Culture, Tourism, Europe and External Affairs Committee

Meeting date: Thursday, March 14, 2019

Official Report 633KB pdf

---

Local Commercial Radio

The next item is an evidence session on local commercial radio. I will provide some context before we begin.

At our meeting on 28 February, members requested an evidence session on Global Radio. That followed an announcement on 26 February that Global Radio would be reducing local programming across its stations, which are Capital Scotland, Heart Scotland and Smooth Scotland. The decision will reduce the number of breakfast shows that are broadcast across Capital from 14 to one, across Heart from 22 to one and across Smooth from seven to one. Local drivetime programming will also be reduced across the UK on all three stations, including from 14 shows to nine on Capital and from 23 to 10 on Heart. All local and regional weekend programming will end.

In Scotland, Capital, Heart and Smooth will broadcast the new UK-wide breakfast show and will lose regional weekend programming, although Global Radio will produce and broadcast regular news bulletins throughout weekdays.

Drivetime shows from 4 pm to 7 pm will be the only local and regional programming that is broadcast on Capital Scotland, Heart Scotland and Smooth Scotland. Capital Scotland will be the first to end regional breakfast programming and will broadcast its UK-wide breakfast show from 8 April.

The announcement follows changes by Ofcom to the licence obligations of those commercial radio stations.

Today, the committee will take evidence from Corrie Martin, the news editor for the regions in Global Radio; and Will Harding, the chief strategy officer of Global Radio. I invite Mr Harding to make a brief opening statement.

Thank you for giving us the opportunity to talk to you today about the announcement that we made on 26 February.

We operate two stations in Scotland: Heart, which broadcasts across the central belt; and Smooth, which broadcasts in Glasgow. If you include UK-wide stations, such as Classic FM and digital stations such as LBC, Radio X and others, all our stations combined reach 1.4 million adults every week. Our market share in Scotland is 14 per cent; by comparison, the BBC has 43 per cent of radio listening and Bauer, which is the leading commercial operator, has 28 per cent.

As you said, convener, we recently announced that we are launching three UK-wide breakfast shows on Heart, Capital and Smooth. In Scotland, Global Radio will be launching the new UK-wide breakfast show on Heart Scotland and the new show on Smooth Scotland later this year.

Capital Scotland is not owned by Global Radio; it is owned by another company, Communicorp UK, which licenses programming and the Capital brand from Global Radio. Communicorp has announced that it will be broadcasting the new UK-wide Capital breakfast show when it launches in April.

As you said, we are also launching new local drivetime shows across the UK. We are also reorganising some of our commercial operations at the same time.

As you mention, the changes follow Ofcom’s publication of its new localness guidelines last October. They allow stations to reduce the number of locally made programme hours from seven to three per weekday, and they remove the requirement to broadcast a local or regional breakfast show.

The UK Government first proposed five years ago that the legislation for commercial radio regulation should be updated. There have been a number of public consultations to consider the various options since then, including ones run by the Department for Digital, Culture, Media and Sport and Ofcom.

The old regulations that were in place before Ofcom changed the guidelines last October were all based on legislation from the 1990s and the early 2000s. The last significant change to those regulations was nine years ago. An awful lot has changed in our industry in that time. Obviously, we face competition for listeners from the BBC and from other commercial stations, but all radio stations are increasingly facing competition from internet and streaming services such as Spotify, Amazon, Apple and YouTube, and that change is happening at a fast pace. It is therefore imperative for us to invest in our future. If we do not do that and we do not get it right, there is every risk that radio—particularly local and regional radio and radio in the nations—will simply lose its relevance for younger listeners.

10:00  

We regularly ask our listeners what they value, and all the research shows that local news and local information, such as traffic and travel information, weather updates, and information about school closures, are the local and regional content that they most value, and that that local information and news are much more important to them than where the presenters are based or where the studio is located.

The changes that we announced in February will have no impact on the local news or on the traffic and travel and local information that we deliver, which are managed in Scotland by my colleague Corrie Martin. We remain committed to delivering high-quality local news on all our local stations. We know that listeners value those things most, and we are investing more rather than less in that area. Through technology that we have developed, we have the ability to customise the news information that we broadcast, irrespective of where the presenters are based and where the programme is made. We can do that throughout the day. Presenters in the studio—wherever that is—can read links and provide information that is directed at one transmitter in the country. If we want to, we can insert additional local news bulletins where it is appropriate to do so in the schedule. That is how we will remain relevant and responsive to listeners.

The decisions that we made were not easy and we did not take them lightly. We are very mindful of the impact that they will have on our people—our presenters and our employees—and of the concerns of stakeholders not just in Scotland but across the UK about retaining locally relevant content on commercial radio. However, we believe that the decisions are the right ones for the future of our stations and to protect the long-term future of our business. We have to grow our audiences. They are the life-blood of our business. Without audiences, we have nothing.

Thank you very much, Mr Harding.

I remember when Capital got its licence back in 2011. I believe that Paul Cooney was the managing director at that time, and I remember having discussions with him. There was a big emphasis on all the local content that would be provided and the very distinctive nature of the broadcast option for Scotland. Now that you have built up your audience in Scotland and used Scottish talent for the brand, you seem to be ditching all of that.

I am not sure that Paul Cooney was at Capital. The Capital Scotland licence is not owned by Global Radio—it is owned by Communicorp UK—and it has broadcast under a number of different brands over the years. The local programmes that are broadcast on our stations—Heart Scotland and Smooth Scotland—and Communicorp UK’s Capital Scotland changed in 2010 following deregulation, which introduced additional opportunity to network across the UK in daytime. Nothing has changed since then to the amount of local programming and locally produced shows that are broadcast.

That will change because you are dropping them.

