The Radio Academy's Music Radio 2001
3 April 2001 - The Peacock Theatre, London

Feargal Sharkey - Member of the Radio Authority

I want to begin by saying thank you to everyone for allowing me this opportunity to speak to you.

And I would also like to begin by telling you about a man called James Sharkey. James Sharkey is my dad. Now aged 87, James was an electrician, and raised 7 kids in Northern Ireland. I think it is probably fair to say that he was not particularly pleased when his number 3 son, Feargal decided to abandon what was a very promising career delivering televisions for Radio Rentals for the opportunity to appear on the BBC's T.O.T.Ps. Which, of course if the Sunday Tabloids were to be believed, was bound to lead to an endless round of driving expensive sports cars into swimming pools during some drug crazed orgy.

Well, James is a lot more relaxed these days. Feargal never did find that drug crazed orgy and James has even become a big fan of pop music.

Last week James like 43 million other adults living in the United Kingdom listened to the radio.

That's 43 million adults who experienced a vast array of programming, speech, news, drama, indie, pop, dance, jazz, classical, country, rock.

That meant 43 million adults were totally dependent, primarily on two industries for this wealth of information and entertainment - the Record Industry and the Radio Industry.

So here we are. Two industries, as much dependent upon each other as their audience is on them. Two industries both facing perhaps an uncertain but undoubtedly challenging future.

Long term declining sales for the music industry, commercial radio faces a slide in share against the BBC. . One way or another between them the two businesses have to cope with cheap imports, increased competition, 3G mobile phones, universal access to the Internet, demands of retailers, demands of advertisers, conditional access to your artists, callout research, White Papers, Green Papers, the new Communications Act, the OFT, the Radio Authority, the DCMS Select Committee - at times I'm sure it must seem like you are been attacked by all sides.

Both these industries that share so much in common, on occasion, at least to this observer, seem to be doing a fairly reasonable job of strangling each other.

How many times have we all heard that old mantra "Oh, I'm not going to playlist your record - it's not in the top forty", Oh, and how do you suggest I get my record into the top forty if you're not going to play it, "Your record didn't research too well", and my personal favourite, "It doesn't fit within our Radio Authority Format", I'm going to come back to that one later.

The Radio Industry is currently facing what is likely to be the most radical overhaul of broadcasting legislation since the late 1980s - the new Communications Act.

The Radio Industry hopes, not unreasonably in my view, that this new legislation will include some relaxation of the current ownership rules, allowing continuing growth, development and consolidation for the industry.

The Radio Authority has proposed to government that this liberalisation should go ahead. We have suggested what we feel is a simple, straightforward and transparent principle. In short, in any local area there should be at least three separate owners of commercial radio stations plus the BBC.

But naturally there are those who would like more. There are those who feel that they should be allowed a 50% share of commercial listening. In other words, two commercial operators. They will put forward a wide range of what initially appears to be quite reasonable and indeed sensible logic.

For example, some operators might suggest If we were to be allowed to own all or most of the stations in the same town it would not be in our commercial interests to have them competing against each other for the same audience.

I did say that it appears quite reasonable. But it has a flaw, and a very critical one - the advertiser's shilling, economists will tell you about a theory which they refer to as an "Hotelling effect" - they will explain that businesses tend to cluster around the middle ground, thereby maximising profitably and shareholder value. John Myers managing director of the Guardian Media Group in an interview to Media Week stated "The advertiser's pound ensures that stations are focused on delivering a high audience". To quote the Radio Authority in last year's submission to Government, "Our own research indicates that in de-regulated markets in the USA, increased concentration of ownership does not yield a genuine increase in diversity beyond mainstream formats, but produces similar formats with only minimal commercial differences."

If this theory of diversity was correct it would mean that there would only be 3 major record companies providing the world with every shape, form, colour and description of music that anyone could possibly ever want. But that's not the case, nor will it ever be. What we do have is a successful, vibrant independent sector within the music industry providing music to an audience that the major companies simply think is not in their commercial interests to serve.

So, while on paper, we might have what looks like diversity, is it in fact nothing more than an illusion? Do we genuinely want our future to be a place where an Indie station will only play Indie records that are in this week's top forty? A place where dance stations will only play dance records that are in the week's top forty? A place where an AC stations will only play AC records that are in this week's top forty? Ring a bell anybody?

So what does all this mean for the record industry? Well, if Government accepts the Radio Authority's proposals, then we would be looking at 3 commercial operators owning anything up to 90% of the commercial stations in the UK. Potentially that means 3 playlists covering 90% of commercial radio - I hope that you radio pluggers in the audience are paying attention.

And what has been the record industry's reaction to all of this? What does the record industry have to say about something that could potentially have such a colossal impact on its future? To be honest - not a lot. So far, the only input I have been able to find has been a single submission from the BPI which covered just two sheets of A4 paper. And guess how many times the word radio was mentioned in that submission? The answer - none, not once!

I had thought that after the MMC investigation in the early 1990s that the record industry had awoken to the fact that there is a big world out there, a world that will continue to grow, evolve and develop, with or without you. Perhaps I had raised my hopes a little too high.

