15
No. of stations
Availability %
Sourec: Rajar. Q3 2003
3. Range
& Choice

17. 17
Networking & Automation have increased over the past few years
“Automation” uses computerised playout to provide a service – in effect a “jukebox” with pre-recorded links. Automation limits on
content currently apply as follows:
– FM station covering more than 50,000 adults - maximum 2 hours during daytime
– FM station covering less than 50,000 adults or AM station (of any size) - maximum 4 hours during daytime.
“Networking” is where stations share output e.g. “Classic Gold”. Networked AM stations must broadcast at least 4 hours of local
programming and must not automate those 4 hours.
Stations get around the limits by having a common playlist (Capital, GWR) and inserting "local" DJ inserts, so that it's not absolutely
identical output across the whole group, though to the listener the songs are identical. This allows radio groups to reduce their
overheads.
Ofcom will continue to face pressure from licensees to allow:
– Further automation (currently limited to 4 hours per weekday on FM).
– Further Networking on AM
– Regional stations to make their daytime output more ‘mainstream’ and reduce or reschedule the amount of specialist output
The growth of quasi-national brands such as Century or Galaxy (albeit with locally produced programmes) allows smarter
programming and larger promotional budgets and may have an effect on listening levels and loyalty, but as yet there is no sign that
branding allows stations to charge higher prices.
3. Range
& Choice

18. 18
In the Metropolitan areas there is a patchwork of overlapping stations
3. Range
& Choice
Wirral
Buzz
Chester
Dee
Warrington
Wire
Wigan
Wish
Knowsley
KCR
Macclesfd
Silk
Oldham
Revolution
Bolton
Tower
Southport
Dune
Stoke
Signal 1
Manchester
Key 103
Galaxy 102
Preston
Rock FM
Liverpool
Radio City
Juice
NORTH WEST
Jazz FM
Century
Wrexham
MFM
The pattern in the Liverpool /
Manchester metropolitan areas gives
some idea of the complexity of the
availability of stations.
The Regional stations, Jazz FM and
Century cover the whole area.
The traditional “ILR” sized stations
cover each area at approximately a
county level – Radio City and Juice for
Merseyside, Key 103 and Galaxy for
Manchester. These big stations
themselves have some overlaps with
each other.
These are supplemented by a number
of more localised stations – Wish in
Wigan, Wire in Warrington, etc. in
areas which are already covered by
Regional and county sized stations.
Note: This map is representational only.
FM commercial stations in the North West

19. 19
Regional services offer a broader range of formats
FM
>2.5m
1.5 - 2.5m
0.5 – 1.5m
0.1 - 0.5m
Licence populations
<0.1m
The first Regional station, Jazz FM in the North West, launched in 1994. Stations
offer more varied formats than local stations, but limited frequencies mean that the
formats available in each region vary widely.
There is strong competition for Regional licenses, which can be extremely lucrative.
The recent award of the third West Midlands licence to Emap’s “Kerrang” was hotly
contested with 11 applicants offering a wide variety of formats – 5 Rock applications,
Region Station Format Owner
Central Scotland Beat Dance Capital Radio
Real Radio Full Service GMG
North East Century Full Service Capital Radio
Galaxy Dance Chrysalis
North West Century Full Service Capital Radio
Jazz FM Jazz GMG
Yorkshire Galaxy Dance Chrysalis
Real Radio Full Service GMG
West Midlands Heart AC Chrysalis
Saga Grey Saga Group
East Midlands Century Full Service Capital Radio
Saga Grey Saga Group
East Vibe Dance SRH
Solent Wave Full Service SRH
S Wales & West Vibe Dance SRH
S Wales Real Radio Full Service GMG
2 Talk, Jazz, Children’s, Asian and
Country.
Because the population coverage – i.e. the
potential audience – is higher stations can
afford to offer more niche formats. Even
so, size is not a guarantee of profitability.
For example, Jazz FM has only just
reached profitability after 13 years of
operation in London and 9 in the North
West – and only then after having relaxed
its format to a more mainstream “smooth
jazz and classic soul”.
3. Range
& Choice

20. 20
AM Radio is dominated by three “Gold” networks
There are 2 National AM stations (Virgin and talkSPORT) and 60 Local licensed
AM stations in the UK. AM stations tend to have lower audiences and are
generally targeted at older audiences than FM.
The Gold Format
Of the Local stations, 44 have a “Gold” format and are mainly operated by one of
4 groups – Capital (Capital Gold, Emap (Magic), Classic Gold Digital and Scottish
Radio Holdings.
The lower audiences affect the viability of AM stations. As a result, 3 of the 4
major groups offering “Gold” services (Magic, Capital Gold and Classic Gold) carry
large amounts of syndicated (networked) programming.
There is generally little investment in AM stations and the large groups hold onto
the licenses more as “real estate” than for their potential profitability.
On average Gold stations have a 9% reach and a 4% share, but this disguises
wide variations – e.g.
Reach Share
– Capital Gold Birmingham 4% 1.3%
– Magic Leeds 15% 6.8%
Other stations
Apart from the four main groups, outside London, most stations serve either ethnic
audiences or rural areas, where there id little FM competition.
The Radio Authority’s review of AM in 2002 found that there is scope to advertise
further AM licenses.
Capital Gold
Club Asia
LBC News 1152
London Turkish Radio
Mean Country 1035
Premier Christian Radio
Spectrum Radio
Sunrise Radio
Magic
Capital Gold
Classic Gold
SRH station
Other stations
London AM stations
Sunshine Ludlow
Signal 2 Stoke
Sabras Radio Leicester
Radio XL Birmingham
Asian Sound East Lancashire
County Sound Guildford
Valleys Radio S Wales Valleys
Swansea Sound Swansea
Radio Maldwyn Montgomeryshire
Fresh Radio Skipton
>2.5m
1.5 - 2.5m
0.5 – 1.5m
0.1 - 0.5m
Licence populations
<0.1m
3. Range
& Choice

21. 21
There are few stations for ethnic minorities outside London
Name Location Band Audience
Radio XL Birmingham AM Asian
Sunrise FM Bradford FM Asian
Asian Sound Radio East Lancashire AM Asian
Sabras Radio Leicester AM Asian
Club Asia London AM Asian
Sunrise Radio London AM Asian
Choice FM London FM Black
London Greek Radio North London FM Greek
Spectrum Radio London AM Multicultural
London Turkish Radio North London AM Turkish
FM
AM
The majority of stations for ethnic audiences are on AM. Whilst the
stations would prefer to be on FM, the Radio Authority has generally
decided that limited frequencies the relatively small potential audience
(within the given coverage area) and limited availability of frequencies.
Whilst audiences within each ethnic group are not measured by Rajar,
Asian services are obviously popular with their target audience.
Sunrise Radio in London has a weekly reach of 405,000 listeners,
whilst the national BBC Asian Network has a weekly reach of 495,000.
There are also a large number of Asian radio services available via the
Sky Digital Television platform.
Note: The BBC Asian Network broadcasts
on AM in the Midlands and parts of the
North and nationally on DAB
3. Range
& Choice

