As many as 50 local radio stations could be forced to close without changes being made to the way the industry is regulated, an official report has warned.
The paper, ordered by the government as part of the Digital Britain review of the media and communications sectors, said major changes were needed if local commercial stations were not to suffer “death by a thousand cuts”.
In the report, John Myers, the former head of GMG Radio, recommended changing existing rules on local programming, music policy and the location of a station’s premises in favour of a “local impact test”.
Local commercial stations were facing huge difficulties, he said, overwhelmed by the explosion of online radio services, hemmed in by an outdated regulatory framework and hamstrung by poor decision-making within the industry.
Half make a loss every year, the report said.
“I believe firmly that now is not the time for ‘baby steps’ or for weakness of commitment,” Mr Myers wrote in the report.
“Instead, the radio industry as a whole must be bold, as I believe this might be one of the last opportunities it will be offered to carve out a long-term, profitable and successful future.”
Strong local identity was vital to the sector, he said.
“I firmly believe that the ‘localness’ of local radio will continue to be the key to its success. If local radio were to ‘de-localise’ its broadcast content, it would simply fade into a sea of similar radio stations that offer no particular USP to their audiences.”
Current rules dictate a minimum number of hours of local programming commercial stations must broadcast, but Mr Myers wants this replaced by a “local impact test”.
The new test would require stations to provide evidence of local listeners’ satisfaction with their output.
He also recommended increasing the minimum number of local news bulletins broadcast each day.
Mr Myers also said the current law governing media ownership, which restricts common ownership of local newspapers, radio stations and television channels, was out of date and should be changed.
The intention of the law was to guarantee a range of voices in local media by preventing one owner dominating every news outlet, but many local media companies want the law relaxed so they can pool resources.
He said: “I suggest that competition legislation is itself sufficient to ensure plurality of voices within a market, making an additional layer of specific media ownership rules for local commercial radio increasingly redundant,” he said.
“There are economies of scale to be gained from integrating news operations for both local newspapers and local radio within a market, and this may prove to be the only way to ensure the continued existence of both local media.”
The Prime Minister delivered a keynote speech at a one-day summit of major players from the fields of broadcasting and technology on Friday, where the UK’s place in the new digital economy was discussed.
He said the digital revolution “lies at the heart” of Britain’s economic recovery.
The Prime Minister said and the country must embrace new media to compete on the global stage.
“Only by embracing a digital Britain and taking a lead in the global digital economy can we maintain our competitiveness as one of the world’s leading economic and industrial powers in years to come,” he said.