Secret Scam

“Gross failure of senior management”… “Serious, repeated and deliberate breaches”… “Fundementally misleading and inaccurate”. These are not words you would wish to have used to describe your company, or the way it behaved regarding an Ofcom investigation.

The phrase ‘damning indictment’ hardly does justice to UK regulator Ofcom’s adjudication that’s just been released regarding the (almost defunct) radio group GCap Media, and its breaches of the Broadcasting Code in respect of their networked ‘Secret Sound’ competition.

I’ve read a few adjudications in my time (and been part of a few too!), but having just finished all 29 glorious pages of this particular one, I don’t even know where to start!! You can read it for yourself here… but be warned, this is like ‘hardcore regulator porn’. It’s dirty stuff and you may need a stiff drink and a lie down after reading it.

I’ll try not to recount the sordid tale in all its details, as I would need…well… 29 pages… but in essence GCap ran a Secret Sound competition across its One Network for 4 weeks. The problem was that the practise of deliberately putting callers to air with wrong answers to prolong the competition was agreed by a “Director” responsible for networked output. Basically listeners were paying on a premium line to enter a competition that they couldn’t win, and people within GCap knew this was going on. Oh dear…. Oh dear!

Some brave individual grassed GCap up and Ofcom launched an investigation. So did GCap. Only, apparently GCap's investigation wasn’t really very good and “… not thorough or extensive” with “… no formal or written report produced”. In fact, Ofcom thought that GCap didn’t take the matter seriously enough.

When they did finally issue a statement (4 months later!) on their corporate website, GCap said something like ‘Terribly sorry listeners... Didn’t mean any harm... No hard feelings?’ Actually what they really said was, that this was an “an isolated incident” and a “system error”, when actually they knew it was a little bit more than that. This part has really annoyed Ofcom .They said today in their ruling...

“For GCap to describe this deliberate and repeated unfair conduct as “an isolated incident” and a “system error” was fundamentally misleading and inaccurate and represented, in Ofcom’s view, an inept attempt at “news management” on GCap’s part. The fact that GCap’s Board had authorised the wording of this statement, and its publication on GCap’s corporate website, was a matter of serious concern to the Committee.”

Spin gone wrong! Very badly wrong.

There’s quite a comedic moment in this story which refers to the fact that listeners could get a refund if they wanted to... but as GCap only publicised this on their corporate website, and not on station websites... or on air, out of the 297,215 entries they received, they refunded... wait for it... a single listener the grand total of £2!

Ofcom’s tongue lashing didn’t stop there. They go on to say that they...

“... considered it wholly inadequate that GCap had demonstrated an unwillingness to disclose for several months the specific details and seniority of those responsible for the unfair conduct. This was the first case of its kind in which the behaviour of the licensee (or as in this case, the parent company acting on behalf of the licensees) had effectively hindered Ofcom’s investigation.”

Sweet Jesus!! Could this get any worse? Well yes actually. As a direct result of this hindrance, the fine was going be higher. Ouch. How high in total? Well how about £1.1 Million! There goes the Christmas Party... for the next 20 years!

The list of bad practice goes on and on... from allowing junior members of staff to run a huge network competition with no apparent managerial supervision, to no accurate record of entries, to lack of proper training, to the GCap board signing off on a statement that was ‘economical with the actuality’!

All of this resulted in a... “...significant breakdown of the fundamental relationship of trust between 30 local station and their audiences” which according to GCap is its “most valuable asset”. Funny way of showing it I guess!

So, as GCap is in its final throws as a company, with this rather ignominious end to its life, what can we learn?

Simple. Don’t con your listeners. In any way. It will come home to roost.

Meanwhile, new owners Global are having to get out their cheque book. And just in case there was any delay, on the front page of the ruling Ofcom have made it clear that cheques are “payable to HM Paymaster General”.

How very helpful.

'Networking' - A Trump Card?

As soon as UK media regulator Ofcom announced in February that it was relaxing the rules on the amount of local programming it required stations to broadcast, it was only a matter of time until the bigger radio groups took advantage of this. ‘Global Radio’ were the first out of the traps with the move to network all output across Heart, aside from breakfast, mid-morning and Drivetime. ‘Galaxy’ have kept local Breakfast and Drivetime shows, but networked everything else.