22. 22
Contents
1. Summary & Conclusions
2. Introduction
3. Range and choice
4. Audiences
5. Economics and ownership structure
6. Other radio services and platforms
7. Regulation in other countries
Appendix
Company Profiles

23. 51.8
46.2
2.0
40.9
10.9
36.8
51.6
51.4
52.6
46.7 46.5
45.3
1.9 1.9 2.1
40.4
40.2 41.4
11.211.311.1
9.57.27.67.2
38.3
38.7
38.1
0
15
30
45
60
Q1
00
Q2
00
Q3
00
Q4
00
Q1
01
Q2
01
Q3
01
Q4
01
Q1
02
Q2
02
Q3
02
Q4
02
Q1
03
Q2
03
Q3
03
Q4
03
5.0
21.0
66.064.8
66.5
66.4
65.064.7
65.9 64.8
6.15.8 5.5
58.0
58.357.9
56.3
20.2
21.8 20.8
26.0
21.0 21.6 21.3
55.0
55.1
56.1 55.2
0
20
40
60
80
Q1
00
Q2
00
Q3
00
Q4
00
Q1
01
Q2
01
Q3
01
Q4
01
Q1
02
Q2
02
Q3
02
Q4
02
Q1
03
Q2
03
Q3
03
Q4
03
BBC Network
BBC Nat/Loc
Other
(non-
Rajar)
Local
Commercial
All Radio Weekly Reach
%
All Commercial
All BBC
Overall BBC Radio Reach and Share Q2 2003
The latest Rajar audience results (Q3 2003) show that 90% of the population (15+) listen to radio every week (43.7m people). On
average they listen for 24.4 hours a week each.
Commercial radio reaches 65% of the population (31.6m people) and they listen to commercial radio for an average of 15.6 hours a week.
BBC Radio’s share has been declining this year, largely due to Radio 2’s audience falling back slightly from a record high. Meanwhile
National Commercial Radio’s share has risen, due to the inclusion in the past couple of quarters for the first time of digital stations (either
digital only stations such as “Smash Hits” or national digital audiences for local analogue stations such as “Kiss”. Such stations accounted
for 2.2% of total radio listening in Q3 2003.
National
Commercial
Source: Rajar
All Radio Share
All
Commercial
BBC Network
Other
BBC Nat/Loc
Local
Commercial
National
Commercial
%
All BBC
2000 2001 2002 2003
2000 2001 2002 2003
The BBC has higher reach and share than commercial radio
Definitions:
Reach: The number or
percentage of people
aged 15+ within a
defined area who listen
to the service for at
least 15 minutes a
week
Share: The share of total
listening to a particular
service or set of
services within a given
period (normally
quarterly)
4. Audiences

24. 6.9 6.1 6.1 6.3
1.7
2.9
4.7 4.2 4.6 4.9 4.5
42.5
43.7
43.4
44.5
43.4
25.4
24.2
23.2 23.5
23
13.612.5
12.9
13.0 13.6
55.2
56.4
55.456.3
54.9
5.8
2.11.81.7
0
5
10
15
20
25
30
35
40
45
50
55
60
Q1
99
Q2
99
Q3
99
Q4
99
Q1
00
Q2
00
Q3
00
Q4
00
Q1
01
Q2
01
Q3
01
Q4
01
Q1
02
Q2
02
Q3
02
Q4
02
Q1
03
Q2
03
Q3
03
Q4
03
FIVE LIVE – Reach and Share Q2 2003
UK-wide Weekly Reach by
Format%
The trends in listening over the past three years show a
broadly steady picture by station format, although in the last
quarter, CHR & Dance stations had lost reach, whilst Easy
Listening, Grey, AC and Gold stations had gained (partly due
to Saga – see below - and Heart’s growth in London, at
Capital FM’s expense).
Jazz FM’s reach has grown over the past year as it has
become available to a wider audience via digital TV.
Within the area’s they are available, CHR, AC and Full
Format stations continue to have the highest reach, whilst the
“grey” format of Saga’s stations, only available in the
Midlands, has grown to reach 11% of the available population
in the short time since the stations launched.
Formats with a lower reach require a larger potential audience
to earn sufficient revenues to achieve profitability.
Easy Listening,
Grey, AC & Gold
Virgin
Classic FM
Total Local
Commercial
2000 2001 2002 2003
Source: RAJAR/IPSOS-RSL; BBC; Ofcom analysis
CHR &
Dance
talkSPORT
Jazz FM
Reach by Format within area
available (Q3 2003)
* Easy Listening = Magic (London)
%
Commercial stations targeted at younger audiences have the highest reach
Source: RAJAR/IPSOS-RSL; Ofcom analysis
Note: Not all
formats are
universally
available.
29
21 19 17 13 13 11 9 6 5 6 48
0
5
10
15
20
25
30
35
C
HR
A
C
FullServ.
D
ance
Easy
List.
C
lassical
G
rey
G
old
Jazz
EthnicM
odern
R
ock
Talk
R
ock
4. Audiences

25. 25
Between them, the available formats cover all demographics
The audience demographic varies widely by format and
between them, the formats cover most demographic
combinations, but many formats are not available across the
UK.
25 29
19
47
53 49 51
3
1014
14 26
40 51 49
62
381064
9 16
31
17 12 15
50 50 57
43
17
35 40 52 48
26
74
1 2 5
15-24
25-34
35-44
45-54
55-64
65+
M
ale
Fem
ale
A
B
C
1
C
2D
E
Jazz FM
Grey (Saga)
Classic FM
48 52
30
70
8 13 20 152024
15-24
25-34
35-44
45-54
55-64
65+
M
ale
Fem
ale
A
B
C
1
C
2D
E
24 23 25 16
46 54
38
62
8 5
46
26 16
46 54
39
61
238
34
65
30
70
144
22
41
27
19 28 30
15
64
36
49 51
25
15 16 19 14 20 16
43
57 56
44
66
34
4753
6
10
21
28
2016
Rock
(Virgin)
Modern
Rock (Xfm)
CHR
AC
Dance
Easy
Listening
Gold
Full
Service
% of total audience within each format
% of total audience within each format
39
61 58
42
44
18 20 112 5
5644
25
75
1612
18
29
16
10
25 29
19
47
53 49 51
3
1014
Talk (LBC)
TalkSport
4. Audiences

