Analogue Commercial Radio Licence: Format Change Request Form Date of request: 25 April 2017 Station Name: The Beach Licensed area and licence number: Great Yarmouth and Lowestoft AL100585BA/2 Licensee: Celador Radio Broadcasting Ltd Contact name: Paul Smith Details of requested change(s) to Format Character of Service Complete this section if you are requesting a change to this part of your Format Existing Character of Service: Proposed new Character of Service: Programme sharing and/or co-location arrangements Complete this section if you are requesting a change to this part of your Format Current arrangements: The Beach will share all programming with North Norfolk Radio and Radio Norwich. They will locate at the Radio Norwich premises in Norwich NR7 0EE where all weekday peak hours 0600-1900 and weekend peak hours 0800-1200 will be made. Proposed new arrangements: The Beach may share all programming with Radio Norwich, North Norfolk Radio, Town 102, or Dream 100, with the service originating from Radio Norwich. Locally-made hours and/or local news bulletins Complete this section if you are requesting a change to this part of your Format Current obligations: Locally made hours: At least 10 hours a day during daytime weekdays (must include Breakfast). At least 4 hours daytime Saturdays and Sundays. Local news bulletins: Hourly at peaktime weekdays and weekends. Outside peak, UK-wide, national and international news should feature.
Proposed new obligations: Locally made hours: At least 7 hours a day during daytime weekdays (must include Breakfast). At least 4 hours daytime Saturdays and Sundays. Local news bulletins: At least hourly during weekday daytime and at peaktime weekends. UK-wide, national and international news should feature at other times. The holder of an analogue local commercial radio licence may apply to Ofcom to have the station s Format amended. Any application should be made using the layout shown on this form, and should be in accordance with Ofcom s published procedures for Format changes (available on our website at http://stakeholders.ofcom.org.uk/broadcasting/radio/formats-content/changes/ ) Under section 106(1A) of the Broadcasting Act 1990 (as amended), Ofcom may consent to a change of a Format only if it is satisfied that at least one of the following five statutory criteria is satisfied: (a) (b) (c) (d) (e) that the departure would not substantially alter the character of the service; that the departure would not narrow the range of programmes available by way of relevant independent radio services to persons living the area or locality for which the service is licensed to be provided; that the departure would be conducive to the maintenance or promotion of fair and effective competition that there is evidence that, amongst persons living in that area or locality, there is a significant demand for, or significant support for, the change that would result from the departure; or that (i) the departure would result from programmes included in the licensed service ceasing to be made at premises in the area or locality for which the service is provided, but (ii) those programmes would continue to be made wholly or partly at premises within the approved area (as defined in section 314 of the Communications Act 2003 (local content and character of services)). Only one of these five criteria need be satisfied in order for Ofcom to consent to the proposed change. However, even if Ofcom is of the opinion that the proposed change satisfies one or more of the statutory criteria, there may be reasons (depending on the particular circumstances of the case) why Ofcom may not consent to the proposed change. The additional criteria to which Ofcom will have regard when exercising this discretion can be found at: http://stakeholders.ofcom.org.uk/broadcasting/radio/formats-content/changes/ ) Applicants should note that, under section 106ZA of the same Act (as amended), a proposed change that does not satisfy the first or last of these criteria (i.e. a change that Ofcom considers would or could substantially alter the character of the service, or
does not relate to the origin of locally-made programmes) must, if it is to be considered further under any of the other three criteria, be consulted upon. #. In the event that Ofcom receives a request for Format change and considers that criterion (a) or (e) is not satisfied, it will seek confirmation from the applicant as to whether it wishes to proceed with the request (and, if so, whether it wishes to amend or replace its submission in light of the necessity to make it public). Please set out the statutory criterion, or criteria, set out in section 106(1A) of the Broadcasting Act 1990 that you believe is/are satisfied in relation to this Format change request, and the reasons for this: (a) Our proposal would not in any way alter the character of the service. The Beach would remain a locally-oriented and broad music-led service for the Lowestoft and Great Yarmouth areas. In particular, the station will benefit from the same commitment to local news and information that all Celador stations carry. Local news bulletins, produced specifically for Great Yarmouth and Lowestoft, will run 0600-1900 weekdays and 0800-1300 weekends, with local headlines on the half-hour during weekday breakfast. Additionally, split links specifically for The Beach will include other local information, including weather, travel, sports news and what s ons. Given our commitment to providing an enhanced local news service, we are also requesting that the hours of locally-produced programming (defined as coming from the regional broadcast centre in Norwich) be reduced from 10 to 7, in line with Ofcom s published policy in its Localness Guidelines issued in September 2010. (b) Since the character of the service will remain unchanged, the range of programme services available from local independent radio in Great Yarmouth and Lowestoft will also remain unchanged. In both its music and speech content, as well as its commitment to localness for Great Yarmouth and Lowestoft, The Beach will remain clearly distinct from its competitors. (c) As we detail below, the principal reason for this request is to protect the financial viability of The Beach for the remainder of its licence term and beyond. Currently, the commercial radio market in Great Yarmouth and Lowestoft is dominated, in terms of both audience and local revenue, by Heart. The Beach cannot compete effectively while it remains financially insecure and lacks the resources to maintain a high quality service, let alone market itself and build its audience. The cost savings that will result from the co-location of, and programme sharing with, the other stations in the Anglian Radio group will ensure the long-term sustainability of the service and thereby promote more effective competition in the provision of local commercial radio in the area. (e) Both Great Yarmouth and Norwich (where the service will originate) are in the same approved area as Ipswich. Tendring is in an adjacent approved area, and within the same wider East Anglia region. Please provide any additional information and/or evidence in support of the proposed change(s) below. In particular, the applicant may wish to outline how they see that the proposed change fits within Ofcom s published Format