Next was GCap (soon to be Global, so they’re pre-empting the inevitable really) who announced a new 3 hour daytime show across the One Network, details of which are still a little sketchy to be honest! And recently the three Xfm stations in London, Manchester and central Scotland announced they’re going to network another three hours of programming on weekdays, taking the local output from 10 hours to 7 hours. Lots of smaller UK radio groups are also taking advantage of the rule change and going a step further to relocate stations in central ‘broadcasting hubs’, with the obvious economies of scale that this brings.

So far Bauer have resisted the temptation to go for any daytime networking, with their ‘In Demand’ evening show being the only real networked programme. So what’s the deal? Is this good for listeners… good for the radio station… good for advertisers? Who benefits?

Yesterday, at the Radio 3.0 Conference in London, outgoing GCap Chairman Richard Eyre had some thoughtful insights about networking.

"Piping in a mega-DJ from London would mean sacrificing the key element of local radio: localness. The economics of radio in 2008 will mean that companies will not be able to resist. But it's still handing over one of our best assets to reduce costs. The economics say delocalise. But the relationship says keep it local."

With comments like that, it seems a shame that he’s the outgoing chairman really. I can’t help thinking that despite the best efforts of some radio executives to convince me otherwise, it’s all about saving money in the short-term during an economic downturn, and not thinking about the long-term effect of stripping localness from radio. I’m sure Global Radio have in their top drawer a plan to turn lots of their newly acquired GCap stations into the ‘Heart’ brand. How long before we hear a station’s positioning change to … “Fox FM – The Heart of Oxfordshire”. And we all know what comes next.

It’s quite easy to be snobby about the quality of some stations when you have a portfolio that includes well resourced brands like Heart and Capital on your books. And yes, the quality of the smaller stations could be improved in many places. But is the answer just to network this ‘mega-DJ’ from outside the area. Surely investing in training and development of new talent and programming skills on a local level is a more important long term objective? Go to places like Liverpool, Manchester, and Leeds and imagine a world where Radio City, Key 103 and Radio Aire were pseudo-national stations with perhaps a local breakfast show as the only indicator of their true parentage. Sure you can use smoke and mirrors all you like to give the impression the output is ‘local’… but for me, you can’t beat the real thing. It doesn’t matter how good your smoke screen is, because local radio is best when it’s local… and not pretending to be local.

The next 12 months will see the inevitable ‘character-stripping’ out of many truly local stations, with some of their output replaced with no doubt well-produced, slick, but rather soulless programming. The radio landscape will be painted magnolia… designed to cause least offence, but not engender a reaction of any kind. Is this the type of local radio listeners want?

One of the great clichés about succeeding at programming a local / regional station is “Play the local card”. It seems that the deck is about to be rigged.

"Going... going... gone"; Global buys GCap

Congratulations to Global Radio. The ongoing speculation and deadline extensions led to the least anticipated announcement this evening that GCap Media is to be purchased by Global Radio for £375 Million. Not a bad price all things considered!

Now the questions will begin…

• What does this mean for DAB in the UK?


• Will Global reverse the decision to close stations like The Jazz and Planet Rock?


• What about the sale of the Xfm’s outside London?


• Will the new enlarged Global have to sell some stations to keep the regulators less worried about lack of competition in some markets?


• How will Heart and Capital approach targeting the London market so they don’t cannibalise each other too much and maximise share?


• Will all the stations be housed in one big super sized broadcast centre in Leicester Square… which isn’t really brimming with room as it is!


• What implications will this have on staff and how many potential job losses will there be? (We can expect a radical restructure… in order to realise all those much talked about synergies!)


• And the most important question of all… How will Fru Hazlitt be spending her reported £1 Million settlement for her several months work.

You’ve got to hand it to her. “Here’s my vision” she says. “Er…. No thanks” say the board. “That’ll be £1 Million quid then please” says Fru! Nice work if you can get it!!

