Privatising Radio 1 and Radio 2

In today’s FT, the former chairman of Endemol UK, Peter Bazalgette argues for the BBC selling off Radio 1 and Radio 2. As part of an argument to solve the BBC’s problem of facing losing a “top-slice” of the licence fee, Bazalgette has noted that the BBC still has a 55% share of radio.
His solution is to therefore sell off those two stations, which would overnight increase commercial share substantially, and reduce that of the BBC’s.
But there are two reasons why we needn’t and indeed shouldn’t do this.
1. While the BBC is biggest amongst the overall adult population, it’s doesn’t have the biggest share among the commercially attractive younger audience. Amongst 15-44s, commercial radio has a 53% share, while the BBC has a 44% share (the 3% difference is made up of “other” non-RAJAR measured radio listening). So although the BBC remains a powerful competitor, commercial radio is no weakling amongst listeners who’ve grown up listening to a commercial alternative.
2. Selling off Radio 1 and Radio 2 would be disastrous for the rest of the commercial radio industry. There are only five national FM stations broadcasting in the UK: Radios 1-4 and Classic FM. What Bazalgette is proposing is to sell off the two popular music stations. This is fine if you’re part of a commercial group that ends up winning these stations, but disastrous for everybody else. Commercial radio revenues are fairly static at the moment – about £600m – and they’re not likely to grow significantly in the near future. Indeed one of the issues facing new entrants to the industry is that, like television, everybody’s seeing a slightly thinner slice of the pie as more stations launch.
If Radio 1 and Radio 2 became commercial, you can be sure that the lion’s share of that £600m would go to the owners of those stations; everybody else would be fighting for metaphorical breadcrumbs. The biggest stations always get the most advertising, and these two would strangle local stations who rely on national income.
It seems a strange thing to argue coming as someone who works in commercial radio, but I think you’ll find the same is true if I was at ITV. They don’t want to see their revenues halved if money had to flood into BBC1. As a nation, we’re not large enough to support such a diverse selection of mainstream, and expensively produced services as we currently have. The advertising market just wouldn’t sustain it.