The trade body that represents Britain’s commercial radio industry has pledged to “vigorously oppose” BBC plans to launch 65 new online local video services, arguing that the move would have a “devastating impact” on local radio stations, small and large.
The Radiocentre, which lobbies on behalf of almost 300 radio stations, has today added to concerns voiced by the local newspaper trade body the Newspaper Society that the BBC is jeopardising the financial viability of commercial media operators with the proposed service.
At a media briefing this morning, the Radiocentre chief executive, Andrew Harrison, said the BBC’s £23m-a-year local video proposal – and the potential of it being rolled out further in coming years – “worries the hell out of me”.
“The market impact of this proposal could be devastating,” he said. “Not only does it threaten the financial viability of the stations but it’s targeted at the 15-44 demographic which is one that they have not traditionally served.
“We know that commercial radio is at the heart of local communities. A significant proportion of our output is news and weather and what’s ons. We think the market is already very well served. We’ll certainly be campaigning pretty hard.”
His comments were echoed by the managing director of the Bauer Radio Group, Dee Ford, who said: “Effectively everything this proposal stands for flies in the face of everything we stand for. This is the narrow end of the wedge. We’ve got a competitor that’s so well-funded and coming towards us.”
According to the Radiocentre, the £23m annual budget for the proposed BBC service is more than the overall profit made from local advertising on all of the UK’s commercial radio stations last year, and is around three times the market value of the Local Radio Company plc.
The BBC’s move into local online news comes at a time when the commercial radio sector is struggling. Revenues have remained flat – around the £600m mark – for several years and a number of groups are cutting back on local programming to save money.
“We just see this massively threatening and distorting the balance of the ecology at a time when the industry is delicate,” Harrison added. “This has the potential to have a devastating impact.”
He added that commercial media companies were coming under attack from three separate new BBC launches – the local video initiative, the roll-out of the iPlayer and the joint venture TV catch-up service Kangaroo, which is currently being examined by the Competition Commission.
“It’s inconceivable that a commercial media company could afford to launch one of these services, let alone three simultaneously,” Harrison said. “It’s the impact and potential that worries the hell out of me. I certainly would like to see this proposal parked.”
Media regulator Ofcom is currently carrying out a market impact assessment on the proposed local video scheme. The deadline for submissions has been extended to 4 August.
The BBC’s online video plans have been significantly scaled back since they were first announced two years ago.
The new plan is for the BBC to introduce video content to its local websites across the UK that could see between 250 and 300 new video journalist jobs created over five years if approved.
The revised local plan will seek to tackle the concerns of the regional press by introducing a number of self-imposed limits to the BBC’s local news activities.
It proposes to limit the number of videos it will do daily on each site to around 10. The BBC’s agenda will be limited to news, sport, weather and travel and not the potentially commercially profitable areas of online classifieds, property and holiday listings and horoscopes.