It's time to privatise Radios 1 and 2

The BBC has negotiated a £4m sponsorship deal. But one independent radio boss says this is commercialisation by the back door

It is clear to me the BBC's two prime national music stations are moving inexorably towards privatisation. What, for example, are the exact details of the chart sponsorship deal? Is any of that media value being passed on to the BBC licence payer in the form of lower costs? If so, the BBC is receiving commercial funding via the back door. If it isn't passed on, the consumer is being ripped off. We need to know the details.

The BBC needs to be transparent about its £4m deal with Worldpop, with the BBC pop charts being sponsored for the first time. The only reason that Worldpop agreed this deal is because of the huge amount of exposure it will gain on Radio 1. Radio 1 says it is not breaking any BBC guidelines, but the point is that they make their own guidelines.

If there is a saving for the licence fee payer, this is a commercial benefit in return for BBC airtime which must break the spirit of the BBC guidelines. If there is no saving for the licence fee payer, and Andy Parfitt [Radio 1 controller] has said that the charts will cost the BBC more in future, then the BBC has given away enormous commercial advantage to Worldpop to the detriment of those radio operators who rely on commercial income for their existence.

Looking at the state of music radio generally, right now we have the misfortune of living under a kind of oppression of the techie - people who only last year we ridiculed and despised as acne suffering, social inadequates. We have ignored them for the last 10 years and now they are enjoying their moment. It will not last. Content, creativity - rock and roll will once again rise to the top - technology is just a means of distributing our great content.

Let's consider content for a moment. Once again the soothsayers are saying commercial radio is doomed, we are going backwards, listeners are bored. We've heard all this before of course and it was proved to be spectacularly wrong. First it was a problem with all radio listening - the Internet, television, GameBoys and PlayStation are killing radio.

Now the gloom merchants are turning on the commercial sector. Can we first nail one myth - commercial radio listening is not in decline in any material sense. It isn't growing but it is not going backwards. The BBC is in growth and is, therefore, eating into commercial share.

But it would be dishonest of me, and frankly laughable, if I were to say that we don't have problems in the commercial sector. First, there is the issue of music positioning - in other words "why the hell is everyone playing Shania Twain". Second, regulation - in other words "why the hell is everyone playing Shania Twain". Third, the record industry - in other words "can we have some more Shania Twain acts please". And let's not forget the isc jockeys - in other words "just shut up and play Shania Twain".

We can start with presenters. The quality of presentation in local radio in particular is in need of attention. Our airwaves are infested with cardboard characters - I've been into newly acquired radio stations where the sales team are funnier than the breakfast jock and ended up putting them on air. We must break out of a circle of mediocrity which is a legacy of the late 1980s.

Radio One's music position is hurting commercial radio - but so are Mark and Lard. GWR has been widely criticised for its liner card policy and we will accept that our station re-launches of the 1990s were highly formulaic. But in our defence I would also point out that in that period I hired Scott Mills, DLT and Steve Wright and kept Chris Moyles on air in a key network position. Not one of those talents would argue that we didn't offer encouragement to their individuality.

It's not liner cards that's the problem, it's bad talent. The industry has grown so quickly we haven't managed to keep up the supply of good air talent. It is so painful to listen to the new stations and hear on air the former casualties of the big station in town. People who were released from contract, now unleashed on the airwaves again - with a vengeance. I was a jock and I realised just how crap I was - can't these people hear how bad they are?

There's only one way to fix it and that's for programme controllers to get off their backside and look for air talent elsewhere. Music positioning is an area we should also consider. There is an aversion to taking risks in both the commercial sector and the BBC. Music positioning has become the battle for the middle ground. Galaxy playing Shania Twain, Kiss FM playing Britney Spears. It is a function of too many operators. If GWR owned Galaxy it wouldn't put out two versions of the same output. It would cover off as much unserved ground as it could with its second frequency. If Capital owned Heart and Kiss it would spread its coverage of formats and music for optimum coverage.

This is precisely what's happened with consolidation of ownership in the United States where single owners now dominate entire markets - a study by the National Bureau for Economic Research in the US has demonstrated that concentration of ownership leads to diversity of ownership.

It seems to me that in digital radio where the multiplex owner/radio operator determines the bouquet of services, we end up with more diversity of output than when analogue licences are awarded by the Authority. Commercial radio is beset by cannibalisation - new entrants playing broadly the same mix as the market leader in town but with perhaps a few oldies and some more speech thrown in or a slightly dancier mix - that's not diversity, it's different shades of the same colour and the Radio Authority must look to its own licencing strategy if it seeks a root cause of this homogeneity.

It's not just commercial radio camped in the middle ground - the BBC is there too. Radio 1 and Radio 2 in particular. The re-positioning of Radio 2 has been a strategic triumph. You might think of it as daylight robbery in political terms but you can't argue with the obvious skill with which Moir, Douglas and Mullin have changed direction. Congratulations, you have done music radio proud. Similarly, Parfitt and Smith have produced two years of outstanding growth at Radio 1. Over the last 18 months the breakfast show had become once again formidable. The problem we are all now faced with of course, is that you have created commercial radio stations in all but one important respect - we, the public, pay the bill.

The arrival of Greg Dyke at the BBC brings some cheer to those of us in the commercial sector - wasteful bureaucracy, Byzantine management structures and an all-pervading mentality that the BBC is an end in itself, are all now under intense scrutiny from the new Director General - we in the commercial sector applaud that.

We also recognise that Radio 1 broadcasts more new music than hitherto commercial stations have done, that it puts songs on more quickly and that it is more committed to live music - no question. But there is a question of degree and a question of ethos.

We have new legislation imminent and in order to plan the next generation of radio from a listener and a business perspective, commercial radio must know where it stands. Up to this point the commercial sector has found the BBC's regard of it to be disdainful and somewhat arrogant. But in Greg Dyke and Jenny Abramsky we believe we have personalities we can respect, trust and do business with.

But above all we need them to be honest with us - it's not public service that is driving BBC Radio 1 and Radio 2 - it's market share pure and simple - and we believe that's not why you are there. Your big billboard posters and your excellent marketing campaigns, your superb TV ads - are all focused on building market share - where for example is your visible support for digital radio? What a service you could do to the listener and the industry if you started to promote digital radio with the same vigour, creativity and commitment that you invest in your drive for greater market share.

We face a choice - either move Radios 1 and 2 into the commercial sector or we use the spectrum genuinely for public service. Maintaining the status quo is neither an acceptable nor a just option. It's the former that gets my vote. A privatised Radios 1 and 2 would release pressure on public funding and provide a fantastic marketing channel for British business.

People said national commercial radio would destroy ILR - but look at the huge benefits that Classic FM, Virgin and Talk have brought to both the consumer and businesses. Privatisation of Radios 1 and 2 must surely be the next phase of development for us as an industry.

Whatever the conclusion of the debate it should be framed within the context of what is good for the listener, not what is good for the BBC.

Steve Orchard is director of operations at the GWR Group, which owns Classic FM and over 40 other music radio stations. This forms part of an address to Music Radio 2000