Yes—as I said, nothing has changed for the past 10 years until now. In February, we announced that we will broadcast a UK-wide breakfast show, so the number of locally produced hours from Monday to Friday will fall from the current seven hours to three. The breakfast show lasts for four hours and the drivetime show, which will remain locally produced, lasts for three hours.

However, you will be offering fewer distinctive local voices. You talked about the surveys that you have done. I used to listen to the breakfast show with Des Clarke because my teenage daughter listened to it. He has a very distinctive voice, and we would not have listened to the show had it not been for him. I understand that he will be going. Is that correct?

Des is moving from Capital to Heart to do the drivetime show.

He will not be there in the mornings any more.

That is correct.

When you did the survey of listeners, did you specifically ask about Des Clarke and your other presenters on the breakfast shows?

No. We would not have named presenters. We would have asked—

That was not a flippant question. Des Clarke is a distinctive voice and a very Scottish voice, and a lot of people will have come to the station to listen to him in the mornings. Someone who is very much a part of culture in Scotland is now going.

I am sure you are right to say that he has a very strong following in Scotland.

The three stations that we are talking about—the ones that are owned by Global, and Communicorp’s Capital station—have broadcast a mixture of Scottish and UK-wide programming for a long time. When we look at the audience data and the performance of the stations at different times of day when they are running local programming or UK-wide, network programming, there is not the gap that you suggest between—

The point that I am getting to is that there is a difference between asking people general questions about where presenters are based and asking them, “Do you like listening to the Des Clarke show?” That show is a distinctive Scottish offering. In a way, you have asked questions in such a way that you have got the answers that you were looking for.

No. We ask questions because it is fundamental to our business to deliver programming that is popular with listeners. If we do not have listeners, we will be out of business very quickly. When we do research, it is not an exercise in politics or in managing the regulator. We genuinely ask questions to find out what is important in our programming mix, and the regulator, Ofcom, also does research. As part of the extensive consultation that I described, it asks listeners across the UK which aspects of local content they particularly value and what makes them choose a commercial radio station.

I am absolutely not saying that there are not listeners out there who value having a local presenter. There are. However, when we talk to all listeners, they say that the number 1 thing that they value about local content is local news. Local presenters come some way down the list, well below the music that the station plays and whether they regard the presenters as entertaining. I am not for a second suggesting that a local presenter need be less entertaining than a national presenter; that is by no means the case. However, a consistent finding of our research and Ofcom’s research is that, when asked, listeners say that they value local news and local information above other local features of commercial radio stations. The location of the studio and whether the presenter is locally based or from the local area are factors, but they come quite low down on the list.

How much money will you save as a result of the changes?

In Scotland, the changes in costs are very modest, and they are all around people. I am happy to answer specific questions on that, although I do not want to go into too much detail about individuals.

I will give the detail on Scotland in a second. However, the material cost saving is not in Scotland but in England, where we are combining broadcast centres. Ofcom has created larger regions across the UK and, as part of the new guidelines for commercial stations, it is allowing the sharing of local programming between stations in those larger regions. We have announced that we are reducing the number of our broadcast centres in England. We are not making changes in Scotland or Wales.

Our staff and presenters in Scotland are affected—absolutely. As I said, we have not taken the decision lightly. When the changes to Heart and Smooth, which will happen later this year, are put into effect, we will move from having six presenters, with two on breakfast and one on drivetime on each station, to having two presenters across the two.

Our current head count of employees in Scotland is 34 people. There is one vacancy, so there is one fewer person. That does not include our presenters, who are freelancers. Once we have made all the changes—we are currently in consultation about them with our employees—we will have 33 employees in Scotland, so the change in head count will be one. Because the consultation lasts until the end of the month, we cannot read into that that only one person will be affected, because job roles will change as well.

You talked about listeners. I do not know whether you have had a look at the Facebook page for Capital Scotland. You have explained that you are not making the decision for that station, but you are making the same decisions for Heart and Smooth. You have applied to reduce the regional content and you are going to have a more centralised breakfast show.

There are a number of comments under the announcement, including

“Capital Scotland my arse why not just call it Capital London”

and

“They’re trying to London-centric everything. No local input. Cost cutting.”

Someone says:

“Heart’s breakfast show is only going to be English now too ... Global clearly have no idea why people in Scotland actually listen to Capital in the mornings”.

That does not sound to me like a happy audience. Are you expecting the same response to the changes that are being made to Heart and Smooth?

One of the wonderful things about the radio industry—I used to work in digital media, and before that in television—is the passion for the medium not only among the people in the industry but among the listeners. When we announce any change, whether it turns out—

I cannot find anybody welcoming the changes. The number of comments is up to 685, and more are coming in daily.

We recognise that people have strong feelings. I am not for a second going to suggest that there are not people out there who are disappointed with the decisions that we have made, but I suggest to the committee that we are not, prior to the launch of a new show, going to have people posting on Facebook saying how great the new show that they have not yet listened to will be. Inevitably, those who are particularly fond of our current shows will express their disappointment that they are ending. That is just something that we have to accept. Clearly, people will express their unhappiness, and that is to be expected.

You mentioned 685 comments, but Capital has many hundreds of thousands of listeners in Scotland. People have strong feelings. Clearly, it does not make my life any easier when people make those comments, but they are entitled to do that. It reflects the passion that people have for their stations.

Currently, when you have a competition, a phone-in or a comment section, people hear Scottish voices on the radio. Will the new programmes have that level of Scottish engagement? Will there be that direct engagement with a Scotland-based audience?

Inevitably, in a network show that goes out across the UK, you will hear fewer local voices. That goes for wherever in the UK you are. It would be churlish of me to sit here and pretend otherwise. However, I go back to the main point that I made, which is that our audience research tells us that the local content that people really value is local news and local information, and that is not changing.

