 Good morning, and welcome to the 15th meeting of the committee in 2019. I'd like to remind members and the public to turn off mobile phones and any members using electronic devices to access committee papers should please ensure their turn to silent. Agenda item 1 is a decision on taking business in private. Does the committee agree to take item 4 and any consideration of draft annual reports of future meetings in private? We now move to agenda item 2. That is an evidence session on local commercial radio. We have two panels today. Our first panel is representatives from OFCOM. I would like to welcome Glenn Preston, the director for Scotland, Tony Close, the director of content standards, licensing and enforcement, and Neil Stock, head of radio and broadcast licensing policy. Welcome and thank you for coming to give evidence to us today. I understand that Glenn Preston is going to give a brief opening statement. Thanks, convener. I will keep it very brief. I know you don't have lots of time this morning. Thanks for the invitation to discuss local commercial radio. I appreciate that it's a topic that's ignited a significant amount of interest in the Scottish Parliament more widely since our decision to amend the relevant guidelines last year. I did write to you earlier this week ahead of the appearance just to provide some additional context to the March briefing note that we gave you ahead of the global evidence session. I want to just take the opportunity to highlight a couple of points from that letter, if that's okay. The first is to put on record my apology that we don't appear to have notified the committee of last June's consultation, which you convener wrote to me about. You'll know we work hard to ensure that the Scottish Parliament committees—a good range of Scottish Parliament committees—are notified of all relevant OFCOM publications, of which there are several hundred each year. On this occasion, it looks like we've fallen short, frankly, and I'm very sorry that we did that. We are reflecting on what improvements could be made to our processes to avoid the possibility of that happening again. The second point that I was going to emphasise is that OFCOMs work in this area, which followed a detailed UK Government consultation and response during 2017, has been evidence-based and carried out in accordance with our statutory remit and duties. I have seen public questions that suggest that it's not within our remit, and we don't think that's correct. Section 314 of the Communications Act from 2003 requires OFCOM to carry out functions relating to local commercial radio services in the manner that we in OFCOM consider is best calculated to secure these services. The committee will know the localness guidelines were last substantially revised in 2010, and, as you'll also be aware, the markets changed dramatically with competition coming from music streaming services as well as from other radio services, which are either not regulated, such as internet radio, or are regulated less than analogue services, such as DAB and other digital broadcast platforms. We feel strongly that the flexibility that we've introduced responds to the pace of change in the media sector and enables radio groups to put more resources into programme making and less into the bricks and mortar costs of maintaining separate local studios, while simultaneously ensuring that listeners' expectations for high-quality local news and other content continue to be met. Thanks very much for the opportunity to meet with you today and we look forward to discussing these issues further with the committee. Thank you very much and I note your comments about the letter and the consultation. I think that you refer to the considerable interest in this topic, and I think that one of the reasons is that many people, certainly of my age, can remember when commercial radio in Scotland was extremely local and the considerable resources were put into local content, and we can already see that that has changed quite considerably. Now we are proposing another change that will again make content even less local, and that obviously has an impact on the creative economy in Scotland as well as the services to communities. That is why the committee is devoting considerable amount of time to this. I want to go back to your localness consultation of 2018. You received 46 responses, which are published in full on your website. The overwhelming majority of respondents were against your proposed changes. 35 of 46 responses disagreed with the changes, including MPs, businesses, members of the public, radio stations and even your advisory committees. In comparison, 11 respondents who agreed with your proposals were made up of the big players such as Global Bower, Radio Central, which has since been purchased by Bower. Can you explain why the views of the majority were completely ignored and disregarded? In reaching the final decisions that we reached on localness last October, we had to take into account a number of pieces of evidence. Obviously, the responses to the consultation were one of those pieces of evidence. When we are looking at responses to consultations, we are not only looking at straight numbers, but we are also looking at what people are saying to us, what arguments they are making, the weight of those arguments, the strength of those arguments, the extent to which they are based on evidence. For us, for any consultations, it is never just about a straight numbers game. The responses to the consultation were one input into our final decisions. Clearly, the research that we had done prior to our consultation was also important, not least because that was the main way in which we heard the voice of listeners. With the best word in the world, it is often the case that listeners do not respond to off-com consultations. It tends to be industry and other stakeholders. I think that we took into account all the evidence before us, including the consultation responses and the research that we had done, and tried to balance all those things in reaching the decisions that we did. Can you see why people would come to the conclusion that you are putting more weight to the evidence by some of the big players who had a particular vested interest in further deregulation? I am not sure that I would necessarily agree with that. Clearly, commercial radio companies are the ones that are regulated to deliver these things, so clearly their opinion is important to us, but it is not the only opinion that is important to us. That is why we did research and consulted to seek other views. As I say, I think that we balanced all the views in reaching that decision. Were you given audience research paid for by parties with a vested interest, such as global or power? No, we did our own research. You did your own research. You were not given any audience research by those companies. Correct. I am intrigued to know why there was such a rush in pushing those changes through, because DCMS has suggested that legislation would be ready by 2021, but the industry is currently thriving. Commercial radio, according to Rajar, made its biggest-ever profit last year, £713 million, and global themselves made a pre-tax profit of £25 million last year. What is the rush for that? I do not think that I would characterise it as a rush. You are right that the industry, the sector is doing very well and we would like it to continue to do very well. We want it to continue to provide a vibrant commercial radio model to listeners around the nations of the UK. It was clearly indicated to us that the regulations in this area would ultimately be removed by Parliament. That is obviously a catalyst for us thinking about whether or not the significant burdens that have been in place on commercial radio around localness were sustainable, advisable and should stay in place. It was also clear to us from the audience research that my colleagues mentioned that there was a different model of commercial radio that could be delivering for the interests of listeners, listeners who primarily tune in for music, or when they are looking for localness, I think about local content, not where the local content comes from. They are looking for news, traffic, travel, some local information. It seemed to us that it was the right time to not remove the obligations but to lessen those obligations on a commercial sector that needed to compete in an increasingly complex audio environment. It seems strange that you are saying that you are looking ahead but they are making a considerable amount of money. We have seen local content reduce over the years. People can remember when, for example, Radio Clyde would have had a Scottish playlist, for example, which was obviously great for the creative economy and music in Scotland. However, the playlist is now set in Manchester so that you have that uniformity. It is not just about news, it is about the whole creative content and the decline of localness. I think that we have seen some quite interesting developments in the Scottish market, even in the last couple of years, which would suggest that localness, in the way that you described it, is not quite the case. You will hear evidence from them later today that E.C. Thompson invested in commercial radio in the past few months with the purchase of original 106 and Kingdom. At the heart of that, it is a commitment to maintain local passionate teams to deliver that quality radio that you are talking about. We have another new entrance into the market in the west of Scotland, as I am sure you will know, convener, through Nation, for example, who I think have got some pretty positive figures coming out this morning as well, having taken over the licences in that area. In the region of just under 30 local commercial FM services that we licence across the whole of Scotland, community radio is also very popular with 28 services broadcasting over FM at the moment, with a further three applicants for licences following our most recent invitation for applicants. I think that the picture is actually quite positive. In terms of your consultation, you had views expressed from smaller companies such as Central FM, Waves Radio, Kingdom FM, original 106, CIBC, the Shetland Island Broadcasting Company and Wave FM, but you did not seem to take what they told you on board at all. I cannot recall the specifics of what they said, but the final decisions that we reached were based on the totality of the responses that we had, balancing everything that everyone had said to us against the research that we had done to reach a final view. I cannot remember specifically what those stakeholders would have said, but the ultimate view was based on the whole set of responses that we received. However, you are aware that there are numerous Scottish radio operators who are not part of larger radio groups who have expressed serious concerns about the impact on local communities of radio regulation. Are you aware of that? I have some other questions, but I will ask those later when it is my turn. I wanted to get to the knob of—we are 17 minutes in and I have heard quite a lot of words around consultation and taking a balanced view and looking at this holistically. I appreciate that you have gone through that process and came to the conclusions that you have and I accept those conclusions. However, with the exception of Mr Close, who perhaps started to touch on the reasons why you have ended up where we are, I still cannot see the top three reasons why the deregulation had to happen in the way that it has. I think that it would maybe help the committee as you are able to sell it to us a little bit better. I am happy to answer that. I do not know whether I can give you a top three, but I will give you my own view on why it is the right thing to do. Let us start with the fact that these are commercial businesses, commercial businesses that have to operate in a competitive environment, an environment that has changed significantly over the past 10 years with the entrance of big digital audio players into the sphere. They are not PSPs, their primary purpose is not to deliver public value in the way a public service broadcast should. For the last 10 years and before then, they have been a subject to a considerable public intervention, considerable requirements, significant cost burdens. I genuinely do not think that they are sustainable in the long term and I do not think that the argument can be sustained that they are the best way of delivering that amount of local content. I do not think that it was right for us to continue to have incredibly prescriptive loquinus requirements that told commercial businesses exactly what programmes they had to do at what time and how they had to do them. I think that it is inconsistent with the broader model of regulation. I am also conscious that loquinus is delivered in lots of different ways by lots of different operators. For me, the idea that the burden should continue to fall in the long term on commercial radio solely or primarily, it just seemed wrong. Can you ask what you think the consequences of not making change in the regulatory environment would have had on the commercial radio sector? It is difficult to say, but in the long term, I think that the significant, pretty extensive regulatory burden would have had an impact on their ability to compete, not necessarily against their immediate neighbours, their immediate rivals, but certainly against large streaming platforms. I have another small question. I may pick up on other things that people ask later, but I do not want to encroach anyone else's area. Given that these changes inevitably will lead to reduced volume of locally produced content, and I do not just mean news, because content is about much more than on-the-hour news, how do you think that off-combal will seek to ensure that there is a balance that people will still have access to broadcast services that will provide genuine, bona fide, local, radio, and that could be, for example, enhancing or assisting community radio? Do you mind if I start with that one and then I might ask my colleagues if they have got anything to add? You have already touched upon community radio. I am also going to add a note about Small Scale Dab, if you do not mind. It is important for us to think about the totality. While it is, you use the term inevitable, while it is highly likely that some services will consider lowering the amount of locally made content that they are producing for their commercial radio station, it does not mean all of them will. You may hear from some people after us who think that actually there is an opportunity here for them to increase the focus, the local focus of their commercial radio services, to counteract or to balance changes that other large commercial radio players may have, the decisions that they may make. In addition, there is a great opportunity for us to explore