Media Perspective: Hazlitt's departure could prove a major blow for Virgin Radio

The fightback has begun. Like a knackered old champ gasping for breath on the ropes, the UK commercial radio industry is once again throwing punches.

After a grim 2006 for commercial radio, it has set itself, in the words of Andrew Harrison, the Radio Centre chief executive, "tough, but achievable targets". These confidently include knocking out the BBC by eventually building a 50 per cent share of analogue listening (commercial radio currently has 43.6 per cent) and a 75 per cent share of digital listening.

It seems bad news then for commercial radio, that this week it has lost one of its biggest hitters. Fru Hazlitt, the chief executive of SMG Radio and Virgin Radio and a great public face and presenter for the brand, stepped down from the role 18 months after joining from Yahoo!, to look for a new challenge. She was replaced by Paul Jackson, Virgin Radio's programming director.

Sources suggest that she may well return to the industry, with the option of fronting a bid for GCap Media - a distinct possibility. The SMG Radio job might have once held the possibility of offering Hazlitt a route into running a UK media plc, but this hasn't happened. Despite the departure of the SMG chief executive, Andrew Flanagan, last year, ongoing merger talks with UTV have only muddied the waters.

There seemed to be other frustrations for Hazlitt. Virgin Radio's AM frequency is seen by some as holding back its national station, and she saw little point in bidding for new FM licences, given the growth potential of digital radio. In light of this opportunity, some sources suggest Hazlitt was also frustrated at a perceived lack of investment from SMG and constant pressure to build the business despite this.

Under Hazlitt, Virgin Radio has prospered, despite delivering unspectacular listening figures (in the year to September 2006, its FM London share was static and its national AM share and reach fell). Hazlitt enjoyed a tough few months initially, restructuring and cutting costs, but the changes in programming at the station and the development of an online strategy have gone down well with advertisers.

Jackson has improved the programming, with the breakfast show host Christian O'Connell now in place for more than a year, and under Nick Hewat, the sales director, Virgin's commercial team seems to have a strong reputation in the market.

This helped it outperform the radio market in the first half of the year, increasing its radio revenues by 5 per cent to £11.1 million, so at least Hazlitt leaves it in relatively rude health. If Hazlitt does return to the industry with a rival radio group, her departure will be a blow for Virgin, otherwise, it may hit the whole radio industry - which certainly needs its leaders right now.

ian.darby@haymarket.com.

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