You claim that there will be no impact on local news. I find that hard to accept. Will the length of news bulletins remain the same? The Ofcom guidelines seem to me to be pretty flexible on the balance of national and local content. I think that the guidelines say that there should be at least one local news bulletin. However, given how you are behaving at the moment under those guidelines, it sounds as if you will go for the minimum, in which case we will be fortunate to get even one. Moreover, concerns have been expressed about how responsive or reactive your news bulletins can be.

10:15  

I will answer the broad question and then I will hand over to Corrie Martin, who manages all news operations in Scotland.

The production of all our local news bulletins is entirely separate from where the presenters are based, and the location of the presenters has no bearing on where the news is gathered or where the bulletin is broadcast from. We are not changing our news bulletins; there will continue to be the same number of local bulletins, which we provide throughout the daytime from 6 o’clock in the morning until 7 pm Monday to Friday, and at peak times at weekends. I have already mentioned the changes to our staffing in Scotland, and we are increasing the news team by one person to ensure that we continue to deliver bulletins.

Corrie Martin will be able to tell you about our responsiveness and the number of Scottish and local news stories that we deliver.

We are hugely proud of our commitment to localness in the news. My interpretation of what you said, Ms Baker, is that the requirement is for one local story in each bulletin, but most of the time we go well beyond that. Our bulletins are by no means England-centric with a Scottish story shoehorned into them. I have a team of six, which is going to become seven, and we punch hugely above our weight in what we deliver to the three brands for which we provide coverage. We also talk about what is happening around our transmission area—it is not a case of our saying, “We’ve got a local story in there.”

For example, we recently had one of our reporters speak to you and Ross Greer about your report on the Glasgow School of Art fire; we have been following what is happening with Ferguson’s in Mr McMillan’s constituency; we have talked a lot about Paisley’s attempt to become city of culture; and we were up in Dunblane when Andy Murray announced his retirement, which we now hope will not be happening so quickly. We cover all the big stories as well as what is happening day to day.

When the Glasgow School of Art went on fire for the second time in four years, I was at the scene through the night, delivering bulletins that were going right across our network on all our stations in Britain that broadcast news through the night. We have followed the story from its genesis to where it is now, highlighting the impact on local businesses as well as on local people who had to be evacuated from their homes and could not get back in again for a lengthy period.

We care enormously about super-serving our audience and we do that daily with great commitment. I am hugely proud of the team that I lead, who are a hugely hard-working and dedicated bunch who care very much about what we not only need but want to deliver. Such situations come up regularly. For example, when the grass went on fire on Arthur’s Seat, we were tracking down and speaking to witnesses at 11 o’clock at night to make sure that we had audio for our breakfast bulletins from 6 am onwards and people had first-hand accounts of what had happened. The developments in technology over recent years have made that sort of thing much easier because we can get broadcast-quality audio from anywhere in the world with WhatsApp and smartphone voice recorders. We use that technology every day. It is very much about serving our audience, not about ticking a box.

In the current set-up at breakfast time, the Scotland-based presenter can comment throughout the show on, say, school closures because of poor weather, disruptions because of a bad road accident or something like the Glasgow School of Art fire, which was a huge story. We would expect the presenter to have some interaction with the news reporter or to continue talking about the story, but that will no longer happen because you will go to a networked show. There will be no interaction between the presenter of that show and what has been said in the Scottish news bulletin. You argue that you will still present a robust Scottish news bulletin—you have put that case—but there will no longer be any interaction with the presenter of the main show.

The interaction between the newsreader and the presenter, in terms of discussion of a story after the headlines or a news bulletin, tends to be fairly minimal.

A number of options are open to us for underlining things that are happening at the top of the news bulletins. If we are in a networked programme, we can provide the presenter with information. They provide what we call split links, which Will Harding touched on earlier. That means that they record the information and it gets fired out just to the relevant transmission area. They will do a link for us in Scotland, whereas something different will go out on the rest of the stations in that timeframe, and they can update the information throughout the show. We also have the capability to record additional short-burst information that can be dropped into the schedule.

If there is a major situation that merits it, we can pull back fully into local programming. For example, I look after the north-west region news-wise—I manage the news editor there, as well—and when the Manchester terrorist attack happened, they went into local programming and we were able to super-serve the audience on that. That option absolutely remains open to us.

Okay—thanks. I ask you to keep your answers brief, because a number of other members wish to ask questions.

Sure.

I welcome George Adam MSP to the meeting. Do you have any relevant interests to declare, Mr Adam?

No, apart from the fact that I listen to independent radio from time to time.

We have been talking about news output. What is the total current minuteage of Scottish news on Heart Scotland? How does it compare with what there was when Corrie Martin started at Real Radio, which was in effect the same station, in 2005?

I cannot give you that number off the top of my head. I will have to come back to you on that.

I can give you the answer.

Please do.

There is 30 per cent less than there was when you started at Real Radio, so how can I take Global Radio’s position seriously? You say that you are investing in local news and Mr Harding said that it is one of the key things that people find extremely important when they listen to local radio, but how can I take what you say seriously when the comparison shows a 30 per cent deficit over the time that you have been working at the radio station?

As Corrie Martin says, we do not measure things in that way. When we ask listeners what they value most on a radio station and what makes them choose it, the first thing is the music, the second is whether the presenters are entertaining and, typically, local news and information soon appear on the list, although I am not sure whether they are third. However, when we ask people about the station that they listen to and whether they want more music or more speech, because we try to deliver what they want as much as possible, the most recent research—

I am not looking for commercial radio to do in-depth news programmes. I am just saying that there has been a 30 per cent cut in news at that particular station during that period. What I am asking is how we can have less when there is already less. I know that, if I am interviewed for one of your stations, I will probably get a bigger audience and less time. I know that that is how the news works, but the point is that you seem to have cut what little you had to even less.