ways of ensuring that there are a broader range of community radio services out there and they have got a simpler way, an easier way of accessing audiences. It is one of the reasons we have been so keen to press on with our Small Scale Dab project, with the Government, one of the reasons we are so pleased with the opportunities that that will provide for smaller, less well funded, but ultra local services to get to the audiences that they want to. The other thing that I would highlight is that in our media nations report last year, and this is with a view to, as Tony said, a small scale Dab in digital future, Scotland was still slightly further behind the UK, 46 per cent in terms of changing or switching to Dab, compared to a UK about 50 or 51. It looks like, although I have not seen those in detail from Rage R figures this morning, that Scotland has jumped possibly eight or nine percentage points and is now much, much closer to the UK average over the last 12 months or so, which would suggest that we are seeing a shift in the use of new technologies that can offer greater choice. That is all very well and good, but, as many members will be aware, Dab is good when it is good and patchy when it is not. You can barely pick up BBC Scotland in Edinburgh in its broadcast, half a mile down the road. There are still issues around the technology, Scotland is a difficult place to broadcast to, and FM still is the king in that respect, and indeed should be. I am glad that you picked up on it, but community video is facing the same challenges that small scale commercial video has for a long time. It is not a surprise that large commercial operators are consolidating their ad sales businesses and indeed doing regional or national advertising models, as opposed to localised, whereas television has tried to go in the other direction and localise their ads more. Community video is entirely dependent on whatever funding it can get its hands on. If the ad market is sewn up by fairly large multi-regional operators or indeed the digital market, there is not simply much money left for funding community radio. Do you think that there is a role for government to play in securing those types of local broadcasts? I do not know whether there is a role for government to play. I think that I would start by saying that my experience of community radio has been that, by and large, it finds innovative creative ways of finding funding, not just funding through granted aid or through local donations but from a different set of advertisers, from the advertisers that might be looking to advertise on local commercial radio. Neil will correct me if I'm wrong or maybe add some detail, but we and the government have already undertaken and made changes in relation to community radio that makes it easier for them to seek commercial funding as a greater proportion of the funding that they get overall in order to help them sustain themselves. Yes, I think all I'd add to that is I think what small scale DAB should allow, and we invited expressions of interest in this last year and we had over 700, including a very large number from all places in Scotland, both from people who want to run just radio stations and people who want to operate the platforms on which those radio stations are broadcast. Once we can press ahead with this, we will see a huge increase in the ability for local radio stations of all types, community commercial to broadcast ones that don't exist yet or ones that are currently on FM who want to be on DAB. I think that small scale DAB is a tremendous opportunity to hugely increase the amount of local content if there are broadcasters out there who want to do that and think that there is a model that enables them to do it. I'd just say on the funding of community radio, DCMS does have a community radio fund and we're currently waiting for them to tell us whether or not they're continuing with it and going to put more money into it for another three years, but they haven't told us that yet. You've given some evidence this morning that indicates the feelings behind it, but in your letter, Mr President, you talked about proportionate changes. Do you really believe that those are proportionate changes when most of the industry believe that you've ripped the heart out of it? We do believe that they're proportionate and I don't think that we'd recognised that most of the industry are doing what you've described. I fear that I might be repeating what Niels said, but I think that when we looked at the evidence in its totality, we did think that that was a reasonable and proportionate intervention. Partly because of the significant market changes that are coming and they're going to be competing against over the course of the next few years. We're joined by George Adam MSP. George, do you have any interests, relevant interests to declare? Apart from enjoying local commercial radio, nothing, no? Can I ask a question about DAB, or DAB in particular? Isn't DAB quickly becoming the beat-a-max of radio? Technology is passing it by and new ways of listening to radio are available there. We've spent all this time and all this investment in DAB for backing the wrong horse. The deal would like to add something, but I don't know whether that's a question for us. You've been telling us today that DAB is the future, so I'm saying that it's a beat-a-max. It will be consigned to the shelf and forgotten about. Okay, I don't agree with the analogy. The FFM is still king. It is a public policy intention to move or to increase use of DAB in the UK. It has been for a while now, and it still is. Is the customer not key in this? The listener, the customer, they have not made that move. They are still listening to FFM. I think that Glenn might have even referred to this. I think that what the data shows is that they are listening to DAB in larger and larger numbers every year. But the most of them are still listening in FFM? No, I think that what we've seen today through their age are figures. I haven't had the chance to look at them in detail. That's not correct. We're now over the 50 per cent threshold. I think that it's possibly up to 54 or 55 per cent in Scotland. You're right that last year, when we reported in our media nations report, which we'll do again this summer, that in Scotland there were more people still using FFM services, it looks like there's been a significant jump in the last 12 months to more people using... Technologically, I wake up in the morning and say, Alexa, play whatever radio station that's the future and DAB is beat-a-max. It's something that people will talk about in the past. I think that we absolutely understand that view. I think that the new age are figures have shown that listening to radio through smart speakers is a huge growth area and I think that commercial radio has recognised that and has started to create skills to enable people to listen to their radio station. I think we recognise that there are different views around DAB and about its coverage. I think what the DCMS review that Margot James MP announced on Monday is seeking to do is to recognise that DAB is probably going to be part of a multi-platform future for radio and no one quite knows which part it will play, how big a part it will play. I think it's still important to the commercial radio industry and they may well tell you that themselves, but probably as part of a much wider future of multiple platforms, as you say, online and other ways of listening. I think that what this wide range review that the UK Government has kicked off is designed to see where does radio as a whole and commercial radio fit into this future of multiple means of delivering audio content, which platforms are important, where does DAB sit in that platform, will it become the beat-a-max and will everyone stop listening to it, in which case you might take a different view of the future of DAB, for example. For the time being, DAB is showing extraordinary growth and Glenn mentioned it previously, the amount of listening to digital as a whole, including DAB, but not only DAB, jumped quite significantly in the most recent set of RAGAR results. DAB ownership is now, I believe, higher in Scotland than it is in the UK as a whole. I think audiences are migrating to DAB. Clearly, it has been a lot more slowly than everyone would have imagined at the start, but there is a collective support, at least among the radio industry, for DAB, but as part of a multi-platform future. You mentioned RAGAR figures. Obviously, the only commercial licence that you have issued in Scotland in the past 10 years is nation radio Scotland. 96.3 has been a problem in the west coast of Scotland since it was in my hometown of Paisley as Q96 and moved on to various other stations. The figures have come in and that has been an absolute success. An absolute success. 50,000 listeners have managed to achieve, which was their first target. They pride themselves on the fact that their programming is made in Scotland, their presenters are Scottish, and the whole idea is that it is Scotland's voice. Back to the old days of commercial radio effectively. That shows you that there is an audience there for that type, but my question would be to yourself. That is the only licence that you have done in 10 years. Why? There is scope on the bandwidth to have more, to go down an American-type idea of city-based radio stations. We have a situation where we could have more than one commercial in our nation's capital here. Why are we not developing this further? We have said that we will explore in our final statement that we published in March whether there is scope for making FM available for commercial purposes. That is an internal conversation that we have started. There are arguments for, as you said, which are pro-competition arguments, greater choice, more local content. There are arguments against, given both the rapid market changes that Neil described and the scarcity of spectrum in some areas. You have used Edinburgh as an example where there really is a distinct lack of spectrum, apart from that, available for special events. We recognise that, if you take Edinburgh as an example, it has effectively one commercial station. That is a process that we are having an internal conversation about at the moment with an off-com, particularly with our spectrum colleagues, to look at where stuff might be available. You have two streams of thought in commercial radio at the moment. You have the Bowers and Globals, which is about creating a virtual network using local licences. You then have local operators like New Wave, which is now DC Thomson, which you mentioned yourself. DC Thomson is a media group that prides itself in its locality. Even in print, it has various editions of the local newspapers all over. It is a perfect fit for them, because the stations that New Wave had are city-based stations or area-based stations. Those are two distinctly different models of working. Those other stations have been very successful in their own area. You talk to somebody from Aberdeen, and they will talk about the Aberdeen station. Dundee will talk about the Dundee one. The whole point that I am asking is that there is not a way that you should be looking at that as a model and saying that there is scope in the band with it. I do not care what you are saying. I am aware from people who are experts in the industry that it is available. Could you not be looking at doing more than just one new licence in 10 years? That is exactly what we have said that we will explore. The short answer to your question is that we are going to look at that. I should stress that there are areas in Scotland where spectrum is scarce, but there will be other areas where it may be possible to make a commercial viable model of the type that you have described that nation or DC Thomson want to follow where it is possible to do that. We are going to look at that. I would add that small-scale DAB is also an additional opportunity to accept the comments that others have made about DAB, but that is another distribution platform for the likes of DC Thomson and nation broadcasting if they wish to use it. From other presenters who have thought of starting their own and using DAB as a platform, it is very expensive for them and they cannot do it if they were a new start to try to get some space on the local hubs. I think that one of the benefits of small-scale DAB is that the regime has been designed in a way to make it the technology that these multiplexes, which are the platforms for broadcasting, will be used, will be much lower cost. The public put DAB on the shelf and it becomes a beat-a-max and it is a flood. That is clearly why anyone who is interested in operating radio stations in the future needs to be thinking in a much more multi-platform way, rather than focusing on one or even two platforms. Will you not accept that you should be thinking that way as well as the regulator to try to make sure that we get the best for the customers? Our role is to facilitate where we can. As Glen has said, we are looking at whether there is FM as a suitable platform, whether there is spectrum availability. We are trying to make DAB more widely available as a platform. Clearly, we have no input into online. Anyone can start an online radio station at any time, and we have no regulatory regime over that at all. I think that community radio, we have talked about further opportunities for a different type of radio delivering local content. From our point of view, when we looked across the totality, what we tried to do is facilitate as much as we can opportunities for people who want to run the different types of models of local radio that you are talking about. First of all, I would like to touch on the letter that we received from ourselves today. I will be quite honest with you. You have already apologised this morning for omitting to contact this committee of this Parliament, and I think that we will all accept your apology. At the same time, it really is quite ridiculous that the Scottish Parliament has been ignored by off-com, and the MSPs were ignored by off-com when you went through the consultation last year. It did strike me that it was a touch of arrogance to forget to contact the Scottish Parliament. Do you want me to come back on that point? I think that we got it wrong. I do not know for definite that we did not contact you when we published our consultation in June of last year. I have tried to look back on it, and it does not look like we did. If that is the case, it is a mistake. Our normal practice, as you will know, not just for this committee but for other committees of the Scottish Parliament, is to share consultations across the breadth of what off-com regulates. We did share our draft and final annual plan for 2018-19 with this committee and with other committees, which contained our proposal to be doing work in this area. What