26. 26
But overall commercial radio is younger and more downmarket than the BBC
Combining the audience for all commercial stations, shows that commercial radio’s audience is younger (61% under the age of 45) and
markedly more C2DE than the BBC’s audience, which tends to be much older (50% over the age of 50) and more upmarket.
This is not surprising given the BBC’s range of stations – Radio 2, Radio 3, Radio 4 and BBC Local Radio all tend to attract audiences
over 50 – and the availability of formats within the commercial sector.
With the exception of Classic FM, the most widely available commercial FM services are targeted at younger audiences, whilst those
targeted at older audiences are much more limited in their availability.
50 51 42
5816 12 11
19 19 23
15-24
25-34
35-44
45-54
55-64
65+
M
ale
Fem
ale
AB
C1
C2D
E
52 48 53 47
30
201715108 BBC
Commercial
% of total audience within each sector
4. Audiences

27. 27
Small stations in competitive areas struggle to gain audiences
In recent years the Radio Authority has licensed stations to
smaller areas across the country. These may be either within
existing licence areas (e.g. Wigan, Lewisham) or in areas which
did not already have a commercial service.
The decision to award such small licenses in areas where there
was already considerable competition, rather than a further
large-scale station serving more potential listeners was driven by
two factors – the availability of frequencies and a policy decision
to offer listeners more localised services.
The audience reach for any particular station will be a factor of
(amongst other things) its format and the level of competition.
Not surprisingly, the more competition there is the lower the
reach of individual stations within a particular market. In small
markets where there is a lot of competition (normally from larger
and better funded competition from the nearest large town or
city) audience percentage reach and share is particularly low. As
these stations obviously have a smaller potential audience than
larger markets to begin with, the effects on the viability of such
small stations is dramatic.
20
27 28
35
20
32
30
0
5
10
15
20
25
30
35
40
>2.5m 1.5-2.5 0.5-1.5 0.5-1.5 0.1-0.5 0.1-0.5 <0.1Pop coverage
No. of comm. 2+ 0-1 2+ 0-1
FM compets.
% Reach
% Share
9
12 12
17
9
15 14
0
2
4
6
8
10
12
14
16
18
>2.5 1.5 - 2.5 0.5 - 1.5 0.5 - 1.5 0.1 - 0.5 0.1 - 0.5 <0.1Pop coverage
No. of comm. 2+ 0-1 2+ 0-1
FM compets.
Large town Small /
Medium town
Station Location No. Listeners Reach % Share %
Fusion Lewisham 11,000 3 1.0
Clan FM Motherwell 27,000 9 3.3
Time Thamesmead 17,000 3 1.2
Thames Kingston 20,000 2 0.5
Note: Thames FM became “Jackie” in 2003
Sourec: Rajar, Ofcom analysis
Examples of poorly performing small stations in
highly competitive markets
Audience performance by size of
station and level of competition
4. Audiences

28. 28
London is by far the most competitive radio market in the UK
2
3
45
78
10
12
1414
19
22
0
5
10
15
20
25
Capital
FM
Heart Magic Kiss Virgin Capital
Gold
Jazz FM Choice
FM
LBC
97.3
Sunrise LBC
News
Premier
% Reach
7.0
7.2
5.0
4.1
3.4
2.3
2.0
2.5
2.4
1.2
0.6
58.7
1.5
Capital FM
Other
(BBC,
Classic FM,
talkSPORT)
Heart
Magic
Kiss
Virgin
Capital GoldCapital Gold
Jazz FM
Choice FM
Premier
LBC News
Sunrise
LBC 97.3
% Share
4. Audiences
London has 15 London-wide commercial stations in addition to
the commercial UK networks and the BBC. In addition, there are
a number of services which each serve part of the capital.
Because of the range of services, London gives perhaps the best
indication of the popularity of different formats, although the
picture is distorted by some of the formats being on AM (thereby
getting lower audiences than they would on FM) and the lack of a
“Grey” station.
The local market is dominated by Capital FM (CHR) and Heart
(AC) – the same formats that dominate listening elsewhere in the
country.
Capital 95.8 FM CHR Capital Radio
Capital Gold 1548 London Gold Capital Radio
Xfm Modern Rock Capital Radio
Choice 96.9 FM Ethnic Choice FM
Heart 106.2 FM AC Chrysalis
LBC 97.3 Talk Chrysalis
LBC News 1152 Talk Chrysalis
Club Asia Ethnic Club Asia
Kiss 100 FM Dance Emap
Magic 105.4 FM Easy Listening Emap
Jazz FM 102.2 Jazz GMG
Premier Christian Radio Christian Premier Christian Radio
Virgin FM 105.8 Rock Scottish Media Group
Virgin Radio Rock Scottish Media Group
Spectrum Ethnic Spectrum
Mean Country 1035 Country Sunrise Radio
Sunrise Radio Ethnic Sunrise Radio

29. 29
Contents
1. Summary & Conclusions
2. Introduction
3. Range and choice
4. Audiences
5. Economics and ownership structure
6. Other radio services and platforms
7. Regulation in other countries
Appendix
Company Profiles

30. 30
Despite difficult times, Radio’s share of the advertising market has grown
In the early 1990s there was a lot of speculation as to whether commercial radio would ever break through the “4% barrier” to gain a
larger share of the advertising cake. In fact, Radio was the fastest growing advertising medium in the 1990’s taking 6.8% of total display
advertising in 2002. The primary driver of growth has been income from national advertisers which, as a proportion of NBR, has
increased from 44% to 55%. At its peak in 2000 National advertising accounted for 58%.
Despite revenue falling back in the past two years, radio’s share has continued to increase. Since 1992 Net Broadcasting Revenue
(NBR) has risen from £116m to £496m, although the last couple of years have been difficult. Industry forecasters predict Radio’s share
of display advertising could rise to between 8.5% and 10% by 2010, with revenues up by 30-50% from their current level.
5.1 5.3
5.8
6.3
6.7
7.3
7.9
8.4
9.2
8.5 8.6
6.66.46.4
5.5
5.3
4.9
4.6
4.3
3.8
3.4
2.8
0
1
2
3
4
5
6
7
8
9
10
'92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02
0
1
2
3
4
5
6
7
8
9
10%£000m
Total display advertising spend (£000m)
Radio’s share of total display advertising (%)
5. Economics &
Ownership
153
272
72
496
0
100
200
300
400
500
600
'92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02
Sponsorship
National
TOTAL
Local
Radio revenues
£m