No doubt there will be many column inches devoted to this during the next few weeks and months. As the stories come and go, I’ll try and pick out some of the more interesting programming implications of this commercial radio mega-deal and what the shape of things to come may look like.

Whilst Charles Allen may have a halo around him tonight and be heralded as the ‘saviour of UK commercial radio’ by putting its biggest group into private hands, let’s not forget this is the man who took ITV to one of it’s 'all time low' periods in terms of ratings, revenue and creativity. So, whilst Global is tonight living up to it’s bullish name… let’s see what things look like in 3, 6 and 12 months time.

But good luck Charles! We’re counting on you!

"It's Like Rain... on your Wedding Day"

Can this gift I received on the 9th May 2005 now be filed under 'ironic?'

Nice little plaque though, don't you think?!

The Big DAB Gamble!

This morning’s announcement by Fru Hazlitt, (CEO of GCap Media) that “DAB is not viable”, is quite a momentous moment. Far be it from me to dramatise further an already dramatic announcement, but this is huge.

You’ve probably read all the facts elsewhere, but to put this all in context, here are some of the headlines from GCap’s statement this morning:

- Closure of national DAB stations Planet Rock and The Jazz
- Sell all the Xfm stations outside London or hand the licences back
- Sell off stake in Digital One Multiplex
- Abandon Capital’s ‘2 ads in a row’ policy
- Call for the switch off of AM

This ‘defence plan’ as it has been called, is really a last throw of the dice for GCap (even if it’s Fru’s first throw at this particular table). Global are hovering ‘vulture-like’ and we’ll see what the next few weeks bring. But back to the DAB issue. The UK’s largest commercial player has come out and basically said, “We think DAB is rubbish and we’re bailing out while we can”. Is this right, or are they just responding to a difficult economic climate, cutting costs, and dealing with a legacy of investment and belief in DAB which bordered on religious fervour, from Ralph et al.

This kind of puts commercial radio in an awkward spot as they’re now very divided with Bauer seemingly doing well with The Hits, Smash Hits, Heat Radio, and Q Radio and ready to launch ‘Closer’ as a radio brand. (No coincidence the timing of the press release to herald the announcement of Ric Blaxill joining Bauer’s national digital brands! He actually joined a while ago but this bit of pro-DAB PR says to the world… “We’re still investing in DAB and doing fine thank you very much”!!) And Channel 4 constantly have to put out statements saying how committed they are to the 2nd national multiplex.

So let’s try and make sense of this all. I believe Fru’s thinking was that the best way for GCap to survive as a company was to do something dramatic. The City loves bold initiatives. You take a gamble and hope that the city / investors back you. The ‘red or black’ scenario is a common one and GCap has gone for a defensive option of cutting where it can save most… DAB. The net spend in 2007/07 was £8 Million. This, combined with the other measures announced will hopefully placate the city and investors enough to not be tempted by an improved offer from Global in the next few weeks. I thought the comment from Charles Allen on the Times Online was a good one: “You can’t shrink your way to growth”. We shall see.

The sad thing about all this is that all the papers tomorrow will write “DAB in Crisis / The End of Digital Radio / Digital Killed The Radio Star” etc. There’s no doubt that the economics of it are challenging, particularly at the moment, however there is still a belief from many within commercial radio (not to mention the BBC!) who fervently believe in it. So GCap backing out of DAB should be seen more in the context of a company trying to survive this year “It’s about the here and now” – (Fru Hazlitt), rather than sounding the death knell for a technology that is already in around a quarter of homes in the UK.

Let’s spare a thought for the people at GCap. It can’t be a great place to be today. Planet Rock and The Jazz are both really good radio stations staffed by people who want to make great radio day in day out. And the Xfm sell off will no doubt affect a large swathe of employees. Plus, I wouldn’t place much money on the newly re-launched ‘Gold’ surviving. It’s on AM and DAB… both platforms are on today’s blacklist. They’ll be a lot of good people going home tonight with rather glum faces.

Two final thoughts on what probably should have been about 5 postings! (Sorry!!)