I was trying to make the point that we have to make a difficult decision to balance the mix of content that we broadcast on our stations. Our programming colleagues who make the decisions have to find the right balance with regard to what our listeners want—they have to get that mix right.

I was going to say that the sometimes difficult truth is that, when we ask our listeners whether they want more speech or less speech and more music or less music, they tell us that they want more music. If we gave them exactly what they want, we would continue to cut speech. Equally, however, we know that they value the fact that local news and information is there. We have to make those decisions on the mix between music and entertainment content and more serious news content. It is the job of our programming colleagues to make those decisions.

You said earlier, rather flippantly, that audiences do not care where presenters are based. I would argue against that, because various companies that are involved in commercial radio in Scotland have a number of brands that are strong in their local area. I listen to “Bowie at Breakfast” on Clyde 1 because he speaks with my voice and he speaks for my community. I do not necessarily care what studio he is in, of course; the point is that he speaks with our voice, and that is why we listen to him.

That issue is also important in relation to people who have been involved in radio in Scotland who have used commercial radio as their launch pad. Clyde 1, for example, has produced Ross King, Tiger Tim, former anchor of “BBC Breakfast” Bill Turnbull, Dougie Donnelly and Capital’s own Richard Park, and that will have been repeated at stations throughout Scotland. If you take away the key breakfast slot that those individuals had the opportunity to get involved in, where is the Scottish voice going to go, and where is that traditionally Scottish audience going to go?

I did not say that they do not care and I certainly did not intend to be flippant. What I said was that the location of the studios and presenters comes quite low down on the list of factors that our listeners tell us influence their choice of radio station. I did not say that they do not care; I said that it is less important to them than other factors.

I think you are making a broader point, which I agree with, about where the opportunities are to develop talent in the industry. You gave a long list of famous names in the industry who started in local commercial radio. There is no doubt that finding ways of nurturing such talent is a challenge for the industry. Realistically, however, none of those individuals got their first gig broadcasting on a breakfast show, because that is not where people learn their trade; it is where people go when they are successful and experienced broadcasters.

I agree that it is a challenge for the industry. I think we have to look at the radio sector in the round, including community radio, digital stations, podcasting and streaming services, to ensure that we have that throughput of talent coming into the sector.

But where do you find that local voice? As I said, I listen to a specific presenter on a morning show because he appeals to me. I like his patter and his sense of humour is similar to mine, even though he is from Greenock. George Bowie is entertaining, and I agree with your listeners on that. He has done that job for 20 years or more. Where will such voices go if stations start cutting programmes such as his and you end up getting some great person in a London studio presenting the show to Scotland? People would be as well listening to the BBC or something like that. At that stage, you lose the whole point of radio.

10:30  

The truth is that there are more opportunities to access more content—speech and music based—in Scotland than there have ever been. The names that you listed started their careers in an environment in which there were a handful of radio stations in Scotland, and those were the only places they could go to. Now, people can access hundreds of thousands of radio stations from across the world, if they want to. If somebody wants to record their own podcasts or start a streaming radio station on the internet, there is nothing to prevent them from doing so. Digital audio broadcasting—DAB—has had a difficult history in the UK and it has taken a long time to reach scale, but it has now done so, and more and more stations are launching all the time. One of the challenges has been that, to date, most stations have been UK-wide rather than being local, regional or based in a nation. However, that is starting to change, and there will be a tipping point.

I am not going to argue against the fact that, if a show comes from somewhere outside Scotland and is broadcast across the UK, it will have less of a local voice. Clearly, that will be the case. However, we need to step back and look at all the opportunities that listeners have.

I do not disagree that there is an issue about providing talent, but the industry, which includes the BBC, community radio and commercial radio, needs to offer choice. We need to have a plurality of services. I cannot speak to what Bauer will do with Radio Clyde and Radio Forth. They are different in character from Heart and Smooth—there is no doubt about that. However, the industry must offer our listeners a choice and, in order to do that, we must have flexibility. The reality is that, if we do not offer a choice, listeners will go elsewhere.

Our business is based around listening hours—the hours in which people listen to radio stations. In the past 10 years, the volume of listening hours among 15 to 19-year-olds has halved. That figure is for BBC and commercial radio. If we take a 20-year period, we can say the same thing about 15 to 24-year-olds. That is because people have so much more choice about how they consume media than any of us in this room—with possibly one or two exceptions—had when we were growing up. The commercial radio industry has to respond to that. If we stand still, we will be lost and no local content will be broadcast.

Your point of view is perfectly reasonable. It is absolutely right that we are held to account for delivering content—I have no argument with that whatsoever. In these situations, however, I often say that we have to focus on the local content that really matters, that listeners value and that delivers real public value. Our view is that that is local news—

Please keep your answers brief.

Of course—sorry.

I have a final question.

You can ask one brief question.

I have some concern about the relationship between Capital Scotland and Heart. You say that there is some kind of management arrangement, or that you run the stations for—

We do not run Capital. Communicorp runs it. It has a brand licence agreement with us. We license the brand to it in the same way that Virgin licenses its brand to Virgin Radio, and we also provide network programming.

It is quite concerning. In my guts, I sense that there is something not right there. At the end of the day, those licences—for Heart and Capital—are supposed to compete against each another, but their relationship seems very cosy.

I do not think that that is true at all. We clearly compete for audiences. There are various parts of the country in which Global Radio owns Heart and Capital stations that compete with each other for audiences. Obviously, we design those stations to appeal to different kinds of listeners with different kinds of content. The other area in which we compete with Communicorp is local advertising. It has an entirely separate local advertising team, and the stations sell against each other all the time.