31. 31
Three major groups dominate the commercial market
Capital, Emap and GWR between them account for almost 50% of commercial listener hours and 66% of revenues. The next two
largest groups, Chrysalis and SRH account for a further 17.6% of audiences and 18% of revenues. The share of these five
groups, at 70% of total NBR in 2002 is up from 55% in 1994.
Over the period, Capital has lost revenue share slightly (now 24% of the total), whilst Emap (18%) and GWR (25%) have grown.
Chrysalis has risen from nowhere to take 10% of NBR.
Despite the advertising recession, the larger groups are still making profits, although these are down on previous years. The
national advertising recession has hit the major groups hard over the last two years, only Chrysalis and SRH (through
acquisitions) have seen turnover growth. All the others have seen sizeable declines. The high fixed cost nature of radio
operation means radio operating profits are much harder hit. Only Chrysalis has seen profits rise on the back of increased like for
like revenue.
Market share of commercial radio hours
18.9%
3.7%
6.1%
4.5%
7.9%
9.7%
20.7%
13.9%
14.6%
Capital
Emap
GWR
Chrysalis
SRH
Other
TWG
SMG
GMG
Source: Rajar Q3 2003
51
95 11821
66
90
75
122
49
30
41
91
109
75
24
21
13
0
100
200
300
400
500
600
1994 1998 2002
Others
SRH
Chrysalis
GWR
Emap
Capital
Revenue by Group
£m
5. Economics &
Ownership

32. 32
Smaller Radio Groups and the Independents face a tougher time
The smaller groups, without exception, are not profitable. This is partly due to the fact that most of the stations they operate (with the
exception of TWG’s TalkSport) are relatively small-scale with high fixed costs and often face stiff competition.
The Radio Authority’s review of licensees’ performance in 2003 considered why smaller radio groups and independents are not profitable.
It found that in these smaller groups:
– Revenues are lower (particularly among stations with a high level of competition) and costs higher than were anticipated in
licensees’ business plans
– There is greater sensitivity to staff movements – especially sales staff
– The quality of management is generally poor
5. Economics &
Ownership
Group
No.
Stations
Radio
Revenues
Group
Turnover EBITDA
Operating
Margin Net Debt
Market
Cap P/E
£m £m £m % £m £m
Capital 20 118 120 27.9 12.5 29 400 27
EMAP 18 90 1,029 182 17.7 277 2218 23
GWR 35 122 127 8.6 11.5 66 261 n/a
Chrysalis 8 49 235 17.2 4.5 26 370 51
SMG 2 28 278 65.6 39.0 n/a 239 n/a
SRH 20 41 84 16.8 10.7 n/a 228 n/a
TWG (Wireless Group) 14 29 29 (8.3) n/a n/a n/a n/a
Radio Investments 22 12 12 (4.4) n/a n/a n/a n/a
UKRD 11 7 7 (3.4) n/a n/a n/a n/a
Forever Broadcasting 3 4 4 (8.2) n/a n/a n/a n/a
Fusion 6 1 1 (4.9) n/a n/a n/a n/a
Tindle 6 n/a n/a (0.1) n/a n/a n/a n/a
Lincs FM 8 5 5 (0.2) n/a n/a n/a n/a
Note: Based on latest financial year, so does not agree to total revenue for 2002
Source: Deutsche Bank, Enders Analysis, Radio Authority
*
* Excludes 20 Classic Gold stations
Note: There are a further 78 stations outside these groups – either part of smaller groups or independent.

33. 33
There are likely to be significant changes in ownership, but perhaps not yet
Under the Radio Authority points system, there was a a 15%
national limit on points held by any one group.
Of the 80 stations launched since 1997 56% (45) have changed
hands. Recently there have been few transactions as major
buyers are close to the points ceiling (Capital, GWR and EMAP)
or do not have the funds (GWR, Radio Investments)
The latest new players to emerge are GMG and Saga
This system has now gone allowing for greater consolidation
within the industry, subject to the new rules of any two
Foreign players may enter the market:
– Viacom
– ClearChannel
– NRJ
although indications are that new buyers may wait to enter the
market to ensure that the price is right.
13.6 13.2
11.2
9.4
6.9
Capital Emap GWR Chrysalis SRH
15% ownership limitPoints as at May 2003
Group Interests Free Float %
Capital UK Radio 100%
GWR UK Radio 70% (Daily Mail 30%)
Emap Consumer & B2B magazines (UK &
France), UK Radio and UK TV
100%
Chrysalis UK Radio, music publishing / recording,
book publishing
72% (Chairman C
Wright 28%)
SMG UK TV (ITV in Scotland), UK Radio,
Outrdoor advertsing
100%
SRH UK & Ireland Radio 60% (SMG 29%, DC
Thomson 11%)
5. Economics &
Ownership

34. 34
Contents
1. Summary & Conclusions
2. Introduction
3. Range and choice
4. Audiences
5. Economics and ownership structure
6. Other radio services and platforms
7. Regulation in other countries
Appendix
Company Profiles

35. 35
Demand for Restricted Service Licences (RSLs) continues to be strong
RSLs fall into a number of categories:
– Long-term RSLs – Single-site services (e.g. Hospital
Radio, University Radio)
– Short-term RSLs – Low power services intended for
reception over a fairly limited area for a maximum of
28 days. They tend to be of two types:
• Groups wishing to apply for a permament
licence to allow them to “test the water” and
gain experience
• Stations linked to a particular festival, sports
coverage or a religious festival (e.g. Ramadan)
Stations can be either on AM or FM, depending on frequency
availability. The band 87.5 – 88.0 MHz has been reserved by the
Radio Authority for RSLs.
If it were not to be used for RSLs this band could be used for a
number of more traditional large local commercial services.
RSLs would then have to be accommodated elsewhere in the
AM or FM bands.
178
241
188
262
318 324
350 343
393
464
423
450
0
100
200
300
400
500
'91 ;92 '93 ;94 '95 '96 '97 '98 '99 '00 '01 '02
Short-term RSL Licences issued
6. Other services
& platforms

36. 36
A “Community Radio” pilot scheme has been running for the past year
15 groups are taking part in a Community (Access) Radio pilot scheme launched in 2002. The scheme
will run until December 2004.,
The aim is to assess whether 'Access Radio', a new tier of not-for-profit radio, is a viable concept and, if it
is to be introduced in the future, how it might be licensed, regulated, funded, promoted and organised.
In March 2003, an independent evaluation of the project concluded that the ”projects are delivering on
their promises of social gain” by.
– Encouraging individual empowerment and enhanced employability through the acquisition of
transferable skills..
– boosting community spirit and self-awareness.
– contributing to the improved delivery of public services and of information to hard-to-reach groups.
FM
AM
Station Name Area Description / Target Audience
Cross Rhythms City
Radio
Stoke on Trent Christian
Angel Community Radio Havant, Hampshire People over 60
Bradford Community
Broadcasting
Bradford inner-city The disadvantaged
Takeover Radio Leicester Children
Radio Faza Nottingham Asian
GTFM Pontypridd Community
Awaz FM Central Glasgow Asian
Resonance FM Southbank &
Bankside in London
Arts
Wythenshawe FM Greater Manchester Community
Desi Radio Southall, West
London
Asian
ALL FM South-Central
Manchester
Community
Forest of Dean
Community Radio
Forest of Dean Community
Sound Radio East London Those under-represented by existing
media
New Style Radio Winson Green,
Birmingham
Afro-Caribbean
Shine FM Banbridge, Co.
Down
Christian
6. Other services
& platforms