I will take from this process is that, when we are doing our annual planning, which will be about October-November this year, what we will do is specifically highlight the programme of work that is going to be of interest to the individual committees in the Scottish Parliament. I think that that would be an improvement on our process. At the moment, we highlight that we have published it and we say that there are things of interest, but what we will do for this committee and particularly the Royal Economy and Connectivity Committee is to highlight the individual work areas that matter, we think, will matter most to the committee. I want to touch on the issues regarding DAB. I have never purchased a DAB radio. I never saw the need to do so. George mentioned the issue of the FM being so important. When DAB first started out, I think that the costs to purchase a radio were very expensive, a lot cheaper now of course, but they were very expensive. Today, folk can just go and download and access music very easily and from anywhere in the world. I am still a bit struggling to feel and understand why so much emphasis is still to be placed and also potential investment is still to be placed into DAB. As I said before, at the moment, the radio industry itself sees DAB as an important platform as part of a broader multi-platform future. Commercial radio itself invested in extending the coverage of some of the existing DAB multiplexes alongside the BBC and the UK Government, but commercial radio itself did contribute to that. I think that if the commercial radio sector sees DAB as important, there are characteristics of DAB in terms of being free at the point of use, a platform that the UK radio industry can control. There are benefits that UK commercial radio will see. I would not want to speak for them. They can speak for themselves, but certainly from our perspective we understand why a terrestrial platform, a digital platform as part of a multi-platform future, that UK radio controls and is free at the point of use for listeners, which is obviously very important. People expect radio to be free. It is a benefit rather than online radio stations where you need internet connection and ISPs. We can understand why, but as Margo James said on Monday, the broader question about the future of the radio industry is now not one specifically about is it analogue or is it DAB. That is just one sub-question of a much broader set of issues around where is UK radio going to fit into this brave new world of all of these new platforms and all of this competition? What is its path for securing its future? I would probably suggest that for more investment into apps, as computer DAB, I must limit it. On the issue of local content, I will listen to various radio channels throughout the day and over a weekend because I generally get bored very quickly listening to one particular station solely because the music is repetitive. Sadly, when you go from one channel to another to another, it seems to be the same playlist just in a different order. I know that it is commercial operations and they will take their own decisions from that perspective, but as Joan McAlpine said earlier, it seems to be that the playlists are set elsewhere. Is there not any type of work in the recommendation or suggestions that Offcom could put to the commercial radio stations to have more local content from music and from the creative side, as well as presenters? I do not think that my colleagues from Bower Media behind me would thank Offcom for telling them what their playlist should include. I am not suggesting the playlist, but I am suggesting that the level of the content may be percentages of the playlist. We are moving on to music format regulation now, which is an area that has been deregulated quite significantly in recent years. That is on the basis of proportionate regulation and which organisations are best placed to judge what their listeners want to hear. We think that it is the radio stations themselves. Where we have ended up is in a position where radio stations have the flexibility to play the music that their listeners tell them they want to hear. They may not be reaching you particularly or other people, but they will do their own research to determine what they think their listeners want to hear. In terms of music format regulation clearly, music is available everywhere now on all sorts of different sources. Again, similar to the argument on localness, there was clearly an argument to say what is the rationale for a specific subset of the media industry, i.e., local commercial radio, being regulated quite prescriptively around the kind of music that they play in the context of the amount of competition and the fact that if you want to listen to any kind of music now you can go and find it somewhere. I think that we have ended up in a position where commercial radio has maximum flexibility to a certain extent to play the kind of music. There are still some music formats that require slightly outside the mainstream music, but not very many. I think that there is an absolute recognition that a regulator doing a top-down intervention into music on commercial radio does not seem appropriate in this day and age. Certainly most of the songs I quite like, but when you hear them day after day after day it just gets a bit repetitive and sometimes it is good to have a variety in a playlist. You may wish to put that to the next panel. I would just like to briefly return to the issue of the consultation that the convener raised at the start of the session. The number of responses that you receive from smaller stations of kingdom FMs in this world raised their concerns. Their concerns were largely validated given the first moves off the back of those changes by global. If you were given the opportunity to respond to the concerns of those local stations, which I will say have that opportunity, what are the safeguards? What safeguards do you believe you have put in place to address the concerns that they raised during the consultation? Apologies for pausing. I am trying to remember the specific concerns that they raised because obviously deregulation is as much that they can take advantage of it if they wish, if they don't wish. I guess from the point of view of those smaller stations and again there are people on the next panel who can speak to this more directly. Deregulation gives them the flexibility to choose how they wish to serve their audiences better as much as it gives flexibility to the larger groups to choose how to do that and they will make different judgments about how they choose to do that. We have heard already about the differences between different local radio models. From our point of view, we understand that there are some concerns between different players within commercial radio about what their competitors are doing or not doing but I think overall the effect of the changes we made, which again I should point out, confers no obligation on any licensee to do anything at all. They just create flexibility. Some licensees clearly have already chosen to make changes, others will choose not to make changes. It is entirely up to them but I think for smaller commercial radio stations, I think the important thing for them is what is their business model for surviving if providing lots of locally made programming and lots of local content delivers them an audience which delivers them advertisers which let's not beat around the bush is what keeps them on the air, then they will continue to do that. If they decide they can't deliver a big enough audience to sell enough advertising then they'll make different choices but I think the flexibility is what's important here. It takes prescriptive regulation away to give them the flexibility to choose the model they wish to follow. I take your point of deregulation in theory giving the same flexibility to everyone but do you not recognise that inevitably in any sector, not just in radio, that flexibility is always going to be greater for the larger organisations who have the ability to be more flexible? Smaller organisations, in this case smaller stations, are to a significant extent protected by the existing or were protected by the existing regulation. In an increasingly deregulated market, the larger competitors are always going to be more competitive. While saying that even in the previous area it was true that larger groups are more able or capable of exploiting the regulatory framework or for working effectively within the regulatory framework, I do think it's also important for us to return to the fact that we haven't removed localness requirements from commercial radio. There are still, albeit at a lower level, prescriptive requirements for this commercial sector that impact as significantly on the larger players as they do the smaller players. With respect, the first change that came off the back of this was global change to for intense purposes reduce the localness. I accept what you are saying that you have not removed requirements completely but you have deregulated, loosened those requirements and that has resulted in a loss of localness. Do you not recognise the concern that comes primarily from local stations that in any deregulation they are going to be disadvantaged because the larger players are always going to be more able to take advantage of a more deregulated market? I'm not going to dispute the way that they feel about it. It's clearly their view. It is an opportunity for them, though, to create an environment in which they have a brand of localness. There is an opportunity here for more than one model, for more than one type of radio station, to exist in this market. That's what the flexibility provides. They don't have to follow suit. They can mark out a niche for themselves. To go back to the issue of the consultation, I understand that the advisory council in Scotland, which advises Ofcom, raised concerns. The concerns that were raised were about the research that was conducted by Candar in 2015, which I think Ofcom cited. That research involved listeners' preferences for local radio. The concern that was raised was that it appeared that very little data was collected from Scotland. In that regard, I understand that something like 151 individuals in total formed the basis of the research. If there were to be proportionality involved, that would mean that that research, which played an important role in what Ofcom then did, would have involved about 13 individuals from Scotland. Do you have any concerns about that? I'll come in first, and Neil Orton might want to come in behind me. There were actually two pieces of research. The Candar one that you referred to date back to 2015, which was qualitative and was a smaller sample, as you say. I think that there were sessions from memory in Falkirk and in Inverness. That goes back to 2015, and it was supplemented. The research to which we've referred throughout this session is a populist omnibus research that we did just before the June consultation in 2018. I think that it was over 1600 people across the UK. The Scottish sample was, I think, 155. It was proportionate, probably slightly higher than the Scottish population as well. It's that which forms the basis for our decisions about engagement or listening to what audiences have got to say to us. The qualitative research is really helpful, because it provides a colour and depth, as you'll know, but the further research that populists did independently for us is the one that's more statistically accurate. Are you saying that the Candar research has played no role at all in your subsequent decisions? No, I'm not saying that it has played no role at all. Not even 13 people across Scotland, but 13 people from Falkirk and Inverness. I have absolutely no problem with 13 people from Falkirk and Inverness being asked about their views. That's very important, but there are other places in Scotland. Absolutely. Our wider populist survey would have caught people from other bits of Scotland as well. All I said was that it provides us with a depth and knowledge and understanding of things—the qualitative research—to supplement or complement the wider omnibus survey that we did in the first half of last year. I don't really think that there's much more to be asked, but I think that the research figures speak for themselves. We've had lots of discussions about your regulatory role on television, where you're increasingly understanding that it's not just the numbers game Scotland is a nation and there are very diverse populations within that nation. Therefore, conducting a survey that has the Scottish content based on population share doesn't acknowledge that Scotland is a nation, a diverse nation. Even the survey that you're citing as the better one doesn't sound to me with 155 people as if it can really reflect the diversity of Scotland and the demands of the country. I'm not sure that I agree with that. I think that we're very careful in the design of these things to make sure that we do try and make sure that there's as much geographical diversity. It's not the only research that we do that informs this sort of stuff, so we have, for example, a news consumption survey that we do annually, which has a wider base as well. We're in the middle—you touched on television—we're in the middle of a review of BBC news and current affairs output at the moment where we're going to be doing both our news consumption survey and qualitative stuff next week in Stornoway and Dundee exactly to deal with those sorts of points. I'm talking about what I'm saying is that you seem to have maybe moved forward when you're looking at television in Scotland, but it seems the way that you've applied yourself to commercial radio. You've just looked at it as Scotland as a proportion of the UK population as opposed to a diverse nation of diverse communities with different needs. I think that the populist research that we did does address that point, because it had a wider geographical spread. I hear what you're saying. Kenneth Gibson. In there on, you talked about innovative and creative ways of finding funding with regard to community radio stations. My understanding is that quite a lot of them lead a hand-to-mouth existence. I'm just wondering if you would prefer to see a more long-term, more stable funding model than if so what that would be. I would. Do you have one in mind, though? Well, I mean, you're the regulator, so I thought you might have some ideas on this. You actually work in this area, and you've here to ask questions about that. No, of course. I don't have the answers for the long-term sustainability of community radio, but I do know that they currently draw on a range of different funding sources and funding models. I think that the big thing for us is making it easier for them to operate at lower costs so that they can maximise the value of the funds that