I noticed that, over 10 years, there has been a reduction in local commercial radio’s audience share from about 30.3 to 27.4 per cent. That does not seem like a huge drop. In the same period, there has been an increase in national commercial radio’s audience share from 10.7 to 17.5 per cent. Is that because of the increasing number of stations? A few minutes ago, you mentioned that choice and flexibility are key. Is the fact that there are more national, as opposed to local, stations driving the change?

Being mindful of the convener’s request to keep my answers short, I will say yes.

I do not quite recognise those numbers, but there are different ways of cutting them. The figures that I am looking at show that, 10 years ago, 80 per cent of commercial radio listening in Scotland was to local or regional stations; today, the figure is 66 per cent, which possibly includes the BBC. Over a slightly longer period, in 2000, 60 per cent of all radio listening in Scotland was to stations based in Scotland; now, the figure is just over 40 per cent.

Yes; the decrease in our audience share is due to the increase in choice in digital radio stations, which has been disproportionately UK-wide, and that is just is driven by economics.

The figures that I have are from Ofcom’s 2018 review and consultation paper. Claire Baker mentioned minimalism. Ofcom said that stations have to produce

“a minimum of 3 hours of locally-made programming between 6am and 7pm if they are providing local news at least hourly throughout the same period.”

Why have you gone to the minimum? I take it that, if Ofcom had specified the minimum to be two hours, you would have gone straight down to two hours; and, if it had specified one hour, you would have gone to one hour.

It seems to me as though you almost feel local radio programming to be a burden. You might say that that is not the case, but that is how it looks. As soon as Ofcom reduces the minimum number of hours, you immediately change your programming to that minimum, when you quite clearly do not have to do that, unless it is for obvious commercial reasons.

I do not think that Ofcom would ever have said that the minimum should be two hours or one hour, because there are no shows—

No. The point is that you are going to the minimum.

We are—it is absolutely true that we are exploiting the flexibility on network programming. I cannot speak for other radio operators; they may choose to do that, or they may not. That is the only change that we are making in Scotland. Outside Scotland, there are parts of the country where we have the opportunity to combine shows, but we have chosen not to do that. We do not always go to the minimum.

You are correct that we are currently providing seven hours a day of locally made programming and that we will move to three hours. It is not a coincidence that the minimum is three hours—that is to do with the structure. Ofcom decided, after consultation, to allow commercial radio groups to network their breakfast shows, and breakfast shows last for four hours.

Do you believe that your programming change is essential to survive financially in this market? Clearly, finance is the issue for you. Are you not putting yourself on a slippery slope? If people tune in for specific local reasons—George Adam mentioned some of those—you might find that the decline in listeners accelerates, the switch to national radio stations becomes greater and we end up in a situation in which there is very little Scottish content.

The BBC has just launched BBC Scotland, because it considers there to be a market for Scotland-specific content, yet it seems as though things are going in the opposite direction in the sphere of commercial radio. I find it difficult to square that circle. Obviously, the BBC does not have the same issues as you do—I understand that—but, even so, the situation seems paradoxical.

There were a couple of points in that. You are absolutely right that, if audiences decline, we will have got it wrong and we will be punished for that. My colleagues have to make the best decision that they can based on their experience and assessment of the market. If they get it wrong and our audiences decline, we will suffer.

You are correct to say that the BBC is investing in a television channel, but you are also correct to say that it is not under commercial pressure in the way that we are.

Will there be further changes in locally made programmes? Are there further changes that you would like to see over the next five or 10 years? You said that the scene has changed dramatically over the past 20, 10 and even five years, which has pushed down the minimum amount of locally made content. Have we reached the baseline for content level, or will it continue in the same direction? For example, instead of having two approved areas in Scotland, might we end up having the whole of Scotland as one approved area in five years’ time? How do you see the situation going?

The question of the approved areas in Scotland has been controversial. It is not one in which we have taken a particular view, because we have always been based in Glasgow, but it is an issue for the smaller commercial broadcasters in Scotland, who have expressed a lot of concern about the existence of the approved areas and their specific geography. That does not affect us.

On further changes, we will always want—and need—to adapt our programming. However, if you are asking whether I anticipate that we will stop doing local news—absolutely not. Do I anticipate that the rules will be changed any time soon to permit us to stop providing at least one locally produced show per weekday? No, I do not expect those rules to change. From our perspective, it is hypothetical.

So the direction of travel is no longer downwards.

I have given up on trying to predict too far into the future. However, I do not anticipate any further changes in the short term with regard to where content is produced. The changes have taken nearly a decade to come into place and—as we know—they remain controversial. I do not, therefore, expect local production requirements to change again any time soon. However, we always look at the balance of content and presenter line-up on our stations, which change on a regular basis. I keep coming back to one of the first points that was made, which was that, if audiences decline, we will have to respond.

Mr Harding, you talked earlier about your wish to remain relevant. However, that is quite difficult for us to comprehend given that you have indicated today that content and programming are being reduced and that you will reduce some of your workforce. It is hard for us to imagine that you will remain relevant when you are doing all those things, which will have an impact on the audiences that you have been talking about—you said that hundreds of thousands of people listen to you, but the content and process might change that.

I therefore want to ask about the modelling that you did that led to the situation in which you find yourself. What modelling did you put together that shows what the impact on your audience figures will be? Does that modelling show that your side of things will flourish through what you are doing? I would suggest that it would be the reverse—that your side of things would diminish. Why do you think that what you are doing will provide a better service for the communities that you represent?

