Written by Media, Radio

Privatising Radios 1 & 2

At the Radio 3.0 conference today in London, outgoing GCap chairman Richard Eyre called for the BBC to privatise Radios 1 and 2.
Eyre, stressing that he was speaking in a personal capacity, said it was no longer appropriate that the BBC should spend nearly £100m a year on the two mainstream national stations – which he estimated could be sold for £1bn – when the licence fee was under pressure and its public service rivals were calling for a share of its income.
“If GCap is worth £375m then Radio 1 and Radio 2 must be worth a billion,” Eyre said.

Well that’s fine. But as I’ve said before, such a move would be disastrous for the rest of the commercial radio industry. Between them, the two stations currently command a 27.1% market share of all radio listening, compared with all commercial radio having 41.1%.
Now while those two stations would undoubtedly lose some audience with the introduction of adverts, the fact of the matter is that they have by far the best spectrum in the country for popular music radio. No other groups could compete. ILR’s would lose cash.
Look at radio revenues over the last five years – they’re basically static, sitting around the £600m mark.

Source: RAB
Into that mix add two stations that would command overnight 40% of all commercial radio listening and you can see where the money’s going to go.
Of course no commercial operator could afford to fund the stations to the extent that the BBC does, so expect the less popular and more expensive areas to immediately be dumped. These cost a lot but don’t really pull the audiences in as Chris Moyles, Jonathan Ross and Terry Wogan do. They’d keep their jobs.
It’d be great if you’re the company that bid for them, but otherwise, your company would be screwed. It’d be utterly monopolistic.
And any hope for re-booting DAB, launching C4 Radio or similar would be immediately scuppered.
Finally, you’d be disenfranchising the 12 million or so BBC Radio 1 and 2 listeners who don’t listen to any other BBC radio services.