they get. That's why, I don't know, people will be tired of us referencing it today. We were so keen to press head with small-scale DAB because it provided community radio stations with different ways of sustaining their model in the market that might very well be more cost-effective. So, basically, DAB is a less expensive way of being operating, so therefore that of itself will help long-term sustainability. Obviously, you were saying that there could be a significant number of new groups, a plethora of interest in terms of small-scale DAB, and that you would have something like 700 expressions of interest. What are those innovative and creative ways of finding funding? Can you give us some examples in case there are any people who are interested in taking forward those who might want to look at those creative and innovative ways of funding? If you don't mind, I'll go ask Neil whether he can talk through some of the funding models and sources that he uses. So, I'm afraid that we haven't actually got that data. The expressions of interest round that I referred to was simply a call for anyone who was interested in operating a radio service, whether a community radio service or a commercial radio service, whether one that exists already or one that doesn't yet exist, to run that service on small-scale DAB. So, it was simply a tell us where you are and who you are. We didn't ask them a whole series of questions about how they intended to fund themselves. That will come at the time when they actually apply for a licence when we have to judge things like their ability to maintain their service. So, at the moment, I'm afraid, we don't know what that looks like. They will have their own ideas, obviously, about how they think they're going to fund themselves. Okay. It's just that the evidence you said there were creative and innovative ways of funding them. I thought we might have some examples, given of what those are. That would be helpful to the committee. Can I be clear about that? Because I used the term there. I was contrasting the way that community radio currently draws funding from a variety of different areas and their lack of reliance that community radio has—the lack of reliance on the traditional advertising model. Okay. Well, thanks for that clarification. You talked about there being no online regulatory control. I'm just wondering if that is something you would like to see. I realise it's not exactly easy to do, because obviously online can be from any kind of source. Can you also tell us what impact do you think that might have on commercial radio going forward, the growth of online platforms? You said that anyone can set them up, so what impact do you think it will have on its having? Do you mind if we answer that in two parts? Of course I do. I'll answer the first, if you don't mind. Then I might ask Neil and Glenn whether they want to pick up the second. The debate about the extent to which or if at all online audio or online audio visuals should be regulated in the UK or around the world is a hot one. It's a hot topic at the moment. Ofcom doesn't decide whether or not the internet gets regulated or doesn't get regulated, but we are informing the debate in the UK by providing information on what might work and what might not work, what might provide consumers with greater protection or a greater quality of experience, and what probably couldn't be transferred from traditional regulatory models. Although the debate to date has focused on protecting people from harmful content online I would imagine the debate will grow and continue in the UK to focus on the competitive models, the economic models, and potentially how you secure public benefit from audio and audio visual services online as well, but that debate is at a very nascent stage at the moment. I think we referred to it earlier on in terms of part of the rationale for the changes we made was the continuing increase in competition from unregulated audio services from as you say, around the world, as much as they are from the UK. I think the impact will just be a continuing competitive impact on terrestrially broadcast radio stations in the sense that these are services that can come from anywhere, that can broadcast anything they like, and so they will just continue to act as increased competition, and that's probably only going to get larger and wider. Of course, for certain players like Amazon, for example, there are ways in which the Alexa devices could be programmed in a way so that if someone wants to listen to a certain type of music, they're directed to an Amazon service to play them that music rather than say one of the UK radio stations. I think there's a competitive challenge for our radio industry in its place in that world, given the extent of competition and increasing. What kind of level of competition are we talking about? Is it likely? Are you monitoring the growth? Is it going to be 1 per cent, 10 per cent, 50 per cent? What kind of threat is it going to have in terms of local radio stations to see in the future? Is this going to impact on further regulatory considerations in the future? So, the answer is we don't know, but we're looking at that, and also as part of the DCMS review, that is one of the biggest questions they're looking at, and I believe there's going to be some new research done, possibly by OFCOM, but also by other parties, to look into these questions. You know, what does the radio industry look like in 10 years' time, given all the increasing competition? How much of a share of all of listening will it have, given all this increasing competition? There's a certain degree of crystal ball gazing, obviously, at the moment. The amount of radio listening that's comprised of online listening is still relatively small, although growing quite significantly, partly through smart speaker use, but it's still small compared to traditional radios, we think of it. But clearly that is going to continue to grow over the next decade, and I think, as I said before, that the challenge for the radio industry is, rather than waiting for that to happen and then see where they are in 10 years' time. This is about thinking about what the route looks like now to prepare them for that future, rather than waiting for it to happen. I'm just going to add one thing quickly, which is that we are committed to producing the first of what will be, I think, an annual report called Online Nation, which will start to look at the evidence that exists in relation to your questions, which I think we're scheduled to do something over the next three or four months. I promise that I will share that one with the committee. It's worth saying that some of the most recent data that we had about the impact of streaming services like Spotify and Apple Music accounted for about 11 per cent of all listening in Scotland, and that was, I think, last year's data. I will be due to update that again over the summer, so I would only expect, as Neil said, to see that number beginning to rise. Okay, and just one last question, if I can, convener. You said it at the beginning, basically, in terms of response to consultation. It's not about numbers, it's about what is being said. Is it not just about who is saying it? Because I was concerned, raised by the convener, about the big players having more clout than others in terms of this, so is that something that you would accept? So there's no single respondent to a consultation that who would be given kind of greater voice or impact than any other, we treat all of them equally. So I hope that we wouldn't do that, we try to make the decisions proportionate decisions, as we said, based on the evidence in its totality. Okay, thanks. Thank you very much. I can just repeat the point that I made earlier, which is 35 of the 46 responses disagreed with the changes, and you did seem to go ahead on the basis of the responses from the big players. Can I ask members, no members indicated, they want to ask an additional question on Neil Findlay joining us as a substitute for Claire Baker today. Neil, just to be built in braces about it, do you have any relevant interests to declare? None. Yeah, just a kind of basic question. If we were putting all this to the side and you're starting from scratch, I see some of the later papers we're talking about reduced advertising, reduced hours of listening and cuts in the numbers of listeners. If we were going back to scratch and starting from the beginning, what would you do to reverse all of that? Would you do what you're doing? Would you mean the model of commercial radio? Genuinely, you're going to think I'm avoiding this question, but I don't think it's my job to come up with a brand new sustainable model for a commercial sector. Would you do what you're doing just now? Pardon? Would you do the same as you're doing just now? Do you mean alleviate regulatory burdens when I think it will help a sector to sustain itself in the face of increasing competition? Yes, probably. So there's three people who are involved in radio, and none of you can tell me what the optimum model would be. I think if I take your question to be if we were in the world, we're in now. If you're a blank sheet of paper and we were on Sunday City, go and design the way that commercial radio should be rolled out. I think it's a variation on Mr Close's answer, which is, in light of the multifarious ways in which consumers can access audio content now, local content and music content, would you impose significant regulatory burdens on one method of delivering that? No, you probably wouldn't, would you? So is it your view that we have a, it should be an open free market approach? That's a different question, obviously, because clearly we have an existing statutory framework within which we, as Ofcom, have to operate until the UK Parliament chooses to change it, which they haven't yet. But I was asking you on the basis if we didn't, if we had that blank sheet of paper, would it be of just a free-for-all, that'd be the best way, and let the strongest survive and let the rest sink? It's a hypothetical question. If you get from all of us, it's not one that we feel able to answer, but there will be scope for that sort of conversation in the context of the DCMS review into digital radio, because I think that that's, you know, they've accepted that the world has changed dramatically, as Neil said earlier, not just about a shift between analog and digital but all these IP-based multi-platform services. And it is quite an existential question that they're going to have to address in that view. So will you folks contribute to that consultation? Yeah, we'll certainly, we'll certainly in conversation, but we don't know the final terms or what the scope of that is yet. Alexander, you indicated you wanted to come back in. Representation, is it not vital to maintain audience's involvement in the whole process and diversity within that process? So going back to your comment we discussed earlier, do you believe your proportionate changes will help ensure that there's diversity within the industry? Yes, I think they'll certainly contribute to a framework where there could be greater diversity in the industry, but it really is up to the industry to take those opportunities. But you did a survey yourself that looked at how diverse the industry was and it was quite stark what you found was underrepresentation for women. I apologise, sorry. Different ethnic minorities, there were also, disability wasn't given much scope either, so if you're not engaging with that, then in your own way you might be deflecting your own audience base. Okay, sorry, I apologise, I thought you were asking a question about a kind of diversity of model of delivering local content in different ways, not about the diversity of the workforce of commercial radio. I don't think that there is a direct consequence of the work that we've undertaken to liberalise localised and commercial radio on the nature of the workforce when it comes to the characteristics of those who work in commercial radio. I don't know whether I could say confidently either that it would positively support greater diversity. I do know that OFCOM were doing an enormous amount of work though to hold the radio industry to account and the TV industry as it happens to better reflect the make-up of the UK as a whole when it comes to the people that they hire, the people that they promote, the people that they retain in their organisation and the voices that you hear on radio. But you've identified yourself that there's a long way to go for that to become the norm, so as I say, I go back to again, do you believe that your changes will actually enhance that position? I would suggest that it may not enhance that position. I don't know. That's my honest answer. It wasn't the primary intention of making these changes. It has the potential, given that it provides commercial radio with the flexibility to do things differently, to do them in a different way. It has the potential to impact positively on the make-up of their workforce, but I wouldn't say a hand on the heart that it would. Just to wrap up very quickly, what action will OFCOM take if listener choice is adversely affected by these changes? We keep all of these sorts of policy areas under review, and there's still scope for us if we feel that it isn't working to revisit things. We've barely started. The decisions were only made in the autumn of last year. Obviously, you have seen at least one player decide that they want to respond to that with changes, but we haven't seen it with others, but we will absolutely keep an eye on that over the course of the next few months and a couple of years. Thank you very much for coming to give evidence to us today, and we'll briefly suspend to allow for a change over in witnesses. I'd now like to welcome our next panel of witnesses. We have Graeme Brice, group managing director, HIT radio network, and Peter Davis, the project manager for Bower media, and Adam Finlay, the head of radio for DC Thompson media. We'll just go straight to questions, and I thank you for writing submissions. First, I address Adam Finlay of DC Thompson media. You are supportive of the proposed deregulation, but you have criticised OFCOM and DCMS because the underlying policy approach seeks to prevent existing commercial FM operators utilising any remaining FM spectrum. I wonder if you were able to elaborate on that and what the consequences are of it, and you'll have heard from the earlier section of the committee hearings that we are particularly concerned about. Do you know diversity of choice for listeners? I would start by saying that this is a concern that I have had for quite a number of years as we have been on a journey to greater freedom and deregulation for commercial operators across the whole of the UK and of course here in Scotland as well. I believe, along with my fellow operators, that