Programming decisions are creative decisions; they are an art, not a science. My colleague, Richard Park, does not sit in front of an Excel spreadsheet modelling audience behaviour. It is about judgment and, if we have got that judgment wrong, audiences will tell us.

I appreciate that when you said that we are reducing content, you meant that we are reducing locally produced hours. Our listeners will hear a change. They will hear a change in presenter—they will receive not less content, but different content. However, I understand what you are saying.

But it may be not the content that they are used to. We have heard from other MSPs that the specific content that you had, the brand, the image and the perception of your organisation on the radio, were what made people listen to you. I have heard nothing this morning that gives me confidence that diminishing and changing that will not lead to a reduction in the number of people who listen to you. The individuals who you are supposed to represent and who wish to hear you will switch, because they will not get the same content that they have been used to in the past. You are not going to give them that, so they will find something that once again does. I therefore find it difficult to see how you think that this is a good-news story for you as an organisation.

My colleagues obviously take a different view. They believe that the new breakfast shows that will be launched will be entertaining, informative and popular programming. That is their view and that is the decision that they have come to—not by modelling, but by making a considered editorial judgment. If they have got it right, those audiences will grow; if they have got it wrong, they will not.

Clearly, some people will be disappointed; there are 650 people on the Facebook group that your colleague, Claire Baker, mentioned and there is your good self, sir. However, we have to cater to all our listeners and take that difficult judgment. As I said in my opening statement, nobody is suggesting that the decision to make those changes is easy. I am equally sure that you are not suggesting that we should never change any of our programmes.

You need to evolve; that is the nature of the business that you are in. You need to compete, expand your horizons and unlock your potential. However, I find it a difficult pill to swallow that the changes will be beneficial, in reality.

10:45  

The witnesses have talked about the opportunities for the business, and made the point that the feedback suggests that the music is more important than the presenters. How will the changes provide more or better opportunities for Scottish talent to be aired on your stations?

As I said to your colleague Mr Adam, we are changing the breakfast show. No one in commercial radio or the BBC has ever gone straight on to the breakfast show; the breakfast show is not the training ground for new talent. I do not want to repeat myself, but there is an issue in the industry about how we develop new talent. However, it is not correct to make a connection between changing the breakfast show and creating pathways for talent.

I am not talking about the presenters; I am talking about Scottish music and musicians, including bands and singers.

I do not have statistics on how much Scottish music we play. The Scottish music scene is extremely healthy, and I expect that we will continue to play lots of Scottish music. Heart Scotland has pretty much always played the same music as Heart stations play throughout the rest of the UK, for example, so the changes that we announced in February have no bearing whatsoever on our music policy.

Following the changes, you will have a wider UK network and there will be fewer Scottish voices on your radio channels, but you have indicated that the music will not be affected. If that is the case, that is positive. You also said that the Scottish music scene is very strong. However, if you move away from localism, as Kenneth Gibson said, surely your commercial activities will be adversely affected. Scottish businesses will probably not want to advertise on your stations, which will have a knock-on effect and lead to even less local input and to stations having less of a local importance to listeners in Scotland.

That is not true at all. There is no link between the location of the programme presenters—the DJs—and which businesses are interested in advertising on the stations. This year, we have more than 300 Scottish advertising clients. Our team in Scotland expects to speak to 3,500 Scottish businesses about advertising on our radio stations, and to pitch hard for their business in a very competitive market. The location of the DJs has no bearing on that whatsoever; they are completely different things.

I was not talking about the location of the DJs. I was saying that there could be a difference in people in Scotland hearing local content compared with people doing so in the wider UK.

Are the licences in Scotland licences for a wider UK network or are they licences to operate in Scotland?

The latter. On analogue radio—that includes FM and AM, but not DAB—there are three UK-wide commercial licences: Classic FM, talkSPORT and Absolute Radio. In the legislation, all other FM or AM licences are called “local”, and we call them “local” or “regional” in the industry.

That is helpful. Thank you.

Are Global Radio’s staff in Scotland unionised?

No.

Would you recognise a union if staff decided to organise through, for example, the Broadcasting Entertainment Cinematograph and Theatre Union or the National Union of Journalists?

I am sorry, but that is not my area. I do not work in the people and culture team, so I would be talking outside my brief. I do not know the answer, but I would be very happy to get an answer for you.

Do you have staff anywhere else in your UK-wide operation who are unionised?

Not to my knowledge. However, I am anxious about not giving you an accurate answer.

That is fine. If you could get back to the committee in writing, that would be useful.

Of course.

Good morning. We have had a good discussion about a number of issues that have arisen. Mr Harding said that the local content that matters would be kept. My concern is that that would be decided by the UK network, which is, I presume, based in central London, so my confidence that that will result in decisions that are relevant for local stations in Scotland is perhaps not that high.

Mr Harding also said that the change was needed in order to grow the audience. I fear that your decision will take away one of the de facto reasons why people might not just tune into a station but keep it on. If you are going to take away local broadcasting content from your breakfast shows, why would people not just tune into Zoe Ball on BBC Radio 2 from central London? What would the difference be?

There would be no adverts.

Okay. My colleague Mr Gibson reminds me about the advertising situation. Leaving that to one side, why would people bother any more? What is the compelling reason to listen to such stations any more? You are denuding them of something that they currently have and diminishing them. People will vote with their feet and find something that suits them, and I fear that that might not be your stations.

I will try to deal with all those issues.

You talked about where decisions about local content are made. All the decisions about local news stories and what we broadcast in all our news bulletins throughout the daytime—

I am sorry to interrupt, but I realise that time is of the essence. I am not talking about news bulletins; I am talking about your decision to reduce your breakfast shows to one that will be broadcast from London, for example.

That decision was made in London—by a Scotsman.

