Andrew Harrison’s Right to Reply speech

Speaking at The Radio Festival, RadioCentre CEO Andrew Harrison gave his reply to the previous day’s keynote speech by BBC Director General Mark Thompson.

Harrison was on a panel along with GMG Radio’s Stuart Taylor, Phil Riley from Orion Media and and UTV Radio’s Scott Taunton.

Here is the speech in full:

Britain loves radio because we enjoy the best radio services in the world.

This is the gift of our unique content model: a strong, self-confident commercial radio sector and a public service broadcaster which provides distinctive listening of real public value.

We have never been in better shape:

91% reach and 22½ listening hours each week – levels that any new media platform would die for.

Our content propositions are more compelling than ever. Radios 1, 2 and 4 are at the top of their game. Digital stations 6 Music and 4Xtra have come into their own.

And commercial radio has been transformed – popular national brands like Heart, Capital, Smooth and Kiss; digital innovations like Absolute 80s (as big as 6 music even without the threat of closure!), Fun Kids, Jazz FM and Planet Rock; a brilliant performance from TalkSport (The Sony Station of the Year); and local services which take the lion’s share of local listening.

Others recognise our value too: witness how record labels rushed to defend 6 Music and are abandoning their recent ‘on-air, on-sale’ experiment, as tracks struggle to get chart position without radio airplay.

This should all be cause for optimism. But the multitude of challenges we face mean it doesn’t always feel like that.

Our self-confidence and optimism is often tempered by the day-to-day reality of constant re-organisation, limitations on funding and uncertainty over radio’s future role.

But these challenges are shared. And as we heard clearly from Mark yesterday we will need to work ever more closely together in future. So here’s a response to that offer…

The most immediate challenge we all face is on costs.

Commercial radio is good at managing cost: from the dot com bust in 2001 to the credit crunch, followed by the collapse in spending at the COI, we’ve ridden a decade of cost pressure. Indeed, annual revenues in 2011 at £518m are £34m down on the total we achieved – £540m in 2001 – ten years ago.

Yet across that decade of revenue decline, we’ve grown market share, funded dual transmission, now enjoy record listener levels and have launched a succession of new services. That’s delivering quality first. Higher share, growing audience, radically lower cost.

Commercial radio simply had to respond. Having no guaranteed cash coming in concentrates the mind!

Groups have restructured – rebranding stations, to provide a more coherent offering for listeners nationally. Others have sharpened their local focus. The Radio Advertising Bureau has developed RadioGauge, measuring over 500 campaigns, as our award winning research tool to measure effectiveness

All have had to work harder than ever to provide a distinct and compelling proposition for advertisers. It’s a mindset to do more with less.

I say this to add some vital context (and a sincere offer to help) to the BBC’s challenges. While our sector has declined by £34m, the BBC licence fee has ballooned from £2.4bn in 2001 to £3.5bn today – 46% higher, £1.1bn more. Go figure.

Our business is in better shape for being radical. In that context, DQF is a real missed opportunity.

This is no radical mandate for change. Support for Radio 4, the Proms, the World Service is all politically astute. But the chance has not been taken to focus on fewer distinctive services.

Now, to be fair to Mark Thompson, I think he’s played a blinder: no service closures, manageable cuts, and by and large no public reaction.

Despite the efforts of some, even the reaction to the BBC Local Radio changes has been relatively muted. If that is the best protest middle England can muster across the whole of the BBC’s estate that’s job done. Move on!

But is that reaction good enough? –

We all know the way to save money and produce better quality is to stop doing what’s not working; be radical and re-focus back on the core. That’s the way to deliver real public value, and to deliver distinctive services.

Yet DQF is doing the opposite: no services will close; BBC local will become a networked music-led subsidised Gold network: Radio 4 can’t save a penny in 6 years on a £100m content budget.

Our amazing radio sector deserves a better thought out, more radical approach. This requires a mindset change towards partnership. We are first amongst equals with much to learn from each other – not a plucky underdog and wealthy benefactor.

Take Radio 4: we learnt yesterday that You and Yours – a daily one hour show – employs 25 production staff. Classic FM – an entire national commercial station – employs less than half that.

