on the race for a radio licence

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The Independent Online
Any doubt that radio is a sexy, profitable and attractive medium will be dispelled today when the Radio Authority receives up to 30 applications for the new London FM licence, to be awarded by October.

But not all the applicants can be taken seriously: as usual, there will be fly-by-nighters among them, supplicants who have not done their homework, and don't stand a chance of convincing the regulator that they can put out a commercially viable service.

Among the serious candidates, two stand out. Festival Radio has stellar backing (Mentorn Films, Time Out, Emap), a convincing business plan and a persuasive format. Aimed at the 25-34 demographic, featuring indie music and a promise to promote live music events around London, Festival will not be ignored by the Authority. The applicant says the station will have a weekly showcase in conjunction with underground music labels in London, and broadcast alternative music events, whether from trendy underground clubs or outdoor festivals.

Proof that it has hit upon a viable format comes in the form of a competing application with similar attributes: the trendy, young X-FM, backed by the Cure's manager, Chris Parry, and scheduled by Sammy Jacobs. If both applicants have done their homework (and to judge from material I have seen, they have), then the Authority will have little trouble awarding the licence to one of the two.

That leaves some wild cards, even so. (And to judge by the Radio Authority's track record, one can't complete reject the prospect of an off-the-wall award. Just think of Viva! or London News Radio or Premiere, the Christian radio station).

The wildest card of all is Capital Radio, the London giant, which led the lobby on the Broadcasting Bill to ditch the one-FM licence limit. Unfortunately for Capital, which wants to migrate its AM Gold service on to FM, it may have won the war, but will probably lose the battle.

Don't get me wrong: the case for a Gold service on FM is undeniably strong. There is currently no mainstream gold on FM, featuring hits of the Seventies, Eighties and Nineties. Capital Gold on AM gets 1.5 million listeners, but many of them have had to put up with losing the signal when they pass under bridges, and some of those equipped with state-of-the art home or car stereos can't much like the tinny, lifeless sounds they hear.

The point is proven by the industry statistics, which show that Gold is losing listening hours faster than it is losing listeners - a sure sign that poor-quality reception is to blame. Capital is believed to be predicting an additional 500,000 listeners within three years if it gets its FM Gold licence.

But hell hath no fury like a regulator scorned. The Radio Authority fought hard against the relaxation of the licence limits, and will no doubt wield its considerable discretionary powers to determine the "public interest" of giant Capital gaining an even bigger share of the London audience than it already has.

Capital may be interested to hear about the new acronym used informally by the authority to designate the public interest test: "the pits". "You've got that right," I can almost hear Richard Eyre, Capital's boss, say, as he learns next October that his dream of an FM Gold evaporates.

There are other candidates for the lucrative London licence, many of them convinced that they can meet the authority's three basic criteria: that any new service be financially viable, that it broaden choice, and that it enhance fair and effective competition. They include CLT, the Luxembourg-based owner of the semi-national Atlantic 252, which hopes to in-fill its signal in the South-east, and GWR, the fast-growing regional broadcaster. Also likely to be among the bidders is Saga, which probably came close to winning the Yorkshire licence last month with its over-fifties service. But the authority may argue that the older population already has Melody Radio. Saga is probably better off trying for one of the regional licences still to come, like the Solent.

Thereafter, the list for London gets a bit more specialist. Choice FM is offering an Afro-Caribbean format, while there are at least two gay channels vying for spectrum. A children's station, sports format and an all-business format are also in the cards. Good for headlines and ink, if not really in with much of a chance, is a bid for the 12-to 20-year- old audience, with broadcasting wonder-boy Chris Evans as frontman and money from the George Soros Foundation.

The only real certainty is that the mainstream rock formats, Virgin and Chrysalis's Heart, won't be going for a second FM licence. Neither can see any natural extension of their franchise in London, and both are heavily involved in making their existing services profitable. And if pushed, they'd probably admit that the Radio Authority is highly unlikely to award a second FM licence to an established player, despite the change in rules. The Radio Authority itself won't rule out the chances of a second FM, of course. They don't want to open themselves to judicial review.

Bottom line? My money is on either Festival or X-FM, with an outside nod for Saga (the authority sometimes appears to reward persistence and consistency). Capital is a definitely a long shot, despite its impressive research.

The niche players will fail on one or more of the criteria. Financial viability will be one insurmountable hurdle for some applicants, who probably can't even afford the pounds 100,000 or so it takes to mount a professional bid.

But then, I didn't think Viva would win its licence. One should never underestimate the Radio Authority's capacity to surprise.