37. 37
Digital Radio covers 85% of the population and new stations have launched
Digital One, holder of the national Digital radio licence covers 85% of the population
offering the three analogue networks in digital quality plus 5 new national stations.
45 Local multiplexes have been awarded. They also offer a mix of existing and new
stations. Being local they offer operators the flexibility of build quasi-national networks on
a “pick and mix” basis (subject to the ownership of the multiplex).
The range of formats available on Digital Radio is much wider than most listeners are
used to.
National coverage
(Digital One)
Local coverage
Not yet awarded
National Existing brands Format New National brands Format
Classic FM Classical Planet Rock Rock
Virgin Radio Rock Oneword Plays, books, comedy
TalkSport Sport Core CHR
Life AC
Prime Time Easy Listening
Local
Existing local brands
brought to new areas
New brands - most
available in a number
of areas
Capital Gold Gold 3C Country
XFM Modern Rock Abracadabra Children's
Classic Gold Gold Capital Disney Children's
Century Full DNN News
Heart AC Gaydar Gay
Jazz FM Jazz Groove Soul
Kiss Dance Liquid CHR
Magic Gold Passion for the Planet Environment
Sunrise Asian SBN Student
Saga Easy Listening Smash Hits CHR
Galaxy Dance Smooth Easy Listening
Storm Rock
PLUS The Arrow Rock
Major existing local brands The Hits CHR
Urban Choice Urban
6. Other services
& platforms

38. 38
After a very slow start Digital Radio take-up is growing
11B
11C
11D
12A
12C
12D
Capital
Capital/Emap (CE Digital)
Emap
TWG/Emap
TWG (Switchdigital)
GWR (Now Digital)
SRH (Score Digital)
MXR
DRG
Regional
0
2
4
6
8
10
12
14
'02 '03 '04 '05 '06 '07 '08
Forecast take-up of Digital Radio
Not yet awarded
Local
13m
Since 1998 one National and 36 local multiplexes (carrying 283 services) have
commenced broadcasting.
All the multiplexes are owned by the major radio groups (largely in the same
areas they already hold analogue licenses, as a result of the licensing provisions
in the 1996 Broadcasting Act). However this does guarantee digital access for
their own stations). To date some £50m has been invested in Digital Radio,
mainly in the transmission system.
Audience growth has been much slower than anticipated due to the poor
availability of inexpensive receivers, although this has changed in the past year.
GWR (which owns Digital One and therefore has a vested interest) forecasts
take-up of 13m sets by 2008. However, on average a household has 5 radio
sets, it will be many years before Digital Radio becomes the dominant platform.
Source : GWR
(owners of
Digital 1)
6. Other services
& platforms

39. 39
There is a significant amount of listening to Radio via the TV
Radio on Digital TV
Sky
Freeview
Analogue
Digital
Sky
Freeview
Analogue
Digital
AC Heart Gold Capital Gold
Children's Capital Disney Classic Gold
CHR Capital FM Jazz Jazz FM
Core Modern Rock Xfm
The Mix Kerrang
Heat Q
Smash Hits Other RTE RnaG
The Hits Rock Planet Rock
RTE Radio 2 Mojo
Christian 11 Christian Stations The Arrow
Classical Classic FM The Storm
RTE Lyric FM Virgin
Country Mean Country Soul Solar
Dance Galaxy Speech LBC 97.3
Kiss Oneword
Easy Listen. Primetime RTE Europe
Magic RTE Radio 1
Ethnic 7 Asian Stations TalkSport
Full Service Century WRN Europe
Real Radio Sport Big Blue
Gay Gaydar Student SBN
TOTAL 50 10
Also on: Also on:
One of the surprises of the success of Digital Television has been
the success of Radio on the platforms. Sky, the Cable
companies and Freeview all offer a number of radio stations. Sky
offers 50 commercial stations in addition to BBC services and its
subscription “Music Choice” service, whilst Freeview offers 10
commercial services in addition to the BBC.
TV offers ease of tuning and guaranteed sound quality, but does
not have the advantage of portability – i.e. listening is normally
limited to the main room in the house.
Stations broadcasting include the major groups, aiming to bring
their brands to a national audience, and niche stations which
would be unlikely to win an analogue licence – e.g Christian,
Asian.
The number of people who listen to the radio via TV has been
growing and is now over 20%, with 61% of those who do use the
service listening once a week or more.
% Adults ever listen to radio via the TV
12.6 13.4 13.6 14.6
16.0
18.6 19.7 20.4
13.1
Sep
'01
Dec
'01
Mar
'02
Jun
'02
Sep
'02
Dec
'02
Mar
'03
Jun
'03
Sep
'03
% of those who do listen to Radio on TV
who use the service once a week or more
61 61 61 65
59 59 62 60 64
55
68
A
llA
dults
M
enW
om
en
15-24
25-34
35-44
45-54
55-64
65+
A
B
C1
C
2D
E
6. Other services
& platforms

40. 40
Many thousands of stations from around the world are available on the Internet.
With increasing numbers of broadband “always on” connections, with the
improved sound quality that comes with higher bandwidth, this sort of listening
is increasing and is particularly popular with younger audiences.
However, as with listening via the TV, listening is limited by portability.
However, unlike TV, where the receiver can only be used for one thing at a
time (i.e. TV or Radio), listening can be done while using the computer for other
things.
The problem for the broadcasters is that streaming radio via the internet is
expensive, with a high marginal cost per listener – unlike traditional
broadcasting which has a zero marginal costs.
In addition to live streaming of output, the internet can also be used to deliver
programmes that listeners may have missed. The BBC offers an extensive
service of this sort, which may account for the high listening to national rather
than local stations.
8.3%
3.3%
0.5%
0.4%
1.8%
1.2%
15.9%
9.5%
2.0%
1.5%
4.8%
3.2%
18.9%
11.9%
2.6%
2.1%
6.2%
3.9%
22.1%
14.4%
4.1%
2.5%
8.1%
3.9%
Visited a station website
Listened via internet….
…at all
…to local station
…to other local station
…to UK national station
…to non-UK station
Mar-00
Sep-01
Sep-02
Sep-03
Source: RAJAR/Ipsos-RSL
% of people who listen to the radio via
the internet
Listening to the Radio via the Internet is popular amongst younger groups
% of people who listen
once a week or more to
radio via the Internet
3.6
5.1
2.6
7.8
6.0
4.0
3.3
1.3
0.4
A
llA
dults
M
en
W
om
en
15-24
25-34
35-44
45-54
55-64
65+
6. Other services
& platforms