So, let me start with two partnership thoughts to demonstrate real radical thinking (building on the suggestion floated yesterday by Dee Ford).

BBC local has a content budget in 2017 projected at £120m p.a. Why not outsource that to the commercial sector? Not outsourcing a programme or two. Outsource some stations. Pilot it. Do it. 25% of TV is required to be made by outside production. What about BBC local radio? We’ll deliver the output for you – to a format consistent with your service licences, ad-free. That’s a solution that works for all: we get more scale; in fact we get a huge income windfall, the BBC gets focus and listeners continue to receive ad-free, high quality, speech-based local output, produced in their locality.

That approach might not work for everyone – but if we are truly to deliver quality first, truly to re-invent our wonderful sector fit for the next twenty years we need to be visionary and radical, not incrementalist and conservative.

We could start with co-location of BBC local and commercial radio.

Or here’s another idea, if you are worried about cuts in BBC local content, argue for one distribution platform. Why waste money on dual transmission that could be spent on content? DAB is perfect for county-wide BBC local stations (that’s exactly why it’s controversial for smaller local FM commercial stations) – so move fast to one distribution platform, save money and build content.

I know we can be radical together, because when we work together we are unbeatable –

For example, we have reinvigorated our joint industry bodies, providing new leadership and purpose.

DRDB has become Digital Radio UK, under the leadership of Ford Ennals. Digital listening will be close to one-third of all radio listening by Xmas

We have installed Jerry Hill to lead Rajar, introducing on-line diary measurement successfully this year.

And of course the Festival and Sony’s are being revitalised under John Myers.

Perhaps most significantly, Radioplayer, which I am fortunate enough to Chair, is now reaching around 6.7 million unique users, with almost 300 stations enrolled, and on-line listening is at record levels in last week’s Rajar.

Our joint approach to a digital future is also critical for the sector. We certainly can’t map our distribution future separately.

In the 90s, a lack of cross-industry planning resulted in today’s DAB muddle: a BBC committed nationally yet cautious locally; commercial radio divided by different start points: manufacturers confused. Not to mention listeners.

It will still take time to unravel…not least because of the Faustian pact which linked analogue licence renewals (the financial lifeblood of our local radio business) with DAB carriage.

Then there was the missed opportunity to integrate with DTV, which has left radio in the bizarre (and unenviable) position of being sandwiched between the porn channels and religious programming on page 2 of the EPG.

Lack of co-operation produced a muddle on content too. Instead of distinctive and complementary content, we saw convergence around the most sought after audiences as the BBC popularised Radios 1 & 2 and commercial radio finances were squeezed, while new stations wiped each other out (like BBC7 killing-off Oneword), while significant new operators like Channel 4 simply backed away.

So, when we don’t work together, we all suffer.

Now, the challenges we share are just too big to tackle alone in any case. That’s why we must help one another on costs; why we need to work together on platforms. The explosion in digital media and new models for accessing music are just the start. The penetration of screen-based devices, providing infinite choice and new functionality, will continue to revolutionise our business.

So, we need to combine the resource, might and intellect of the BBC with the commercial nous, creativity and adaptability of commercial radio, to make a powerful new force for radio. To identify new revenue streams and be radical in how we produce content for listeners.

We will still compete ferociously on content for audiences and we will continue to hold the BBC to account, as we should, on its services delivery or fair trading. But it does mean that we should now collaborate where we can on costs, on platforms, on the future of radio

Even when we ‘huddle together’ for scale, we’re small compared to Apple or Google. So, we must work closely together to survive.

It starts with local digital coverage: Government, mux owners and the BBC – an agreed tri-partite MoU on who pays what for digital coverage. Then, we will be able to move away from the endless debates about platforms that have plagued our industry.

Of course, it’s difficult work. Different stations have different demands, especially small local commercial players. But if we can reach a shared view of the future plan and funding for digital, we can then focus again on an inspired future for radio – at the heart of a digital converged world.

We need to continue to be radical: collaborate on costs, compete on content, align on distribution and together deliver a brilliant future for listeners. That alone will deliver sustainable lasting quality for our great sector, ensuring Britain still loves radio in 2022, digital or analogue, national or local, music or speech, commercial or BBC – one hundred years after radio first informed, entertained and educated us all.