There are around 260 analogue radio licences in the UK and they are currently owned by a grand total of somewhere in the region of 75 media companies. You have to include minority stakeholders to reach this ownership figure, obviously; but still, the overall picture is clear - looked at in a certain light, radio remains an incredibly fragmented medium.
And it follows, naturally, that it is ripe for consolidation, especially given a new regulatory regime that actually allows for substantially more consolidation and also given the fact that if Carlton and Granada can merge, the radio market can count on a similar stretching of the rules if and when it comes to that.
So far, so familiar. Observers have been forecasting a merger frenzy in radio since details of the Communications Act became clear many moons ago. The really surprising thing is that little has actually happened to date - and the standard explanation given for this is that the share prices among the existing big radio owners (Capital, Emap, SMG, GWR, Chrysalis) are overpriced. In other words, mega-mergers aren't really on the cards, which takes the heat out of the rest of the market.
But since Christmas something has been stirring. City analysts have been in speculative mood and that mood was given even greater impetus when Tim Schoonmaker, Emap Performance's chief executive, moved on. There is already speculation that he might be teaming up with the venture capitalist Advent International to front a move into radio ownership.
And last week Emap bought out SMG's minority stake in Scottish Radio Holdings, an owner of regional stations. Hints, maybe, of a green light?
Amber at best, Nathalie Schwarz, the strategic development director at Capital Radio group, responds. If the right opportunity comes along then well and good, but she doesn't see anyone forcing the issue: "Obviously, you look at every potential acquisition in terms of its valuation and if that is sensible and whether you can extract value. So if you're looking at the private equity market and potential standalone acquisitions, you have to ask if they'd be able to extract the sort of value an established media owner with existing radio assets would."
Schwarz is clearly implying that this market will be driven by the likes of Capital rather than the likes of Advent International. She agrees that the regulatory framework is now favourable but the economic outlook is less clear.
Phil Riley, the chief executive of Chrysalis, is more bullish. He says: "I, for one, think we'll see some activity this year - whether that's in three months' time or towards the back end of the year, I don't know.
What is for sure is that the radio industry is in unstable equilibrium - doing nothing is not a long-term option. We have significant digital investments that we have to pay for and marketing initiatives that we have to fund, plus pressure from the City. That can be paid for through consolidation."
He reckons that there are two threshold factors here: "We need to demonstrate to the City that there is a strong plan for digital and we are confident that its value will be factored in. A recovery in the ad market will boost radio stocks too. Those two things will contribute to a better year for share prices."
You might think that this is a double-edged sword - in a bull market, it's easier to get the resources to mount a takeover but, on the other hand, it makes takeover targets more expensive. Usually, though, in a rising market the first factor far outweighs the second.
What should the ad market think of all of this? Should consolidation be welcomed if and when it happens? Tim McCabe, the communications manager of Vizeum, points out that, in some respects, especially across important markets, radio is already pretty consolidated. He states: "When you look at the five big players, a lot of people say radio is turning into a national medium - others would say its strength remains its regionality. It's true that if you are planning a national campaign you can use a network of big city stations but if the medium wants to pull in incremental revenue, it should be looking to do that on a regional basis."
Jo Daly, a senior planner/buyer at MediaCom, is more positive. She comments: "One aspect of consolidation is you won't have rival media owners fighting for the same audience. Once they are consolidated, their various brands can't be seen to cannibalise each other. I think we see how the bigger groups manage themselves better. The different brands and the way they relate to each other would be sold in a more considered way and I think consolidation would lead to more calm and balance."
- "I think there have been expectations that we might see more in the way of asset swaps rather than big bang consolidation. But, yes, inevitably there will be consolidation at some stage, though there will be a tier of (smaller) owners with individual assets." - Nathalie Schwarz strategic development director, Capital
- "You may be surprised to hear that we believe that the share prices of radio companies are currently undervalued. Digital is a long-term investment that will bring a positive return, yet that is not being factored in." - Phil Riley chief executive, Chrysalis
- "Some of us like the fact that radio is regional and you can dip in and out yet develop strong relationships with the stations you use. It's also nice to have flexibility to have what you want when you want it." - Tim McCabe connections director, Vizeum
- "Consolidation would raise the stakes in terms of programming parameters and points of difference between different station brands. That would give advertisers much more choice in stronger environments." - Jo Daly senior planner/buyer, MediaCom.