41. 41
Contents
1. Summary & Conclusions
2. Introduction
3. Range and choice
4. Audiences
5. Economics and ownership structure
6. Other radio services and platforms
7. Regulation in other countries
Appendix
Company Profiles

42. 42
United States
The Federal Communications Commission [FCC] was established by the Communications Act of 1934 to license and regulate all
communications media. The FCC’s Media Bureau Audio Division licenses all commercial and educational radio stations on a market
by market basis with one transmitter per licence (only low-power FM repeaters can be added to serve areas of poor reception)
The Licensing process
There are almost 11,000 commercial AM and FM licences in operation – an increase of 5% over the past six years – owned by 3,400
different owners. No specific licences are advertised - an applicant has to demonstrate that its proposal fits within the available
spectrum in the area it would serve. Where there is more than one applicant for the same frequency, the conflict is resolved by means
of an auction. The auction process was mandated by Congress and the President in the Telecommunications Act of 1996. Fees and
auction payments collected by the FCC are directed to the U.S. Treasury. Competition issues are examined by both the FCC and the
Department of Justice.
Radio stations are licensed for a period of up to eight years. Before a licence is renewed, the FFC first determines whether it has
served the public interest. In addition, to have its license renewed, a station must certify that:
– it has sent the FCC certain specified reports;
– its ownership is consistent with the Communications Act, which restricts interests held by foreign governments and non-
citizens;
– there has not been a judgment against it by a court or administrative body under federal, state, or local law; and
– it has placed certain specified material in its public inspection file.
Listener choice
Each local market is served by many more commercial stations than an equivalent market in the UK (due to the size of the country and
lack of interference with nearby markets, and the absence of public service radio (except for NPR).
– The Format of stations is not regulated but is determined by the market
– Across the country, on average, listeners have a choice of 22 stations, owned by 10 companies, offering 10 different
formats.
– In the largest 10 markets, an average of 56 stations are available, owned by 25 owners operating 16 formats.
– There are no regional or national licences in the USA.
7. Other
countries

43. 43
France
Le Conseil supérieur de l'audiovisuel (CSA) regulates commercial AM and FM radio stations within five categories:
– Publicly-funded community, educational or neighbourhood stations
– Independent regional and local stations not broadcasting networked programming
– Regional and local stations broadcasting national special-interest programming
– National special-interest stations without local opt-outs
– National general-interest stations
The Licensing Process
Public Service Broadcasting stations are allocated frequencies as a priority by the Société Télédiffusion de France, then the remaining
frequencies allocated to the CSA.
The CSA calls for applications for a specific geographic area and for one of the five categories, which are then reviewed and as many
stations licensed for five years as fit into the frequency plan.
Listener Choice
The market has developed into around 20 quasi-national networks (including the public broadcasting services of Radio France) owned
by a number of large groups, each offering different formats. E.g. NRJ (CHR), Nostalgie (Easy Listening), RFM (AC), MFM (Gold),
Europe 1 (Full Service). Coverage of these networks is not universal and depends upon frequency availability.
There are very few truly local stations other than the public France Bleu network. Stations licensed as "local" are required to broadcast
local programming for a specific number of hours during daytime.
Quotas were introduced in 1996 requiring music stations to broadcast a minimum of 40% French titles
7. Other
countries

44. 44
Australia
The Australian Broadcasting Authority [ABA] regulates commercial radio, television and the internet in Australia.
The Licensing Process
Licence Area Plans are drawn up for each local market, setting out the number of transmitters planned, the areas served and technical
information.
Licences are divided into types:
– Local commercial radio stations
– Not-for-profit community radio licences either serving specialist interests or a specific geographic area
– Temporary community radio licences (up to 12 months duration)
– Narrowcasting licences either targeted to special interest groups, targeted to limited areas, or covering a special event
Commercial radio licences are awarded to the highest bidder ($24m for a new Adelaide FM licence)
The policy is to licence as many stations in markets as is technically feasible, in the expectation that competition will provide diversity of
content.
Following changes to ownership rules which allow owners to operate two stations in each market there has been considerable
consolidation of the industry over the past five years. Currently 80 per cent of the stations are in the hands of 12 radio networks.
Listener Choice
There are currently 251 commercial radio stations on air in Australia, with a further five yet to launch; . The majority (213) are in
regional markets with only 36 in the metropolitan areas of Sydney, Melbourne, Brisbane, Adelaide, Perth.
In addition there are five national (ABC) radio networks, 230 community stations and around 100 high power open narrowcasting
stations. There are no national or regional commercial radio stations.
There is no format regulation (part of "the move to a more open and competitive regulatory regime")
Commercial radio accounts for 70 per cent of listening. The remainder is accounted for by the ABC (Public Service Broadcasting)
which is not regulated by ABA and legislated directly by government
7. Other
countries

45. 45
Canada
The Canadian Radio-Television & Telecommunications Commission [CRTC] regulates all aspects of the Canadian broadcasting
system.
The Licensing Process
The CRTC advertises a specific geographic area and issues a call for applicants, with Commissioners determining a winner
Licences are divided into:
– FM commercial (divided into French and English)
– FM non-commercial (universities, colleges)
– FM ethnic commercial
– AM commercial (divided into French and English)
– AM ethnic commercial
Each category is further divided into classes (A, B, C) according to transmitter power.
Foreign ownership is not permitted
Listener Choice
There are over 400 licensed local stations offering a range of formats.
There are no national or regional commercial radio stations.
The format of stations is not regulated but Music radio stations must play a minimum of 35% Canadian music for English formats and
65% for French formats ("Canadian content" rule)
Public Service Broadcasting (CBC) has substantial audiences but is not regulated by CRTC and is legislated directly by government
Frequency allocations for the CBC are administered by the CRTC and fit into overall frequency plan
7. Other
countries

46. 46
Contents
1. Summary & Conclusions
2. Introduction
3. Range and choice
4. Audiences
5. Economics and ownership structure
6. Other radio services and platforms
7. Regulation in other countries
Appendix
Company Profiles