We have also said in our submission that the BBC should no longer continue to both manage and regulate itself. In a competitive market you simply cannot continue to be both a player and a regulator. Now, I do appreciate that you have obligations to your licence fee payers. But to these ears, Radio 1 during the day does sound like it is in competition with the commercial sector and I believe there are some who still have discomfort with what seems to be a lack of transparency between some of your DJs and their commercial and financial interests. As a private citizen of this country and a licence fee payer, I would warmly welcome a clear guarantee from the BBC and Radio 1 that my licence fee is not being used to provide a platform for others to further their own vested commercial interests. WorldPop.com sponsoring the chart show, how could you?

But there are, I'm pleased to say, some very good things contained within the proposed new legislation. It looks like OFCOM will happen. It looks like there will be a radio division. It looks like positive programming regulation will continue, that's radio stations Formats to the rest of us.

I did say that I would return to Formats, and I would now like to take a few moments to clear up a few of the more interesting myths and misconceptions about the Radio Authority and Formats.

1. The Radio Authority is responsible for the homogenisation of radio playlists in the UK - Not true!

The Radio Authority does not pick radio station Formats. In fact it is the people applying for radio licences who choose, for themselves, the type, range and style of programming they wish to provide. For example, outside of London, in the last two years the Authority has received 87 applications for local radio stations, of these 65 had chosen, for themselves a mainstream, CHR or AC Format, that's 75% of applications. So, invariably the Radio Authority ends up awarding 75% of its licences to a mainstream CHR or AC Format. Yes, that does mean more local radio stations, with the same Format, competing for the same audience and using the same playlists. I would suggest that there are some within Commercial Radio who would do well to look closer to home, who could and should be bolder, more creative, more innovative. You never know - your audience might actually even like it.

By the way, for those of you within the Record Industry a copy of the Format of every single Commercial Radio station in the UK is available on the Radio Authority's Website.

2. The Radio Authority will not allow us to change the Format of our station.

John Bradford said to me a few weeks ago, "you know what the problem is, people think the Radio Authority paints the double yellow lines". Well, we don't. The Radio Authority does not paint the double yellow lines - in fact, the Radio Authority follows a set of statutory obligations outlined in broadcasting legislation.

For example, one states that the Authority must secure the character of the station as described in the original application. However we can approve changes provided that, any change made does not substantially alter the character of the station, or narrow the range of programmes available to the listener. And we have asked Government for the freedom to do more, to allow changes when the regulator judges that it would be in the interests of the listener for their to be greater competition: that is RA-speak for allowing some, direct, head-to-head competition between commercial radio stations in the major markets.

Now, believe it or not, we actually are very reasonable people. . . Some might even say a little too reasonable. In the last two years the Authority has received 78 requests for variations to Formats and of those 70 have been approved in full either by staff or Members on the basis that those changes would not substantially alter the character, or narrow the range of programmes available. The rest were not approved (or not approved in full) simply because the Members of the Authority have, as I have already stated, a very clear instruction from Parliament, not to allow those changes.

There are some within Commercial Radio who are not happy with those instructions. There are some within Commercial Radio who are pushing hard against current ownership limits. I can understand their sense of frustration. I can understand that their shareholders will demand continuing growth and profitably. I can further appreciate that one of the avenues open to them is to increase advertising revenue which, of course, means increased listening figures achievable through a broader format.

Let me be very clear on one point. We at the Radio Authority never say that a station must or must not play any particular record or artist. Not even Britney Spears, not even Feargal Sharkey. What we do say is that we will judge a stations output as a whole, against reasonable listener expectations, and that has got to mean at times that we review the range and content of a playlist or music log. How else can you do it?

3. The Members of the Radio Authority don't know anything about music.

It would be tempting for me to stand here and perhaps bore you all with tales of my Rock & Roll conquests, provide you with some of the more colourful highlights from a career which now spans some 23 years within the music industry. But I won't. I actually fully appreciate the fact that not everyone bought my records. There may even be, a few obviously quite misguided individuals who probably didn't even like them.

However, I will say and for the record, that the Radio Authority, in 2001 has access to and makes use of a vast array of information including research. That the Radio Authority, in 2001 has direct access to and contact with specialists in just about any genre of music you care to mention. That we have direct access and contact with people who not only write, produce, manufacture, sell, market and promote music but also people who as part of their daily professional lives are responsible for the programming and delivery of music to the listener.

Yes, the Authority DOES know what went on at Bedrock last month. Yes the Authority DOES know there is a difference between Samantha Mumba and The Mull Historical Society. To suggest otherwise is not only disingenuous it is, to be frank, naive.

During the lifetime of the current Radio Authority Commercial Radio has grown from a 118m pound a year business to 443m in 1999. Last year for the first time, Commercial Radio has gained more than 6% of display advertising and for that it has to be congratulated.

We estimate that over 30,000 Digital Radio receivers have now been sold in the UK. There are currently 35 Digital Radio stations broadcasting in the London area with more to come. There are currently 20 other digital multiplexes providing some 178 digital radio services being rolled out through the United Kingdom. Analogue radio has never been more successful. Listening is rising, the numbers of hours people spend with their radio for the first time is beginning to rival that of television.

It is clear to me that radio is going through one of its periodic spells where it has to re-invent itself to take full advantage of a new world. But it's OK, Trevor Horn was wrong, video did not kill the radio star. I truly believe that radio in this new century will prove itself even more successful in meeting the challenges of a new society and new technologies.

Can the Record industry pull off the same trick? Probably it can, but it would be foolish in the extreme to ignore the track record of radio, and the clues which radio's success offers.

Remember this, next week over 43 million people will be out there, listening to the radio. They deserve the best that both industries can give them.

 

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