Media Perspective: Radio looks to an analogue future as Britain goes digital

The comeback kids are in town. Sir Richard Branson and Kelvin MacKenzie both want to return to radio and have expressed an interest in bidding for the national analogue radio licences owned by Absolute Radio, Classic FM and talkSPORT.

The prospect of a Virgin relaunch should come as no surprise given that Branson and his team held on to the name despite selling their station to the Indian owners of Absolute Radio last summer. MacKenzie, who did rather well out of selling talkSPORT to UTV, is said to be considering a return with a speech-based format.

A Virgin comeback, which it hopes to work by winning one of the licences due to be auctioned by Ofcom in 2011 and 2012, would probably not be great news for Absolute, already on the back foot after losing some 500,000 listeners in the final quarter of 2008.

And though the current incumbents only pay between £50,000 and £100,000 a piece for each of the licences, it would be harsh on talkSPORT if they were to lose out to new entrants.

TalkSPORT is a brand that has not always been flavour of the month in the advertising world - its reputation stands comparison with Sky's early days as "council house TV" as it's become tarred with the "taxi driver station" brush. Yet this caricature ignores the fact that talkSPORT and its roster of professional presenters and famous sports stars (recently augmented by the former cricketer Darren Gough) have quietly ground out a winning formula. It posted a record audience in the last quarter of last year - its 2.5 million listeners easily eclipsing Absolute's performance.

Advertisers are starting to love talkSPORT and despite operating in a tough climate, the station now has momentum. UTV says that it will continue as a digital-only station if it were to lose its licence in a tendering process, but it seems nonsensical that it should even have to face this prospect.

While it is by no means certain, as the Government completes work on its Digital Britain blueprint, that the licences will be auctioned again ahead of digital switchover, Andrew Harrison, the chief executive of the RadioCentre, says: "It seems illogical to have an auction of analogue licences when we are trying to go digital."

Absolutely. But then the Government is still prevaricating on setting a date for analogue switch-off in radio (though Digital Britain may implement some kind of timetable). The powers that be need to make a firm decision and then potential new entrants can work out whether they fancy entering the digital fray. There's not much to be gained for anybody, except a couple of already wealthy individuals, in auctioning off analogue licences that should be wound up rather than sold to new owners who will have to start from scratch.