we should be allowed a freer framework and greater flexibility to deliver local radio and that we need to take advantage of new processes and new technologies. That is correct. I have supported deregulation and the on-going journey towards deregulation for those reasons. However, I have long held the view that it needs to be balanced with an effective balance and check for how we continue to deliver local radio services into our communities across Scotland, in particular Scotland, where commercial radio enjoys a very unique relationship with the Scottish audiences, which is very different from that to the south, where we don't have a local BBC network, we have a nation's radio and local commercial radio plays an incredibly important role across the communities of Scotland. The absence and it's being picked up in this morning's committee, I was delighted to see by a number of the members, the absence of competition and local commercial radio operators across Scotland is why we find ourselves at this point in this journey, where we have been on the one hand pursuing deregulation and greater freedom for commercial radio operators to enjoy, but there has not been the check and balance and the proper level of competition in many markets in order to ensure that we have a rich, vibrant, diverse and healthy Scottish commercial radio landscape. That has been my view for a number of years that will come as no surprise to many people in the room that I've held those views and articulated them on many occasions to OFCOM and until this point, until today, they have been largely ignored. I was delighted to hear today that OFCOM have decided that they're going to review the opportunity for commercial radio operators to enjoy some more FM spectrum because that, in large part, is why we are now feeling this absence and this sense of loss that deregulation may bring. Right. Thank you very much for that. You obviously were listening quite intently to the first evidence session with OFCOM. Can I ask you what your view was on some of the answers that we members got when they asked about the consultation that OFCOM ran and the research that they used for that consultation? What I would say is that OFCOM, in terms of the deregulation journey, have listened to the commercial radio operators. Pretty much universally, with one or two exceptions, all commercial operators supported deregulation. I accept and I acknowledge that there are a number of other contributors to the consultation process who didn't share that view. I've heard this morning that that's been highlighted to OFCOM. In terms of where I'm sitting, in terms of a commercial radio operator, we supported deregulation and we submitted our response, which is publicly available for people to see. Where we were not listened to is where there is a need to continue to expand and allow commercial operators to expand on FM, as well as DAB. The DAB opportunities have not been under the same pressure as FM, but as a commercial radio operator in Scotland where we have a very different model from Bower and that's final global for that matter and we respect their model and we believe that they should be freely allowed to apply their model. It will be controversial and will attract views, but that's their prerogative, but we have not been afforded the same opportunity to expand our model, which is delivering local content in local communities across Scotland and that is where the injustice and unfairness and unbalance come from in my opinion. I was quite struck by the image that you painted in your written submission of the landscape in Scotland where you've got a large number of struggling community stations at one end and a tiny number of very large players at the other. I mean, I take it from what you're saying that that is a result of the regulatory framework. Is that just something that applies to Scotland or is it an issue across the UK? It's particularly acute in Scotland, but I believe that it would also, there will be examples across the UK as well, but my focus is principally on Scotland and therefore, you know, it's more acutely felt in Scotland. And there are communities. I mean, I sit here as a representative of DC Thompson and its new entry into the radio landscape, but I also, at the same time, believe, and this would be a DC Thompson value, that we have a wider responsibility to ensure a rich and vibrant and diverse media landscape. And so therefore, as I sit here today, I'm also mindful of Shetland Island Broadcasting Company in Shetland, obviously, Waves FM in Peterhead, who are equally under threat and under pressure as well. So, you know, as I sit here, my mind is cast towards not just the interests of DC Thompson, but what is in the best interests of the Scottish commercial radio sector as a whole. Thank you. Thank you very much. And before we move on, can I ask Peter Davis? You worked for Ofcom before you moved to Bower. I could see you smiling. I would imagine you were expecting this question. Did you move directly to Bower from Ofcom? No, I was an independent consultant for two years. What impact did you work for Ofcom have in terms of your role at Bower? Do you think that it helped to get Bower's views across in the consultation that was run into commercial radio? Part of my job is to help Bower to frame its views. I think that those views were fairly well defined anyway. Obviously, when you are a sort of gamekeeper, turn poacher, you have a different perspective on things, understandably, but having said that, I would hope that, when I was at Ofcom, I did understand the pressures that commercial radio was under and the need to serve audiences. It is about that balance. I think that it is about the same balance for Bower as a commercial operator. We are a commercial business, but it is in our interests to maximise audiences—that is how we make money. To do that, we have to offer audiences the sorts of services that they want to listen to, and that includes local content. Of course, we have a lot less local content in those services than we used to have. I can only speak from personal experience growing up in the west of Scotland, where radio Clyde was very much part of the cultural landscape. Many years ago, I had a role as a music journalist. I was quite familiar with the Scottish music scene back a long time ago in the 1980s and 1990s. A large part of that music scene was enabled by the role of radio Clyde, for example by giving young bands the opportunity to be heard. I have heard from Ofcom that the reason why we have now gone for these very restricted playlists set from elsewhere is audience demand. That is certainly not my experience. In the west of Scotland, over the past 20 or 30 years, there was a huge demand for local content. That is reflected in the fact that I believe that the football phoning programme on radio Clyde is the one that has the highest number of listeners. Clearly, you move away from local content right across the radio station. Is not necessarily what your listeners want? I will defer to my colleague Graham Brice on the music policy. All I would say is that, if you go back to those days, when radio Clyde launched in 1973, it was the only commercial radio station in Glasgow. There are obviously now a range of stations on FM and even greater number of stations on DAB. Of course, as we have been talking about earlier, on the internet, there are almost countless stations. The way that people access the sort of music that they want to listen to is much more open than it ever used to be. As Bower, we offer a wide range of music services. It is in a different way than we used to when we had to cram every type of music into one radio service. These days, people can choose the type of music they want to listen to at any time of the day. From Bower's point of view, we offer across the UK Jazz FM, Planet Rock, Kiss, classical music service Scala Radio and Country music service. There is a wide range of variety of music out there for people to listen to at any time. Local stations, if I may, I will let Graham answer that. I would disagree that I think that the listeners of Glasgow in the west really enjoyed the output that we have from Radio Clyde. Our content policy on that station and every other station is driven by a list of demand and what we think the listeners want to listen to. Although you may have your own personal views on it, one third of the people of Scotland listen to one of our radio stations every week. Our stations in Scotland are some of the most successful radio stations in the country where they perform the BBC in every single market in which we operate. We are number one in our markets in every single area of Scotland. We spend a lot of time ensuring that the content that we produce is what the listeners want. We research it, we research the music, we research the content and I think that we are very successful at delivering what the listeners want. I think that the rage art and the audience figures prove that. What are your audience figures for Radio Clyde now, compared to 20 years ago? Obviously, they are less than they were 20 years ago because it is more competition simple as that. 20 years ago Radio Clyde was the only commercial radio station in the marketplace and now with digital radio there are probably 70 or 80 competitors just on traditional broadcast media. Then there is online, there is Spotify, there is competition for listener attention from all sorts of angles. It would be wrong to compare the two but what I would say is that 20 years ago Radio Clyde was the biggest listener to the most listened to station in the market and it continues to this day to be the most listened to station in the market. Of course, we have already heard that there is not a great deal of diversity or competition which is probably reflected in the profits of the commercial radio stations but I will move on now to Tavish Scott. I have wondered if I could first of all thank you for mentioning Ian Anderson on SIBC. Can you just explain to me and forgive me the daffladi question but why do you want to expand on FM? FM is still where you are able to reach most of the audience so there were some interesting facts being applied this morning at this meeting which I found really interesting. There are a number of ways in which you can measure audiences across the UK here in Scotland. Up until recently, OFCOM used rightly so an extremely robust Rolls Royce methodology of measuring DAB and FM audiences in Scotland called tech tracker which they will be very familiar with when it measures a number of different things and it was regularly tracking DAB listing in Scotland at roughly between 10 and 12 per cent behind the rest of the UK in the same technology, tech tracker for the UK. About two years ago, OFCOM seems to have changed its position and which method or measurement methodology it is choosing to use to measure DAB listening and it now refers to RAJAR. RAJAR asks a different question about DAB listening from tech tracker which throws up a slightly different statistic. The committee needs to be aware that there are different ways in which you can derive at that answer and RAJAR will give you the highest possible answer so I would say that for a start. In terms of my ambition to expand on FM it is where the big money still remains to be for Scotland and in the short to mid term will continue to be where we can— I would say short to mid term. What do you mean, 10 years? I would say certainly the next five, possibly 10 but certainly the next five. At the end of the day, we as operators and I know Barrow will have the same philosophy, we need to deliver audiences to justify our advertiser results. I cannot do that on DAB because the way in which that date is collected I do not believe to be an advertiser or shareholder's interests at this stage and therefore I would be advocating that we should continue to be allowed to expand on FM but that does not meet the interests or the policies of that of Ofcom and therefore I have not been afforded those opportunities for the last 10 years and therefore my business has been frustrated because we cannot continue to expand on what is the economic platform and DAB continues to be part of a future platform at some point may become economically viable for everyone. I do not want to steal George Adam's thunder, but just so I understand it, is the view you have just suggested, the commercial radio view, is it broadly across the UK? I mean just mean Scotland but across the whole UK? By a number of my colleagues in commercial radio, mainly outside the major radio groups. Five years hence, you do not think the switch the consumer will make will be that considerable to other apart from Spotify and all these other you know these things here we're taking already on so on so forth but broadly speaking we'll still be listening to FM radio. I think one thing I would agree with it will be part of a multi-platform landscape I think that is true I think we need to be I think where Neil Stock highlighted that on a number of occasions I think that that's probably right but but therefore if that is the case can I please expand on FM like everybody else then. Thank you. George Adam. Good morning everyone. I can start by saying I'm a big fan of Clyde and radio Clyde in various forms Clyde1 because soundtrack to my life effectively but one of the things one of the things that although the playlist may be in Manchester now but one of the things I'd like to one of the things I'd like to ask is we heard from global and we heard the fact that they are networking virtually using local licenses to create a virtual network UK network you could be in the same position because you do network some of your output so what really my question would be what are your plans for the future with because you have some major brands there and Clyde 4th and also Murray FM as well so what is your future plans well as you probably know I mean we're not we don't make content choices based on regulation we make content choices based on what we think the listeners want to listen to so prior to the recent changes we do not go to the regulatory minimum for local content at the moment because we choose in many of the stations in which we broadcast to broadcast more content because we think that is what the audience wants so take radio Clyde for example we still run this to our football phoning show on a weekdays you know Monday to Friday six to eight and that is way above and beyond what we need to do from a regulatory point of view because we know that listeners love it and if listeners love it they're going to tune in and if they tune in potentially we can make some money off the back of that from advertising so we make our choices based on on what we think the listeners want and it's not just at radio Clyde in Murray 4th which you say now in Vernes we broadcast under the previous regulation way more than our minimum