Capital is ditching its ‘only 2 ads in a row’ policy. Last year that policy cost the company almost £6 Million. About bloody time!! It was never the ‘silver bullet’ it was trumpeted to be at the time and was a great demonstration on how to loose £6 Million a year with no tangible benefit.

And ‘Jerry’s Final Thought’ today… What a damning indictment of the post merger GCap / ‘Bernard’ era today’s announcement is. Talk about a public slap in the face. Actually - it’s more like a public flogging! (Except the perpetrators are exiting stage left with rather large cheques in their back pockets and no whip marks visible!)

This will go down as one of commercial radio’s biggest U-turns ever… and the history of this company is almost comedic if the real twists and turns were laid out for all to see. Let’s pause… take breathe… and wait for the next roll of the dice as we remember the words of American playwright Wilson Mizner…

"Gambling… The sure way of getting nothing from something!"

Capital - No longer Mullered!

The news of the departure of Programme Director of Capital 95.8 - Scott Muller – wasn’t exactly unexpected when it reached me today. Not because I had any inside information. Far from it. But the significant changes made by new MD Paul Jackson less then a fortnight ago only signalled one thing. The clock was ticking on Mr Muller’s reign. It was a pretty safe bet!

Having once sat in the (now seemingly vacant) hot seat of Capital PD, and been ushered to exit stage left slightly prematurely (in my opinion!), I’m sure Scott feels that his tenure was also cut slightly short. We’ll never get the opportunity to find out if his particular vision to move Capital to a more CHR sound aiming at 15-30 year old Londoners, will have won the day.

It seems a genuine shame that the person who was described in the GCap 2006 Annual Report (and named, several times no less!) as “… a world class programmer with the specific skills and experience to help us take the station to the next level” is no longer deemed appropriate to continue in that role.

What does today’s announcement tell us? That he didn’t succeed? That he’d reached the next level – job done? Not really. I think Scott did a pretty good job with the sound of Capital. As a 15-30 year old station, it’s quite well placed. Whether the strategy was right in the first place, and whether the “2 ads in a row” policy can be called a success is another question for other to judge! But the station still isn't back at number 1.

What this whole affair should really remind us of, is the fickle nature of the radio business generally and the pressure to succeed at the top. The “saviour” of a station one moment, can be the person moved on to do “special projects” the next. A reflection of their limited ability and poor recruitment? Or an indication that whoever "holds the wheel" at any given moment can change direction (and first officer!) to suit their own agenda? Take your pick!

With the wonderful Annie O' Neill appointed as Programme Manager, the hugely talented Sheena Mason continuing as Head of Music, and MD Paul Jackson having his hands firmly on the levers of programming, perhaps this combination will provide Capital with some much needed stability. Let’s hope the revolving door has now come to a halt.

“Regrets… I’ve had a few” or “Non, Je Ne Regrette Rien”

The final whistle has been blown, and time has been called on Ralph Bernard’s run as “Head Coach” (or CEO, as I’m sure he’s more frequently called) of the UK’s largest radio group GCap Media. It appears however, from early reports, that no Croatians whatsoever were involved in this exit.

So, looking back on his career – which is obligatory in these circumstances – what will we remember?

There’s no doubt that building up GWR to a company worth £262 Million pounds was a truly fantastic achievement. GWR really pioneered the principle of a ‘network’ of stations. They purchased mainly smaller market, sometimes underperforming stations, and applied an almost franchise-like approach to the re-branding and re-formatting of them.

Local control was limited, and replaced by a top down approach to doing things. (One employee once commented to me that working for GWR was a little like being a member of the Communist Party!) Centralized playlists, syndicated programming and generic production were perhaps a glimpse into the future?

However, it was the merger of GWR and Capital that was a defining moment in UK commercial radio, and Ralph was very much in the driving seat. Was consolidation necessary? For commercial radio to create some scale and be more competitive both with the BBC and other content providers… then yes, it was.

Was the merger a success? Well, it depends on how you measure success!!