It was made in London. I am talking about your attitude to what is local and what is important from a local perspective. With the best will in the world, how will a broadcaster in your office in London suddenly give a wee mention to a big breaking story? My colleague Claire Baker gave an example. If a big news story is breaking locally and there is a wee clip from the broadcaster in London, that scenario does not involve the listener; there will just be a wee pre-recorded clip, to make it sound local, and that will not fool the listener. Do you know what I mean?

I listen to the radio a lot—that includes your stations—so I think that I can make comments about it. If I want to listen to a wee bit of continuous music, I might tune into Smooth Scotland and, if I am in Fife, I might listen to Kingdom FM. It is a tough market out there, and you have to suit the customer.

I agree that it is a tough market, and I will not repeat my comments about it being the listener who will decide. We should make it clear where the local news is produced and recorded. A local story comes from the local area, and it comes from Corrie Martin’s team. The news bulletins are recorded and produced in Glasgow—

I am sorry to interrupt. I do not want us to repeat ourselves, but I think that Corrie Martin gave a specific scenario. During your breakfast programme, which will not be produced locally, there could be a big breaking local news story, although maybe not a catastrophic one, as that might trigger another approach. We would expect a local radio station to cover and pursue that story, so that local people tuning in will gain knowledge that they would not have by listening to Zoe Ball in London, for example.

They will gain that.

What will be the difference? People might as well listen to Zoe Ball.

The difference between Heart Scotland and Radio 2 is that we have an editorial team and broadcast journalists in Scotland and, if there is a breaking news story in Scotland, they will write the script and send it through our systems to the studio in London and the presenter in London will read it out.

The story will be broadcast to Scotland, but not to the rest of the country. That is quite clearly not the same as having a presenter who is based in Scotland, but nor is it the same as having UK-wide content. I think that we are confusing where the studios are based with where the content is coming from and where it is being broadcast.

I am not, but I hear what you say. I do not think that we are going to make much progress. Perhaps Corrie Martin has something to add.

All I will add is that, with such a story, the listeners will be pointed towards when the next bulletin is, whether that is at the top of the hour or on the half hour, and that is the content on which we would focus.

They will turn the dial—they will not wait for your next bulletin, but go somewhere else to get the news.

They will still get news.

Yes—but half an hour later or something like that.

You have repeatedly said that listeners do not care where the DJs are based. Why, then, did you not decide in the reorganisation just to broadcast the breakfast shows from Scotland, rather than to close the Scottish operation and broadcast them from London?

I certainly did not mean to say that listeners do not care, so forgive me if I did. I was trying to say that where DJs are based is relatively low down the list of factors that they cite. You are right—studios running a national show could be based anywhere. It just so happens that our head office is in London, which is because, unfortunately, we are a relatively small player in the Scottish market. Our market share is much lower in Scotland than it is in the rest of the UK. That is what it is; there is nothing I can say to the committee that will mitigate that.

Might broadcasting from Scotland have been cheaper?

Quite possibly—I do not know.

Did you consider that?

We did not consider moving our head office.

I am not asking you to move your head office. You made the point that it does not matter where DJs are based, and I am sure that people throughout the UK would love to hear some of your breakfast time DJs coming from Scotland.

I would not have been in the room when that discussion happened, if it happened, but it is unlikely that we would have decided to move.

Why?

All our network programming operations are based in London, so there is a function of scale—

It is London by default.

Obviously, I would not use those terms, but trying to run things as efficiently as we can is challenging; there is an inevitable tendency to centralise. Nothing that I say will make that any better. It is a challenge for the media industry. I do not dispute it, and I will not say that the decisions that we made and announced in February are not part of it. It is an issue.

I have listened with great interest. Unfortunately, Mr Harding, I will add to your pain in this session, but I may also give you some leeway. I should declare an interest: I started my career selling news services to local radio and I was also a music plugger. I have a huge amount of sympathy for the industry, but also for many of my friends and ex-colleagues who are losing their jobs.

Getting to the crux of the matter, I will quote Ashley Tabor, the founder of Global. He said:

“If you take 50 different radio stations there cannot possibly be 50 good presenters at every station ... Why not take the two or three quality class players and put them across the network.”

Please correct me if I am misquoting him in any way, but do you understand the message that that sends to the industry and the many hard-working and talented radio presenters across the UK?

They are difficult decisions that affect people who have worked in the industry for a long time. Nothing that I say will sugar that pill in the slightest. We try to be honest and straightforward, we try to see stakeholders around the UK and, when we are asked questions by journalists, we try very hard to be honest. We know that some of the things that we do are not popular with people, and the committee has been very clear about its views today.

11:00  

We do our best to explain why we are making changes. When Ashley Tabor said that—I have heard it quoted, but I did not hear him say it, so I cannot say whether the quote is 100 per cent accurate—I think that he was simply trying to explain the dilemma. We are trying to deliver the best possible content and we have to put our listeners first.

I fully understand that many people here and elsewhere think that we have made the wrong decision. All I say is that we are trying to do our best for our business, our stations and our listeners. If we get it wrong, we will—as your colleagues have made very clear, and they are absolutely right—be punished, but by the listeners. To be honest, listeners will not necessarily flip the dial and listen to another radio station if they want more news, but will go online.

You say that you are doing this for the listeners. I appreciate that that is the response that you have written down, but nothing that you have said today says to the committee that you are doing this for the listener; it is clearly all about cost. There must be huge operating cost savings in going from a number of studios employing a number of staff to a single, centralised output from London.

I get the commercial model for making that decision, and deregulation has provided the perfect opportunity to achieve those cost savings. However, you have somehow conflated that with the argument that this is just about improving output.