requirement so we're not going to be driven by the regulatory framework our lobbying around the regulatory framework is really about what the future may look like and and the flexibility for us as a business to adapt to that future because the future is changing as much as people would like to the world to be as it was 20 years ago listeners are moving their choices there's lists spending more time with national commercial radio they're spending more time with Spotify and other things so listeners are changing the environment in which we operate and similarly advertisers are spending the money in different places as well so the environment is changing around us we want the flexibility to be able to adapt to that environment but we're very happy with our business in Scotland and we are a very successful business in Scotland we've got you know very strong listenership and the balance of what we do at the moment between local and network I think is about right and I think we're pretty happy with that. Basically this is all about your stations in particular prided themselves in your local voice I think Clyde's catch line initially was your voice and radio absolutely so but effectively what I'm asking is your most successful shows in Clyde are the breakfast show which is the norm and the super scoreboard in the evening now they are so west coast they are so Glasgow a greater Glasgow you know do they not go against the idea of networking in your most successful shows are effectively you probably George Bowie would have to change his breakfast show if you networked him because his banter is effectively coming from a very weegee centric absolutely absolutely you know so but is that not the future for the radio station if you yourself because it used to be 24 7 absolutely so you know we have absolutely no plans to change George Bowie breakfast or super scoreboard because it is the audience love it so we have no plans to all we have looked for in this legislation and the changes is the flexibility should things happen in the future that might affect our business and the flexibility for us to adapt to that change because unfortunately the environment in which we are operating in is moving way faster than regulation can so we cannot foresee today what the future might look like and Peter's done a lot of work in our business he might want to talk a little bit about what he thinks the future look like in 10 years time but if the if the if the you know if the listener still love what we do is we do we're going to keep those shows as they are so i don't repeat her if you want to talk about how you think the world's going to move in in the next 10 years yeah sure so i mean we're in a long-term transition and so if you go back to 2007 87 percent of all listening across the UK was to AM and FM by the end of that of last year that was less than half we think our forecast are and it's and it's a fairly simple straight line extrapolation but if you follow that trend by 2025 we think AM and FM listening will be down to 17 percent so that digital by that point will be 83 percent now that doesn't mean it's all going to be DAB a lot of that we think is going to be delivered via ip via the internet to things like voice activated devices so we've got to to prepare for that world as i said earlier our interest is in maximising our audiences and that means going where the listeners are and if the listeners are listening on different platforms that's where we we have to invest on that can i ask you a very quick question on that issue how does our radio determine the rates and charging systems for their DAB multiplexes because we heard a lot about it so it could be an access for individuals to get on to the DAB multiplex how do you actually what that so the the prices are regulated by offcom that they are it's effectively the way that we operate is is we buy our services from archiva which is the the sort of national transmitter operator so so we pay them we then effectively lease out space on on the multiplex and we charge a regulated rate for that now it is because of the way that DAB works at least traditional large scale DAB it is more expensive for a small scale operator to go on to DAB because if you take say the Glasgow multiplex i can't remember exactly how many there are but there might be five or six transmitters required to serve Glasgow on DAB compared to on FM where you put one transmitter up so even though that cost is spread amongst the number of services it can be more expensive if you're a small operator wanting to go on on DAB to me from the outside looking in you've been in charge of the DAB multiplex it seems a bit strange if i'm trying to set up my own radio station it's going to compete against you it just seems bizarre well as i say it is regulated so there are there are conditions in the DAB multiplex license to allow for fair reasonable nondiscriminatory access so we cannot sort of treat anybody differently than the way we treat our own stations okay adam just on DAB you have over the years well you've basically said DAB you've agreed with my argument on that it's the beat-a-max of radio format but now you're applying for licenses for DAB as well why is that why have you had a epiphany or change of heart okay so just on the subject of DAB all i would say about the the first thing i'd say is that the pricing is Peter's right to say it's regulated to a point but it's also a market driven as i understand it a market driven price as well so you know and there are deals i mean there are different deals out there on different multiplexes there are some of my commercial competitors enjoying incredibly low rates on particularly northern DAB multiplexes they happen not to be a borough one actually and and we're getting charged an extortionate rate which is as peter says much higher than analog transmission so so there is this there are there are supposed free market forces at work on DAB carriage but i would suggest that where those market forces carry you know 18 90 percent of the multiplexes on brands i don't know whether that really constitutes a market force or not frankly so you know DAB and one of the challenges to DAB and one of the frustrations for all of us including people who own multiplexes or operators that own multiplexes is the slow progress of DAB growth it has been slow we got into this 20 years ago we didn't think we'd be here in 2019 where we are nobody signed up for that so it's been frustrating to answer your question specifically you're right original 106 has has decided to go on DAB for the first time the reason behind that is because about six months earlier we saw offcom who had taken down down south six months earlier there'd been a station in it switch specifically who had reapplied for its license and had decided not to go on DAB and the local multiplex owner applied for that registration license and won it and i believed that we were starting to see punishment rewards being handed out whereby if you weren't starting to you know move towards you know DAB carriage there was a risk that you were putting your analog license at serious risk and now offcom will apparently deny that clearly but you know as running a business we can't afford to take the risk of having our license being ripped away from us because we're not on DAB so the main reason and the main driver for us going on DAB is to protect our FM license from the very hard fist frankly of offcom's regulatory processes okay one final question we've got two specific models different models here one is a network similar but different to the global ideal the other one is yourself it's working in various cities and local keeping it extremely local as well my question to yourselves and Bower would be what percentage of Clyde one and fourth one is currently networked and with yourself Adam i would ask a similar question and how much of what your output is is locally sourced and local presenters and comes from the local area well first of all we would argue that that our content is local continuously 24-7 because just because the content is not broadcast from the location of that transmitter we believe we still provide extremely local relevant and engaging content and as we've argued throughout this whole process around deregulation i think the place of broadcast and what comes out the speakers are two very different things so i think we are still providing content that to the listeners is as relevant engaging and interesting and informative from a local point of view as it has ever been and hence why our stations are still number one and every single one of our markets it does so happen that some of that broadcast content is not from the location in which that is more than 50 percent i would have to look at i don't know the specific numbers for each station because each station is different so we don't have a one-size-fits-all as global does i said Clyde one so Clyde one all the all the content from Clyde is broadcast from Glasgow because it's the network center so 100% 24-7 it's coming out of that coming out of that broadcast studio some of that content will also be broadcast on some other radio stations so if you take Murray Firth for example Murray Firth is local 06 in the morning till 7 pm at night barring one hour so daytime is completely local and then the rest of it is networked apart from there's weekend shows that are local if you look at Dundee in Dundee we will have local breakfast and drive and the rest of it in in the weekday would be would be a network product so it's different for every single radio station but my concern is a lot of your fourth content for our nation's capital will be coming out of Clyde bank some of it is yeah some of it but but at the end of the day i think we're from our perspective the listeners love that radio station at radio fourth as much as they've ever done and they still tune in it's still number one in the marketplace one third of the population of Edinburgh listens to that radio station every week it is hugely popular and the listeners do not care that some of that content comes from Clyde bank because coming at the speakers is still a radio station that they love and that's the most important thing it's not about whether it's broadcast from from Edinburgh or not it's about where the listeners love it your model's different so what did you add to that so our original 106 in Aberdeen is 100 local and we would define local as coming from its area just to be clear about what we're defining as local wave ffm is 100 local coming from the Dundee area and kingdom ffm is 100 local coming from ffife but not one minute coming from anywhere else outside of their areas thank you very much jamey thanks convener um you said that the 100% of the Clyde content is coming out of the west coast is that the case on fourth or not no it's never I just explained that um that some of the content from on radio fourth or fourth one as it is comes out of Clyde bank because some of it is networked yeah so i mean is that reflected in the listening numbers i see that Clyde one is up it's reaches up 11% year on year Clyde two is up 30% reach year on year it's good numbers but fourth is down 16 and 19% respectively i'm wanting to is that a reflection of the way that you schedule not at all i mean i mean our audience figures tend to go up and down because surveys it's not an exact science but if you look at the trend of fourth over the last 10 years i think it's pretty much the same level of audience that had 10 years ago so there's no no downward trend apart from the general macro trend of less listening to local radio and more listening to national radio so there's a macro trend here where because of more choice in the marketplace people are obviously tuning into different radio stations because you want to hear a country music station or a classic music station or a rock station so there are people are accessing different stations there's a macro trend there but within that underlying trend our stations in scotland are in general pretty much where they were 10 years ago so there's no change to the audience of any significance from any further networking that we've done over that time period and would it be the case that if as a result of the changes to regulation and changes to the output or the structure of your output if that converts into a fallen audience number is obviously that's a worry to you as a fallen advertising revenue would you then seek to redress that and maybe reinstate some of that local content if you felt that it was having a negative effect on the network output absolutely and we've already done that so to give you some examples of that we a few years ago some of you may remember we networked in a Sunday morning show from england on our network in scotland and just as a trial to see if the sort of UK wide content would work on our network we felt as though it wasn't working we felt as though the listeners weren't living it as much as they were the scottish content so we reversed that decision so we brought it back to scotland and put it in a scottish show and similarly in the last few months we've actually taken the decision to take more of the content across our stations has gone back to scotland so we had a couple of network shows in the evening and friday night and a saturday night from england and we just felt that maybe it wasn't rating as well as we thought it could do so we've taken that show back to scotland so we are constantly moving the flex of the of the local content or network content or whatever it may be based on what we think the listeners will want and how we think we can maximise ratings so we're constantly making those decisions and if we feel as though we would get more audience today by broadcasting all of our stations 24x7 from the locality we would do that because it would make commercial sense we just don't believe it because we've done enough research and we see what the audience is doing moves with their feet and we think we've got the balance about right and I think you know the audience numbers can approve that that's very interesting um can I ask about regulation I mean you talked about going where the audiences are and if the audience is shifting to new forms of listening new platforms via devices and streaming consolidated streaming apps and so on um these these all these platforms are regulated in very different ways I mean obviously you have a broadcast license for FM, DTV and DAB digital and it is clearly a highly regulated market but anyone can set up a radio station online in fact they've just set one up in the last hour on a very well known streaming service it's not broadcasting anything but if I press the button it easily could and I could say anything on that I can play anything within like you know music licensed limitations um that's a highly unregulated market clearly is that a worry to you in the sense that do you feel