47. 47
>2.5m
1.5 - 2.5m
0.5 – 1.5m
0.1 - 0.5m
Licence populations
<0.1m
Capital Radio Group
93.0 105.2 123.9 122.3 119.2
0
50
100
150
'98 '99 '00 '01 '02
35.4 37.7 41.2
30.1 27.8
0
20
40
60
'98 '99 '00 '01 '02
Capital FM Network (incl. BRMB,
Beat, Invicta, etc) Format: CHR
Century FM Format: Full service
Kiss 100 Format: Dance
Capital Gold Format: Gold
FM
AM
Brands
Financial Performance
Revenue
£m
Profit before tax
£m
Company
profiles
including Capital FM (until recently the market leader in
London), Century in the North and Midlands and Kiss.
Capital also operates a number of Digital Radio licences, some in
partnership with Emap (CE Digital)
In March 2003 the group reported a 15.5% fall in pre-tax profits and a 5.2%
fall in revenues.
Some analysts believe it is ripe for take-over. A take-over by any of the
other major groups would require disposals, although GMG has stated its
interest in buying Capital. A take-over by an overseas company such as
Viacom or ClearChannel is a distinct possibility.
Headline EpS23.8 8.8
Capital owns 20
stations and has
few interests
outside radio. It
has been pursuing
a strategy of
building brands
targeted at
different segments
of the audience

48. 48
Chrysalis Radio Ltd
Galaxy Format: Dance
Heart Format: AC
LBC 97.3 Format: Talk
LBC News Format: Talk
FM
AM
>2.5m
1.5 - 2.5m
0.5 – 1.5m
0.1 - 0.5m
Licence populations
<0.1m
Brands
Company
profiles
138.0
235.0
0
50
100
150
200
250
'01 '02
-3.0
-14.0
-15
-10
-5
0
'01 '02
Financial Performance
Revenue
£m
Profit before tax
£m
Headline EpS3.4 (10.0)
The company is growing share organically and has been successful in
doing so - Heart in London recently overtook Capital FM to become the
largest commercial station in London and the recently acquired and
revamped LBC stations are also growing audiences. The company has
said that, following the sale of its TV business, it will be in a strong position
to look for acquisitions in the UK Radio sector.
Chrysalis also has a 39% stake in MXR, which holds the several regional
Digital Radio licences.
Originally a music publishing and
recording company, Chrysalis is a
relative newcomer to the radio
industry, but it has decided to
focus on the sector.
It owns 8 stations, with three
strong brands (Heart, Galaxy and
LBC), all of which are large scale.

49. 49
Emap
Magic Format: Gold/Easy Listening
Kiss Format: Dance
Kerrang Format: Rock (not yet on-air)
FM
AM
>2.5m
1.5 - 2.5m
0.5 – 1.5m
0.1 - 0.5m
Licence populations
<0.1m
Brands
829 849 909 938 967
0
500
1000
1500
'99 '00 '01 '02 '03
162 184
143 151 175
0
50
100
150
200
'99 '00 '01 '02 '03
Financial Performance
Revenue
£m
Profit before tax
£m
Radio 2003
Revenue £89m
PBT £25m
Big city stations
Format:CHR
(e.g Key 103,
Radio City,
Aire FM)
Company
profiles
magazine titles (e.g. Q, Kerrang, Smash Hits).
The group owns 18 UK radio stations including Magic, Kiss and the Big City
network (comprising the large traditional ILR FM stations) in the North of
England, where it is the market leader. It recently won the new West
Midlands regional licence for Kerrang, extending one of its magazine
brands into analogue radio for the first time. The company is also building
its magazine linked radio stations and its other radio brands on a quasi-
national basis on Digital Radio and Radio via TV.
Emap also operates a number of Digital Radio local multiplexes, either in its
own right or in partnership with Capital or The Wireless Group (TWG).
Emap has major
interests in
magazine
publishing, both
consumer and
B2B. It has also
launched a
number of TV
Music channels
based around
some of its
popular music

50. 50
Guardian Media Group (GMG)
Jazz FM Format:Jazz
Real Radio Format:Full service
FM
>2.5m
1.5 - 2.5m
0.5 – 1.5m
0.1 - 0.5m
Licence populations
<0.1m
Brands
Company
profiles
The Guardian Media Group has acquired a number of radio stations in the
past couple of years and is now the sixth largest player in the UK radio
market. Its management has stated that it is looking for further radio
acquisitions – it is interested in buying Capital Radio.
The company owns 5 stations and operates two brands – Jazz FM (which it
acquired in 2002) and Real Radio, a Full Service brand offering a mix of
music and speech targeted at a 35-44 year-old audience.
GMG also holds a 39.5% stake in Radio Investments Ltd, which controls a
further 22 stations, and an 18% stake in MXR which holds several regional
Digital Radio licences.
The Group’s status as a trust means that it cannot itself be the target of an
acquisition.

51. 51
GWR
FM
>2.5m
1.5 - 2.5m
0.5 – 1.5m
0.1 - 0.5m
Licence populations
<0.1m
+ Classic FM
(National coverage)
73.7 84.2 102.3
127.2 128.4 127.1
0
50
100
150
'98 '99 '00 '01 '02 '03
14.1
18.3 19.2 20.7
7.7 8.6
0
10
20
'98 '99 '00 '01 '02 '03
Financial Performance
Revenue
£m
Profit before tax
£m
Headline EpS8.2 11.1 12.9 12.7 4.0 4.8
34 Local stations incl. GWR,
Trent, Chiltern, Beacon
Most stations format: CHR
Company
profiles
The company has no stations in the large metropolitan areas (although it
did formerly own LBC), which means that it has generally faced less
competition than some of the other major groups.
After pulling out of some poor foreign investments, the group is now in a
stronger position to play a role in future consolidation of the sector.
21% of revenue is derived from Classic FM, with a further 70% from other
UK Radio stations. The group sold its AM “Classic Gold” “network” to UBC,
but retains a 200% stake in its former network.
GWR also owns Digital One the UK National Digital Radio multiplex holder
and has been awarded a number of local multiplex licences.
GWR has grown by
acquisition and now
owns 34 local stations
plus the only national
FM licence, Classic FM.
The local stations
operate in medium and
small towns across the
East of England, the
Midlands, the South
West and North Wales.

52. 52
Radio Investments Ltd
FM
>2.5m
1.5 - 2.5m
0.5 – 1.5m
0.1 - 0.5m
Licence populations
<0.1m
With GWR
With SRH
Company
profiles
Radio Investments Ltd owns 22 small local stations, concentrated in
Yorkshire and along the south coast.
GMG also holds a 39.5% stake in the company and GWR holds a further
20%. One station is owned in partnership with SRH.
The company made a loss of £4.4m in 2002 on turnover of £12m.