change request policy and also Ofcom s Localness guidance, which includes our co-location and programme sharing policy. This request is being made in support of the requests we have submitted to allow the co-location of Town 102 in Ipswich and Dream 100 in Tendring with the other Anglian Radio stations that already broadcast from Norwich. Town and Dream are currently permitted to be co-located and share their programming, following a change to the stations Formats requested by Anglian Radio s previous owners and approved by Ofcom in November 2016. At the same time, Ofcom approved a request from Anglian for its other three stations in the East Anglia approved area Radio Norwich, North Norfolk Radio and The Beach to co-locate and programme-share from Norwich. Celador Radio acquired Anglian Radio in January 2017. The Anglian group was running at a significant operating loss, and building up substantial debt as a consequence. Our outline analysis (which is attached, in confidence, with this request) suggests that, if no measures are taken to reduce costs, the Anglian group would be burdened with an overdraft of about 1.2m by April 2018, in addition to a debt to Celador of 1.4m. Anglian had already defaulted on this latter debt, so interest on it of 4% is now being charged. There is currently no schedule of repayments for any of Anglian s debts because the group s cashflow could not sustain such a strategy. Substantial cost-saving measures are required to re-establish the financial viability of the Anglian stations, allow for investment in marketing and programming quality and service the company s significant debts. By consolidating the five stations into a single regional broadcast centre, we have identified savings of some 300k pa in overheads, plus an additional 89k in capital expenditure. We are optimistic that these savings would allow the Anglian group to achieve operating profit by 2020. These are small radio stations. The Beach has an MCA of just over 174,000 adults, well under the 250,000 mark below which Ofcom has determined that there is a stronger case for co-location and programme sharing. We believe that Norwich, rather than Ipswich, is the more appropriate location for an East Anglian regional broadcast centre. Norwich is the historic capital of East Anglia and is the location of regional institutions such as the University of East Anglia and the region s only international airport. It is the home of the region s other major media outlets, including BBC East, ITV Anglia and Archant newspapers, publisher of the Eastern Daily Press (covering Norwich and Norfolk). On a practical note, the group s current premises in Ipswich are more expensive than those in Norwich, so co-locating the group in Norwich will ensure greater cost savings. Additionally, 20 members of staff are based in Norwich, compared with 15 in Ipswich (8 of whom are sales or news staff, so would not need to re-locate), so establishing a broadcast centre in Norwich would be disruptive to fewer people. Notes # Ofcom may approve a change under any of criteria (b) to (d) without consultation, or after a consultation of less than 28 days, if Ofcom considers that to hold a consultation at all, or for 28 days or more, would result in a delay that would be likely to prejudice the interests of the licensee. Ofcom may also remove for the purposes of consultation any confidential information submitted by the licensee. Version 6 amended April 2010
Background to the Decision The Beach broadcasts to Great Yarmouth and Lowestoft. The licence is held by East Coast Radio (The Beach) Ltd, the ultimate parent company of which is Celador Radio Broadcasting Ltd ( Celador ). Celador has requested the following changes to The Beach s Format: To share all local programming hours with the Ipswich (Town 102) and Tendring (Dream 100) licences. This would be in addition to sharing all local programming hours with the Norwich (Radio Norwich) and North Norfolk (North Norfolk Radio) licences, for which The Beach already has the necessary permissions. To reduce the required number of local programming hours on weekdays from ten to seven per day. To provide local news bulletins at least hourly throughout daytime on weekdays. The Beach s current Format requirement for local news on weekdays is at least hourly at peaktime (defined by Ofcom as being breakfast and afternoon drivetime). Every FM local commercial radio service is required to broadcast a certain amount of locally-made programming, which is specified in its Format. Locally-made programmes are those made within a station s licensed area or, where Ofcom has approved a wider area relating to that station, that Approved Area. All the licences involved in this request are in the East Anglia Approved Area with the exception of Dream 100, which is in the Essex Approved Area. The requests listed above would change The Beach s character of service as set out in its Format, and accordingly can only be agreed if Ofcom considers that one of the statutory criteria set out in section 106(1A) of the Broadcasting Act 1990 is satisfied in relation to the request. These criteria are: (a) that the departure would not substantially alter the character of the service; (b) that the departure would not narrow the range of programmes available by way of relevant independent radio services to persons living in the area or locality for which the service is licensed to be provided; (c) that in the case of a local licence, the departure would be conducive to the maintenance or promotion of fair and effective competition in that area or locality; (d) that in the case of a local licence, there is evidence that, amongst persons living in that area or locality, there is a significant demand for, or significant support for, the change that would result from the departure; or (e) that, in the case of a local licence (i) the departure would result from programmes included in the licensed service ceasing to be made at premises in the area or locality for which the service is provided, but (ii) those programmes would continue to be made wholly or partly at premises within the approved area. It is important to note that the legislation leaves to Ofcom's judgement the decision as to whether to permit a change, even if one of the above statutory criteria is satisfied.