The City always looks at shareholder value, profits and future growth. It does seem a little disappointing that at the time of the merger Capital was valued at £264 Million and GWR at £262 Million. The current Market Cap of the merged companies that formed GCap Media is £229 Million, less than half the value of the separate entities pre-merger. And as I write, the share price is at an all time low.

OK – media valuations have changed and there has been a downturn in the advertising economy in the last 2½ years, but still…

Culturally, the merger was difficult. (I was there at the time and trust me... it was difficult!). GWR and Capital had very different ways of doing things both in terms of management and programming, and bringing these two monolithic cultures together was always going to be a bit of a minefield. Ralph said to The Guardian in July 2006… "We unquestionably misjudged the culture difference between the organisations”

There were accusations of a ‘putsch’ as the number of senior roles in the newly merged company seemed to all go to former GWR executives.

However, over time the dust inevitably settled and although always a favourite for media commentators to ‘have a go at’, GCap Media remains intact… for the time being! But who will be handed the unenviable role of steering the company through the choppy waters ahead? The smart money is on Fru Hazlitt, the feisty former CEO of Virgin Radio who now occupies the role of boss of GCap’s London portfolio.

So farewell then Ralph. It’s been emotional. Please select your swan song…

"To Network or not To Network... that is the question"

There's been a flurry of activity in the networking world of late. Maybe it's the season for it.

First, Guardian Media Group announced that they are networking Mark Goodier's show across the majority of their 'Smooth Radio' stations. Then GCap Media trumpeted the arrival of Ryan Seacrest to the One Network with the promise of an entertainment show like no other on a Sunday morning.

For programmers, the options to "import" programming from elsewhere has always been there. I remember the exciting task of having to be the T/O for "Rick Dees Weekly Top 40" on Radio City in Liverpool on a Sunday evening... loading up the 1/4 inch tapes... and hoping I was playing them in the right order. Invariably listeners got to hear the Top 10 during the first hour and numbers 25 - 40 during the last hour, but no-one seemed to mind that much. The point was that there was "An American on the radio in Liverpool... WOW!"

Does having a big name on you radio station do anything for listeners? What do they think of these networked shows? Do they care that it's not local?

Essentially we're dealing with 2 different things here. The 'networking' of live shows, and syndicated programmes, but both have a commonality.

The debate about networking seems to have died down a little of late. The harsh economic factors and the economies of scale that networking brings seems to have won the argument... for the time being. Many GCap and EMAP stations both have networked shows across evenings and countless smaller groups send out programming from a central hub. Kiss do it across certain daytime programmes and now Smooth. I've no doubt that adding Mark Goodier to a line-up of a local station is a smart idea. His show is really starting to sound good of late, and I'm sure the listeners will appreciate having him on their 'local' station. Do they care he's not sitting in their town or city? Probably not.

And what about getting a big American star to spurt forth inconsequential entertainment froth on a Sunday morning? Will it be better than what was on there in the first place? Probably... yes.

Listeners understand a global perspective more than ever. They don't really care that their local show, broadcast 10 miles down the road, is followed by a show that was made 10,000 miles away. As long as it's relevant to them and engaging to listen to. The internet has made the world a much smaller place and their is no longer a 'Wow' factor with 'Americans on the radio' or programming that has been sourced elsewhere. People are accoustomed to media from all sorts of sources. It's part of their media-scape now.

However, with every silver lining, there is a cloud.

Evening shows in UK local radio used to be the breeding ground for lots of great talent, who were able to try out their zany style of radio to an audience of 15 year olds, who inevitably would be the morning radio consumers of tomorrow. Too much networking lessens the chance of some of these guys getting exposure.

"Yes - but there are far more stations for them to work on now" I hear you cry! Sure, but it's much harder to get a break doing the evening show on Radio Scrot in Bollockshire than it was to get a break doing the evening show on a station like Radio City in the 90's.

I hope we find a balance in the UK between enough local programming and good quality, well produced 'imported' shows. I'm confident we will.

And I look forward to tuning in to Mark Goodier's networked offering just to remind myself that "... he' the man who's got the best music... Mark Goodier... Mark Goodier... wha-ooo..." etc etc...