53. 53
Saga Radio
FM
>2.5m
1.5 - 2.5m
0.5 – 1.5m
0.1 - 0.5m
Licence populations
<0.1m
Saga Radio
Format: Grey
Company
profiles
The Saga group had been trying for many years to win a radio licence
before it won the second West Midlands regional licence, which launched in
2001. The group then won a further regional licence for the East Midlands,
which launched in 2003.
The stations operate a “grey” format, targeted at the over 50s – the only
station specifically aimed at this audience (although Classic FM’s audience
is also older).
The stations cater for the audience which has been gradually
disenfranchised by BBC Radio 2, as the latter pursues a younger audience.
In their short lifetimes, both Saga stations are already proving successful,
with an 11% reach in the West Midlands and 9% in the East Midlands.
These figures are bound to grown in time as the stations become more
established.
Saga also operates under its own brand in several areas on Digital Radio
and operates Primetime Radio, targeted at a slightly younger audience, on
the national Digital Radio multiplex.
STOP PRESS: Saga was awarded the FM licence for the Glasgow area
on 6.11.03.

54. 54
Scottish Media Group (SMG)
Virgin Radio
Format: Rock
AM – National
FM - London
Scottish Media Group’s (SMG’S) main interest is in the
ITV Licences for Scotland (Scottish TV and Grampian
TV)
It also owns Virgin Radio and a 29.9% stake in Scottish
Radio Holdings (SRH)
Despite poor ratings resulting from its AM only coverage
outside London, Virgin is highly profitable, with a 2002
turnover of £25.9m and profits of £10m. The station
achieved a premium of revenue over ratings and a 38%
operating margin.
Company
profiles
281.0 278.0
0
100
200
300
'01 '02
-64.0
-16.0
-80
-60
-40
-20
0
'01 '02
Financial Performance
Revenue
£m
Profit before tax
£m
Headline EpS(22.5) (5.8)
Radio 28 26
Revenues £m

55. 55
Scottish Radio Holdings (SRH)
FM
>2.5m
1.5 - 2.5m
0.5 – 1.5m
0.1 - 0.5m
Licence populations
<0.1m
AM
Vibe Format: Dance
Wave 105 Format: Full service
Local brands Formats: CHR/Full service
(e.g. Clyde, Forth,
Downtown)
Brands
44.0 55.0
72.0 80.0 84.0
0
20
40
60
80
100
'98 '99 '00 '01 '02
11 14 16
11 -13
-20
-10
0
10
20
'98 '99 '00 '01 '02
Financial Performance
Revenue
£m
Profit before tax
£m
26.0 32.3 35.8 19.7 (49.7) Headline EpS
Company
profiles
Scottish Radio Holdings (SRH) owns 20 analogue stations, including the
market leaders in each of the major Scottish cities. In recent years the
company has expanded south of the border, with the Vibe Dance brand
in the East of England and around the Severn Estuary and Wave 105
around the Solent and into Northern Ireland, with the acquisition of
Downtown Radio.
Operating profits were down in 2002, but the overall loss resulted from
the loss on disposal of the company’s outdoor advertising business.
The company is 29.9% owned by SMG.

56. 56
UBC (Classic Gold Digital)
>2.5m
1.5 - 2.5m
0.5 – 1.5m
0.1 - 0.5m
Licence populations
<0.1m
AM
Classic Gold Format: Gold
Brands
Company
profiles
In September 2000, GWR sold 12 of it's 17 Classic Gold stations to Classic Gold Digital Ltd, a
company owned 80% by UBC Media Group plc - GWR retain the other 20%. UBC paid GWR
just over £2m for the stations with 5million shares going to GWR also. GWR were, at the time,
struggling with the Radio Authority's ownership points system, and sold the stations on the
agreement that they can buy back 55% of the new company anywhere between five and eight
years after the deal was done.
GWR continue to sell airtime for the network through it's OPUS sales-house.
UBC are also part shareholders in Oneword, the national digital broadcaster.
UBC Media’ principal business is the ownership and operation of digital and analogue
commercial radio stations, radio programme production and the provision of audio and data
services to the radio, internet and telecommunications industries.

57. 57
UKRD
FM
AM
>2.5m
1.5 - 2.5m
0.5 – 1.5m
0.1 - 0.5m
Licence populations
<0.1m
Star
Other brands
Brands
UKRD Group Ltd owns 11 analogue terrestrial radio stations and has
interests in other stations in Oldham, Alton (Hants) and Lanarkshire.
The group has recently re-branded some of its stations as “Star”.
In 2001, revenues were £7m, turning in an operating loss of £5.2m with a
salary bill of £5.9m and debts of £5.3m.
Company
profiles

58. 58
The Wireless Group
FM
AM
>2.5m
1.5 - 2.5m
0.5 – 1.5m
0.1 - 0.5m
Licence populations
<0.1m
+ talkSPORT
(AM National coverage)
The Wireless Group is run by the former Sun editor Kelvin MacKenzie
and is 20% owned by News Corporation.
Following its launch in 1998 the group was forced by banking covenants
to make disposals of some of its principal radio stations, including
Southampton’s “Wave” to SRH and “Scot FM” (now Real Radio) to
GMG.
TalkSport’s financial performance has improved thanks to cost-cutting ,
but the station is still not profitable.
In 2002, TWG made a loss of £2.9m on turnover of £29m.
The group is in conflict with Rajar over the methodology of measuring
radio audiences.
Company
profiles

59. 59
Small Groups
FM
>2.5m
1.5 - 2.5m
0.5 – 1.5m
0.1 - 0.5m
Licence populations
<0.1m
Fusion Radio Holdings
Kent Messenger Group
Lincs FM plc
Forever Broadcasting
Company
profiles
The Kent Messenger Group runs several local
newspapers in Kent and has been part of four
successful radio licence bids in the county. In
1999 it took control of the Thanet station TLR
which was renamed KM-fm. Since then it has
taken control of stations in Canterbury,
Folkestone/Dover, Tunbridge Wells and the
Medway
Forever aims to identify potential purchases,
implement a strong financial management team
to turn around under-performing stations. Each
station has a distinct brand and business plan in
line with group aims. Several stations have
recently been disposed of leaving just three
stations - Peak 107 in Chesterfield,
Wolverhampton's 107.7 The Wolf and
Bolton/Bury's Tower 107.4FM, In aggregate, the
remaining group stations are all operating in
profit and are making money.
Fusion owns 6 stations in the
Midlands and South of England.
In 2003, a process to acquire
Fusion Radio was started by the
Milestone Group, who own
newspapers and the local
Oxford TV station (SIX TV).
The Lincs FM Group began with
the licence for Lincolnshire and
has gradually won licences in
adjoining areas in the East
Midlands and Yorkshire. The
group now comprises 8 stations.