Ofcom has published details of the policy criteria that we will take into account when considering a request such as this one - from a service to co-locate and/or share programmes with a service, or services, in a different Approved Area. However, there may be other factors to be considered, and all requests are treated on a caseby-case basis. The factors Ofcom have published are the following: Size of station: there may be a stronger case for co-location and/or programme sharing where at least one of the stations has a licensed area with a population of fewer than 250,000, and especially those under 100,000, although we would not rule out requests from larger stations in exceptional circumstances. Distance and affinity between the areas: there is likely to be a stronger case for co-location where the stations concerned are not too far apart geographically and are able to demonstrate a cultural affinity between the two areas. Financial: there may be a stronger case for co-location where stations can demonstrate that co-location is required to ensure the financial viability of the stations concerned. Decision Programme sharing We first considered Celador s request for The Beach to share its programming with Dream 100 and Town 102, noting that Dream 100 is located in the Essex Approved Area. This would be in addition to the permissions The Beach already has to share its local programming hours with Radio Norwich and North Norfolk Radio. In assessing the request from Celador, we attached considerable weight to the fact that the key local material strands local news bulletins, weather and what s on information will continue to be delivered on a bespoke basis for each licence area. This means that The Beach will continue to broadcast local news bulletins tailored specifically for the Great Yarmouth and Lowestoft area, and that split links will enable The Beach to continue provide localised weather, travel, what s ons and sports news for the Great Yarmouth and Lowestoft area. We recognised that the music output on The Beach would remain the same, given all five stations involved in this request already share the same playlist. For these reasons, we concluded that the proposed changes would not substantially alter the character of the service, and therefore were satisfied in relation to section 106(1A)(a). We next considered the programme sharing request in relation to Ofcom's policy criteria. This included, in particular, the policy criteria specific to requests to co-locate or share programmes with stations in a different Approved Area, as set out above.
In this respect, we took account of the significant financial difficulties the five stations involved in this request have been experiencing over the past few years. Until January 2017, the licences were owned by Anglian Radio Ltd, which had been operating at a significant financial loss. Celador s contention, supported by confidential evidence submitted to Ofcom, is that substantial cost-saving measures are necessary for the licences to remain financially viable. Celador estimates that by implementing the proposed co-location and programming sharing arrangements, the stations could collectively achieve an operating profit by 2020. We were also cognisant of the fact that, with the exception of Radio Norwich 1, all the radio stations involved in this request have a Measured Coverage Area ( MCA ) of fewer than 250,000 adults. The Beach has an MCA of 174,124 adults. As set out above, we say in our policy guidance that there may be a stronger case for colocation and/or programme sharing between stations in different Approved Areas where at least one of the stations has a licensed area with a population of fewer than 250,000 adults. For these two policy reasons, we decided to agree to this aspect of Celador s request. Changes to local hours and local news provision Second, we considered Celador s request to reduce the hours of local output on weekdays (from ten to seven per day) but to simultaneously increase the local news requirement from peaktime to daytime. In relation to this aspect of Celador s request, we were satisfied in relation to section 106(1A)(a) that the departure would not substantially alter the character of the service on the grounds that the increase in networked programming would be offset by the increase in provision of bespoke of local news content for the Great Yarmouth and Lowestoft area. We then decided to agree this aspect of the request because it is consistent with our policy on local news, as set out in our published localness guidelines 2. Summary Ofcom decided to approve the various elements of the Format change request from The Beach because in each case it was satisfied in relation to one of the relevant statutory criteria, and for the policy reasons outlined above. June 2017 1 The MCA of the Norwich licence is 290,000 adults. 2 Available at https://www.ofcom.org.uk/tv-radio-and-on-demand/information-for-industry/radiobroadcasters/localness/localness-guidelines