The Heroes of RAJAR - Qtr 2 2007

As the dust settles on another batch of RAJAR press releases and UK radio stations draw up the list of people to promote... or fire, it's time to pick out the villains and heroes... and no, not the flying senator, or indestructible cheerleader types.

There were a few main stories that are worthy of mention.

Kiss overtake Capital
Congratulations to the guys at Kiss, who have finally caught up with Capital. We've certainly discussed the possibility of them catching Capital before on this blog, and now it's happened. With Kiss at a 4.5% reach and Capital dropping to 4.1% and the reach neck and neck at 1.51 Million, there were probably two very different meetings taking place at the respective stations on RAJAR evening last week.

Kiss's offering continues to sound fresh and connected to young London and the new morning show with Rickie and Melvin is starting to take root. For me, Capital's issue is not with the execution of the format. They've gone young and the product sounds fine. No, it's the strategy that I find difficult to understand. Capital seem to have left Heart and Magic to slug it out at the top, while settling for trying to pick up Radio 1, Kiss and Xfm listeners along the way. The move is bold... but I can't help thinking it won't get you to Number 1 in London again. The team in Leicester Square have a real battle on and I hope Steve Orchard's words of August 2006 where he the "believed the station had hit rock bottom", don't get rolled out too much over the next few weeks. The city certainly gave GCap a good kicking, with quotes like "GCap has marketed Capital in this quarter, so there can be no excuses for these results!" Ouch!

The Jazz... Nice!
Debuting with 334,000 listeners is a pretty nice job! Taking a listen to the station, the formula is the same as has been applied to Classic FM; take a specialist music genre, and make it as accessible to as many people as possible. Classic FM took the fear out of listening to classical music... and The Jazz will do the same for Jazz.

More for Moyles
If I was sitting in GCap Towers... or even EMAP towers for that reason, I'd find the biggest pot of money I could lay my hands on and send it all to Chris Moyles on the condition that he came to a daily show for the network I was running. (Believe me... it's been thought of!) His show goes from strength to strength and is testament to hard work, good production and 'letting the talent get on with it'. With 7.26 Million listeners a week, he can play his "Saviour of Radio 1" jingle as much as he wants now!

The Future is... Digital
More people are listening to radio and more are using digital technologies to do this. 2 Million 15-24's listen on mobile phones and almost 13% of total listening by all adults is now done on either DAB, DTV or the internet. Let's compare this figure in 12 months time to see the continued growth, and then factor in the Channel 4 effect too!

So, as ever... always something interesting to mull over. Now if only we knew someone who could paint the radio future... Hmmm... I wonder...

Forgive Me Father...

"Forgive me father for I have sinned. It has been 28 days since my last blog."

The combination of summer holidays, extremes of weather, a glut of foreign trips and 2 small children, meant that I quickly developed a back-blog!

There has been so much to write about, instead of long, well thought out articles (some of the time, anyway!) here is a selection of topics from the last 28 days, worthy of greater discussion, but limited to a short comment! In UK news...

RAJAR's here again

More squabbling predicted for tomorrow and a big prize for the best excuse!

GCap fined for phone in competition

There must be a lot of nervous programmers currently hoping that the rather dodgy practises that have blighted commercial radio for many years are not exposed!

The new national UK Gold network is called...

Erm... "Gold". A missed opportunity and lack of creative vision? Hmmm...

And general topics...

Spend time with your jocks

Programme Directors get caught up in all sorts of bollocks! If it means you spend less time with your presetners, try and put a stop to it!!

Don't let the competition change your strategy

If a competitor sharpens up a bit and start to use a few new tricks, don't let this change your focus or even worse, your strategy. If what you're doing works, keep doing it. Sure, tweak at the edges, but don't knee-jerk.

If you commission research, and pay for it... and it looks good... use it!

Don't buy research that you belive in, and then if the results don't quite match up to what you expect, ignore it! Yes, bad research will give you bad results... but if it looks good, resist the temptation to be selective!

Wow. It's a lot easier this way!

There we go. I feel my visit to the 'Blog Confessional' has got a few things off my chest.

Thank you Father.