Having previously shown considerable sure-footedness in media
matters, the Labour Government is surprisingly out of step when it comes
to the future of commercial radio in Britain.
Its reaction to the Monopolies and Mergers Commission’s report on
Capital’s abortive bid for Virgin Radio is blinkered and doesn’t bode
well for the growth prospects of a dynamic medium.
The effect of the insistence of Margaret Beckett, the President of the
Board of Trade, that radio should be regarded as a separate economic
market for competition purposes will be to force it to fight with one
hand tied behind its back. Radio stations will have to compete among
themselves for share of a finite market, rather than present a
formidable collective competition to TV, posters and cinema.
Beckett’s argument that allowing radio groups extra critical mass would
push up ad rates doesn’t hold water. The big advantage of radio to
advertisers is that a campaign can be put on air quickly, with a minimal
amount of pre-planning. The downside is that advertising can be pulled
just as quickly and the revenue lost to rival media.
Beckett has interpreted the MMC report too narrowly and should look at a
wider media picture.