Clearly, there will be a loss of and reduction in localised editorial input, because local presenters do not just press buttons to play music—they talk. You must understand that there will be a reduction in localised output, so how can you genuinely say that this is all about the listener?

You said that it is “all about cost”. I am sorry, but that is just not true. It is not just because I have it written down that I say that we are doing this for the listeners. In Scotland, we are not closing any studios; we are moving from having two Scottish breakfast shows to broadcasting UK-wide breakfast shows. As a result, the presenters of those two shows—four professional, highly regarded presenters—will no longer be contracted to do those shows. That is very sad, and we are mindful of that. In addition to losing the presenters, our headcount will go down by one, from 34 people to 33. The decisions in Scotland are not being made to save costs.

There are cost savings from merging broadcast centres in England. As a business, we have decided that we would rather invest in our programming, marketing and product development than invest in maintaining buildings, because technology does not require us to run those buildings any more.

Unfortunately, people will lose their jobs. That is very sad, and we are mindful of that, but we are doing this to ensure that our business has the most secure long-term future. If we have got that wrong, it is the listeners who will determine that.

Anybody who has followed local commercial radio over the past decade or so—or possibly over the past 20 years—will have seen this consolidation coming for a long time; it is not a huge industry secret that this is the direction of travel for commercial radio, as was the case with commercial television. I have sympathy with your need to stay afloat and keep your head above water. I will give you an opportunity to give the committee some positive news. What would have happened if you had not taken that decision?

I appreciate that you have taken advantage of changes to the regulatory regime that operates your licences. If you had not made this decision, where would you have ended up? Again, is it simply a matter of loss of profit or would there have been an overall detrimental effect on the plurality of commercial radio in the UK?

You make a good point, and I would like to answer it on behalf of the industry as a whole, in a way. If local stations, including ours, are not given more flexibility with regard to how they deliver content, and are not permitted to make use of technology to deliver that content, there will undoubtedly be an on-going acceleration of the trend that we have seen of more listening going to UK-wide and international services, at the expense of local and regional services.

The public policy decision that regulators and the UK Government have made is based on consideration of how, in the digital age, we can ensure that the local content that really matters from a public-policy perspective—local news and information—is protected. Nothing in the regulations requires any digital broadcaster to provide any localness whatever. The risk is that, as the share of analogue listening continues to decline and the share of digital continues to grow, there will be fewer and fewer opportunities for listeners to engage with local content, and it will simply disappear in the way that it is disappearing in the press in many parts of the UK.

The point that I always make is that you should be careful what you wish for, and try to protect the things that are most important. Imposing rules on exactly where programmes have to be made is not, in our view, the right way to regulate the industry. Local news has to be protected, and it is protected in the regulations. I think that that is right. However, you have to give the stations that are capable of delivering local news and information more flexibility to compete in the market. If they do not have that, the risk is that they will lose listeners and revenue and go out of business. That has happened in some parts of the country.

It is also fair to say that you are competing against a network of local radio that is advertisement-free and publicly funded, and that the situation is becoming increasingly difficult as the BBC moves into the digital sphere. My sympathies are with the industry on that.

I end my line of questioning by wishing Roman Kemp and the new breakfast team the best of luck. I hope that the audience numbers survive and that we do not end up in the doomsday scenario in which everyone flips elsewhere. Thank you for explaining the situation this morning.

For the record, I mentioned Paul Cooney earlier, and you suggested that he did not have an association with Capital. You made me doubt my own memory, but, in fact, he launched Capital FM Scotland for Global Radio in 2011.

He did; I was wrong.

I am glad to see that I had correctly remembered him lobbying me and telling me how fantastic an offering it was going to be. I note that, in 2011, he said in The Drum:

“I am committed to making Capital FM Scotland a station that our Scottish listeners love, the advertisers flock to and the owners are proud of.”

Although it was quite a wee while ago, I remember the focus on the fact that there was going to be local content and local voices on the station. You could argue that that approach has been pretty successful in building up your brand, your audience and your advertisers, but that, after having done that with local talent, you are now ditching it.

First, I apologise for my error. It was entirely my mistake, but I was thrown by the reference to when the licence was awarded. Of course, it was when Galaxy was rebranded as Capital. You are absolutely right and I apologise for getting that wrong.

We have been talking about three stations today: Heart and Smooth, which are operated by us; and Capital, which is operated by Communicorp. They all have a mix of UK-wide and local content, and that will be changing. If you look at the fortunes of the stations over the past five years, you can see that they have been different. Smooth has done extremely well; Capital has remained solid, in that it has not grown its audience or shed any listeners; and Heart has struggled. There are different reasons for all that. We all have our views, which are sincerely held, on the extent to which locally produced shows—particularly breakfast shows—are important in the mix. I keep coming back to what I have said many times, and please forgive me for repeating myself once again, but it will be the listeners who decide, at the end of the day.

Global Radio made a pre-tax profit of £25 million last year, which was partly due to a sales revenue rise of 28 per cent to £388 million. How much of the pre-tax profit did you spend lobbying Ofcom to deregulate the industry?

A tiny amount—that is, we do not spend any money, per se, lobbying Ofcom. There are two people in Global Radio who work in public affairs and are concerned with regulatory policy. I am one of them—that is part of my role, but the main part. The other is my colleague in London, Kirsty Leith, who is head of public affairs. We do not spend any money lobbying Ofcom. There is nothing that we could do in that regard.

When did you last meet Ofcom?

Typically, I meet Ofcom once a month in its offices to discuss various things. The last meeting that I had was about its regulation of the BBC, rather than the issue that we are discussing.

You discuss regulation of commercial radio with Ofcom on a regular basis.

Of course.

Thank you for coming to give evidence to us today.

11:10 Meeting continued in private until 11:20.