that these these deregulated changes were absolutely necessary because in fact maybe commissary had been overregulated in the past but technology has moved much further and much faster than the regular environment which it operates I think that I think that's right I mean it's as I said earlier we're on a long-term transition here and as Ofcom said at the start the last time the regulation change was 10 years ago so in in making our argument for deregulation we had to think about the next 10 years and what that might bring and if in 10 years time it might well be that that FM accounts for five percent of all listening but it's still highly regulated um and that we're in that wild west as you say of everything being on the internet I don't think that's a well in some ways it's a threat to us but I think we also see it as an opportunity because it means we can launch lots of different types of radio stations we just have to change our approach uh and to try and maximize audience on on those different platforms I think that the reason for arguing for for deregulation is because if as I say in in 10 years time you've you've only got five percent on on listening on FM and that is is still highly regulated there would come a point between now and then where the amount of regulation on FM would mean it was no longer worthwhile to broadcast because it would be unviable and therefore if the regulation is reduced now then we can adapt gradually as we go over that next 10 years to try and maintain audiences on and services on FM for as long as we can in a way that's viable so it's about having that flexibility really to to ensure that we continue to serve audiences in the best possible way can I just can I just add something to that can I just add something to that which is I think one of the reasons why radio as an industry is in such good health at the moment is because of the explosion of choice for listeners if you look at digital radio in most markets people have the choice of at least 100 radio stations now and they are actively choosing those out there's choice online as you pointed out there's streaming services and everything else that's going on there so audio as a as an industry is very vibrant and I think that's good because there's more competition more opportunity more places that people can set up radio stations and launch new services and I think the consumers are loving that and I think we would welcome that you know I think it's a great place to be I thoroughly recommend MSP FM it's a great station so my playlist is super but Ms Finlayne before you come in maybe I can you can tie this in my question to you I mean obviously your model is very different you're looking at these in many cases struggling local stations are still working in that micro environment and a local ad sales environment with very localised content local DJs and so on do you think we still have a rather romantic view on on radio on the sense that we have to protect and preserve these whilst global power and the big boys have really nailed this networking approach and are managing to do both to both have networked output using technology and localised content where the audience wants it and when the audience wants it whilst trying to maintain you know you and you're very localised in the visual approach to to saving local radio stations I mean do you really think that can survive so I think that some people are wedded to a romantic approach to local commercial radio I'm not one of them it's the only model that I am able to apply because I've not been afforded the same expansion opportunities across Scotland that I've repeated on numerous occasions and therefore you know we have to ensure that our offering of difference to large networked big massive music led genre led choice platforms that has just been articulated by Graham and Peter we're not in that market we can't be in that market we can't afford to be in that market because the db carriages too expensive for us we don't own the multiplex by our own many of their own multiplexes and can afford to do that but because of the pricing structure we're not afforded that same opportunity on db nor have we been afforded the same opportunity to expand on fn by offcom so where do we go that's the heart of where this debate lies that is why we're sat here today thinking why are we suddenly feeling an absence and a drain of localness that is the heart of where this all lies so it's the broadcast costs it's the broadcast costs in particular the db costs and the lack of expansion on ffm to commercial operators including bower including global they've not been afforded the same opportunities to expand either bower applied for the Glasgow license that was talked about earlier that's now arrived at nation radio that was an appalling decision by offcom where they awarded that to both bower and ourselves expressed serious concern about how that license was awarded it lasted well didn't even last five minutes it didn't even get on air before it was sold highly predictable we have a letter i have a letter written to offcom saying wow that was a big surprise everybody was surprised by it nobody thought it was everybody by most people's measure thought that the winning applicant by far had the weakest application and the weakest model and it didn't even get to air before it was sold this is not a regulator who has been best placed to take best decisions about the future of Scottish commercial radio and that is why we're sat here today feeling this sense of loss and absence and lack of opportunity to expand on on commercial radio fact thanks very much um bringing Annabelle you in we're just picking up that point so would you say that offcom has outgrown its usefulness i wouldn't say that i wouldn't say that because at the same time as has been alluded to in this meeting in this committee that there is at the same time um you know a large number of digital disruptors arriving in our markets and you know both bower and ourselves and global are commercial businesses we pay taxes we make profits we employ people we contribute to the local economy significantly and you know there is still a degree of protection that is required across all radio operators the problem that i have had is i've not been afforded the same protection as everybody else i do not have the same relationship that the other big players enjoy with offcom and therefore operations like mine and there are numerous examples up and down the UK have not been afforded the same opportunity to expand and grow our business as we believe we could i believe we could populate in venice Murray edinburgh dundee actually edinburgh's got capacity for probably two or three new licenses frankly but we have not been afforded those opportunities meanwhile the larger groups have been given huge opportunity to expand at a rate of knots on dab and i actually don't think that that's necessarily wrong what is wrong is why i have not been afforded those same opportunities that is the unfairness no i hear light and clear what you're saying and in terms of the current structure it is not easy to see and indeed offcom's approach for example to this committee which it had to apologise for this morning publicly it's difficult to see in the short term how we can ensure that offcom takes its role in scotland more seriously and in fact understands what is going on in scotland so you know we will obviously reflect on the evidence we've received this morning turning to a broader issue and involving the other members of the panel you've always stressed that you do you know you provide what your listeners want okay fair enough at your commercial station so you would have to get that right in terms of your advertising and so on but how do you actually then seek to gauge just as a matter of curiosity how would you seek to gauge what your listeners want presumably you don't adopt the offcom 13 people in falcher can inverness approach or i don't know what you're doing yeah and we've obviously got quite robust research studies that we continuously take on a quarterly basis so we you know our studies really involve two two different types one is music research so we do music research so somebody mentioned earlier about our playlist decisions we research our music in scotland so whilst the playlist decision may be taken across the network as a whole the Scottish voices are a major contributor to that so their their tastes and interests are taken into account clearly and then we do we do straight audience research so we ask our listeners what this what radio stations they like you know why do they like them what presenters they like you know is it getting better is it getting worse you do they like particular shows so we do extensive research on that continuously so we you know it's it's our lifeblood if we get the content decisions wrong and the listenership goes down you know it's a it's a bad commercial place for us to be so it's at the core of what we do and in that regard i mean on the changes to breakfast shows and so forth is that engendered any particular reaction you mean in terms of what global is announced yes well you know there's clearly been some listener reaction from their particular listeners but i have to say you know whenever you make a change in radio whatever that change is listeners don't like it and it doesn't matter what that change is because you know the great thing about radio is people are really passionate about it and they love people have got you know real affinity and and affection and passion for their local radio station or their national radio station for that matter so if you make any changes whatever those changes are you know there's always going to be a kind of sense of loss from people who passionately love what you had before so there's clearly been some reaction from from the listeners around that we only have to wait and see what happens because at the end of the day if the listeners don't like the content that they're producing now they will not listen to the radio station and it'll end up in their audience numbers so only time will tell whether that's the right decision for them or not okay thank you okay thank you very much Stuart McMillan on the issue of off-com obviously we heard earlier on regarding it was 10 years ago when the last looked at regulation do you think that when anytime there's going to be any type of regulatory change that should maybe be kind of every five years to try to keep it as up to date as possible with with the current climate what I would say I'm just going back to that last relaxation of rules is Scotland was significantly disadvantaged back then by the way because Scotland was not a defined area so just just for a point of information even back then Scotland was being disadvantaged in that framework of deregulation because that deregulation was was was centred around defining areas and allowed stations to enjoy certain economies of scale Scotland was not one of them by the way so Scotland was disadvantaged in my opinion back then 10 years ago it was about to be disadvantaged again I know some people on the committee have opposing views to that but both Bauer and ourselves put forward submissions about the greatest widest possible level of deregulation that should be afforded to us both and we strongly believe in that I think but we also certainly DC Thompson certainly believe that that should be balanced with the continued expansion and rollout of FM commercial radio so I've repeated that a number of occasions in terms of future deregulation I think that this would this at this stage this has been fairly wide sweeping deregulation and you can see global have already made the decision as to how they want to take advantage of that and that's their prerogative and it is fairly radical and you know it certainly could not be a business model further away from DC Thompson's business model both newspapers print digital and now broadcasting so you know we will continue to support deregulation whenever that opportunity comes around but we'll also continue to apply our local radio philosophy because that's the belief about how we generate local audiences and create connectivity with local advertisers and create the career paths for future presenters which have just been significantly diminished in all of this as well so you know DC Thompson have arrived at Scottish commercial radio with a huge appetite to contribute and add diversity and enrich this broadcast landscape and I would only ask that those who are listening afford everybody including Byron Global the opportunity to continue to expand on all platforms not just one. I think the pace of change is accelerating so I would hope it's not going to be another 10 years before Ofcom have another look at this I think as convener said at the beginning DCMS announced that following their consultation in 2017 that they intended to bring forward legislation and let's hope there's a good robust debate around that legislation but that could be in 2021 who knows so I would hope that Ofcom will keep this under constant review really and if changes are needed to regulation whatever they may be and it could be for instance introducing new regulation on DAB if that is seen as the best way forward to protect localness who knows but yeah I would hope they keep it under review. Mr Rice? Not I think Peter's really speaking on behalf of bar so yeah I think exactly the same I think you know the pace of change is fast the more times we can review the regulatory framework to adapt to the current environment the better for more point of view. That's actually quite an interesting point I feel but usually people ask for some type of certainty and some type of stability when it comes to regulation but your cells are arguing for exact opposite because of the pace of change. Principally because the direction of travel in the regulation is deregulation so we've long argued that radio has been overregulated and I think history would provide that was true it's been overregulated so I think over time we are seeing some deregulation we would always vote for more deregulation as Adam at DC Thomas Wood as well so we still think radio has probably two owners of regulatory environment so anything that can accelerate that in an environment where we're competing against people who are completely unregulated that's the force that we're playing with. And just my final question just in terms of notwithstanding those points are there any other areas of support that you think the industry actually needs? The answer by saying you know we need the opportunity to expand further on FM and and there needs to be a more meaningful commercial clear path to a DAB future for stations like Shetland Island Broadcasting Company who have virtually no future in DAB potentially you know you know there needs to be small scale DAB which was cited this morning is not a solution to commercial radio for the future of DAB it's just not economical it's too small and we'll repeat many of the challenges that small scale FM has been suffering from the last 20 years so small scale DAB which seems to be hailed as some sort of you know silver bullet by Ofcom that this is going to somehow solve the gap that exists between commercial operators and a future to DAB is again like many of their policies fundamentally wrong for Scotland particularly so this what I would suggest is we need to be afforded the same expansion opportunities on FM that community radio has enjoyed and that all operators should be afforded that opportunity and there needs to be a massive rethink on the DAB pricing and access structure if we're going to have Scotland playing its part in a bigger DAB future because as it's currently structured it will not work unless you're part of one of the two larger radio groups I think there's also a question about that very long term or maybe not very long term I might be quite sort of medium term where the vast majority of listening is to IP delivered services of internet I think we have a concern that if that is the case there is no protection there to ensure that UK broadcasters whether that's TV or radio have proper access to those services if those platforms thinking particularly of 5G end up being controlled by by the likes of Google maybe or Apple or the mobile phone operators who don't have any interest at all in the content that's being broadcast that we could be effectively closed out of those platforms or at least charged exorbitant rates for them so I think as part of the review that DCMS have announced we would be looking for UK government to think about ways that they might protect the access of UK broadcasters to those platforms in the future in the interests of UK and Scottish cultural diversity. Thank you very much Neil Findlay. A question, Mr Findlay. Find name, of course. It seems to be deregulation and competition is what you want to see. Do you think that drives quality and success, ultimately business success for yourself? I think it drives quality and business success for everybody. I think it also offers choice locally which is at risk because of the lack of expansion on FM in particular and it would also ensure that the larger operators weren't so keen to vacate local markets because where they enjoy virtually a monopolistic situation, what's the incentive to stay in the market and deliver a local radio station when there's no choice anyway? If deregulation and competition across different platforms drives quality and success, you're also in the newsprint media. What was the circulation of Sunday Post say, 10, 20 years ago or the Bino 10, 20 years ago? How many copies would you sell? I don't have the information to hand if I'm being honest but I suspect it's less. And how many do you sell now? There'll be less I would imagine. I'll be hugely less. So therefore it does not just follow the competition and multi-media platforms drive success or I would argue quality. If we look at US TV, we have zillions of channels, most of them crap in my opinion, most of them spune out rubbish, so therefore I don't understand that argument that just says, liberalise everything, let's have a free-for-all and we'll drive success, we'll drive up quality and the future will all be bright. I understand and acknowledge that. With the newspaper sector and the print sector parallel to that point about content and quality and drive, there's been a fundamental change in consumer activity across the piece. Where and in particular the DC Thompson titles, for example, who have enjoyed higher than the rest of the UK sector circulation numbers, so in other words the rate of decline in the print sector is everybody's in that situation. DC Thompson are faring the best in Scotland in that fight and that is because of the quality of the content and the connectivity they have to their readers and their listeners, if you want to throw a radio into that mix as well. But I think the underlying and the underpinning failure for the print industry has been the speed with which it hasn't changed on to these new growth platforms. Conversely, Graham and Peter are right, radio has enjoyed that journey quite successfully. Internet and digital and app listening has not been the enemy of radio, it has been the friend of radio. It has created more access channels and more access points for people to enjoy their favourite radio station. I would just like them to have more local radio stations, but I think that Peter is also right in the point that he just made a minute ago. We need to still ensure that there is protection and that we are not thrown under the bus alongside the rest of the swamp of internet and webcasters that are out in the world, because at the end of the day everybody in this room, I would imagine, wants a rich, cultural, meaningful landscape for commercial radio. That is what we need to try to protect in and amongst all of this. There are a couple of items there that will ensure that. I think that it was Bower's paper that tells us that listeners' numbers are down, people are listening less, and commercial activity from advertising is down as well. Is that not the case? Well, I think that our paper said that listening to local commercial radio is down, and that is because we said earlier that the diversity of choice now that people have. In the old days, 20 years ago, the only radio station that people could listen to in Glasgow would be Clyde One, or Radio Clyde, as it was then. Now they can access 70 or 80 radio stations, so inevitably people are choosing to listen to that great variety of choice that they can now get whether that be classical music or country music or rock music or speech. A lot of people listen to LBC or talk sports or talk radio and all those other services. Clearly there is a fragmentation of audience among the channels, but in totality radio has got as much listening now as it had 20 years ago in terms of access, in terms of numbers, in terms of hours to listen to. It is just the fact that people are listening to less local commercial radio and more national commercial radio. Where there is a look, where there is a choice, that is not necessarily the case. For example, in Aberdeen, original 106 has just posted record high audience figures. It is 100% local and not on DAB, so Graham is right where there is no choice and there is only one local station and there is a plethora of new DAB genre stations coming in that their diversification is under way, but where you have alternative local radio choice, it does not always play it that way, and original has just posted a record audience figure yesterday. The way we want to go is like Mr Greene, that we all have our individual radio stations, we are all quite happy and nobody makes any money. You will not be making any of that for sure. Kenneth Gibson, please. Thank you, convener. The more I listened to the evidence session today, the more I wish we had taken the evidence from you first and off-com second, frankly, and I would hope that if we have a similar session in the future, that's the way we'll do it, because there's a lot of questions that I think have been generated from the evidence that you have given, particularly the direct contrast between what you've said about DAB and FM. For example, Mr Finlay, I've been getting a sneaking suspicion that you favour FM over DAB. I don't know how that's crept in this morning, but it seems to have done so. I do have real concerns about what you're saying that when off-com, I think that a fairly hostile is not the word for it, but certainly a kind of defensive evidence session that you gave compared to the more open one that I believe your panel has given. They talked about DAB, you know, the plethora of interests. They were obviously incapable of explaining none of it in creative ways. It would be funded that they said could happen, but no examples were given, but they said that there was a clear future for commercial radio through DAB, and yet you've specifically talked about, for example, Shetland radio, which is obviously of great interest to Mr Scott. We'd really struggle on that. How do you feel we can change things, actually? How off-com can change things so that FM is not, as you said, over-regulated relative to DAB, so that we do get a balance so that you are another local commercial radio stations can grow and thrive? Two answers to that. One is that we need to continue the roll-out of DAB across the whole of Scotland so that no community or any rural area is left disadvantaged by not having access to DAB. There are a number of areas across Scotland where DAB cannot be heard at all, and that needs to continue to be expanded out so that there is no community left disadvantaged. That's number one. Number two is that the pricing mechanism of DAB carriage has to be proportionate to what the radio station can afford, not a one-size-fits-all. For example, where you've got a community station or a small local commercial station, wherever that may be, the pricing for DAB access has to in some way be proportionate to what it can afford, and that's not currently the pricing model of DAB in Scotland or anywhere else in the UK. Those would be the two fundamental things that I would advocate could change significantly our journey towards a bigger DAB future. Yes, but at the same time, you're saying that that DAB future should not be at the expense of FM. I personally only ever listen on FM, so I'm completely in support of your point of view, and I don't want to see FM weakened. Also, at the beginning of your evidence, you talked about RAGEAR and the clear steer that I got from your evidence was that it seems to be heavily biased towards DAB, and it would have been wrong in saying that your view is off-comber, trying to create almost a stampede towards DAB whereby listeners won't really have much choice other than DAB. In the future, Mr Davis talked about only 17 per cent FM within a few years, so 48 per cent, I believe, is in Scotland at the moment, which seems to be a drastic reduction. How do you feel about that? Mr Davis, if you could respond to that. My personal experience with off-com the past 10 years is that they have looked at pursuing all policies that lead to a DAB future, and that has been evidenced through the lack of FM licensing and the continued roll-out of DAB across the UK. Off-com has been wedded to a policy of a future DAB. Sorry to interject there, but what do you feel is their motivation for that? At the heart of it, I think that at the very beginning of the journey, which started 20 years ago, the belief that we needed more choice in commercial radio across the UK and DAB affords more stations to use less bandwidth in the technology. I think that the motivation behind it way back in the day was to genuinely drive choice and so forth. The frustrating journey of the last 20 years—and it has been picked up by a number of people in the room—is that DAB has not enjoyed the success that we would have all hoped for the last 20 years. It has been slow for all sorts of reasons. I think that I mentioned earlier on about the price of a DAB radio when it first launched into the market. There are these black spots and you still continue to have FM fitted as standard in 95 per cent of all cars. We have a digital radio UK, which is effectively a PR machine for exclusively DAB, and they put out all sorts of headlines that people grab on to. One of their favourite headlines is that 98 per cent of all cars now come standard with DAB. That is true, but they still have FM. You are right. There is still going to be a landscape for both, and we should not be disadvantaged in one. To answer your question specifically, my own experience is with off-commerce that they have been wedded to our future DAB policy, which only recently has begun to flex with the approach that we heard this morning about a multi-platform future. That is new language for off-com in my experience. First, to add some balance to the DAB and FM debate, we truly believe that DAB is not the beat-a-max of radio, and that DAB is the future broadcast, one-to-many platform for radios and industry. There are many ways in which you can receive a radio signal, be it 5geb on an app, be it through Wi-Fi, but there are only two technologies that are broadcast technologies that are one-to-many, that are hugely efficient, robust and that you can listen to in any environment, and that is FMAM, analog and DAB broadcast technology. Whilst FM is a great technology, we truly believe that from a broadcast platform point of view, DAB is the future. It is going to be the future as part of a multi-platform future, but it is the broadcast platform of the future. Just to give you an idea about what we are talking about numbers, the facts are that over half of listening in the UK to all radio is now digital, over half. For our business, so for Bower across the whole of the UK, 70 per cent, 70 per cent of all listening to our radio services is digital. Mr Brice, Mr Finlay pointed out that there has only been one FM licence award in the 10 years, so surely if the big push is towards DAB, that is going to be inevitable, not necessarily because of consumer choice, but because they do not have as much choice. If we are going to maximise audience, surely FM should also be allowed to thrive as well as people being pushed down the road because I am not going to get my car changed to take DAB. I will just happily sit with FM for as long as it exists. Peter may be able to explain this better than I can, but across the whole of the UK in totality there is virtually no FM spectrum left, so it is not like loads of FM spectrum that could be advertised. There are pockets in Scotland where there are opportunities, but as the UK is a whole, there is no FM spectrum left and Peter will be way closer to this than I am. I think, as Graham said, that there are pockets where there is FM frequency available, but again, if you look at Glasgow, for example, where you can get 50, 60, 70 stations on DAB, there is no way you would ever fit that number of stations onto FM. The amount of choice that is available on DAB is potentially far greater and for us as a commercial business, that is where we see we can expand audiences. That does not mean that we do not believe in FM. We still obviously invest in our FM businesses. We have just bought 46 FM licences in England and Wales, so of course we still believe in FM, but it is about going to where we think that the audiences are so that we can maximise the commercial opportunities. I do not think that anyone is suggesting that there can be 50, 60 stations on FM necessarily in Glasgow, but five or six might be okay. Edinburgh is only having one, surely. One would have thought that there is still room for FM growth, is the point that I am trying to make, if we are to... It is just on that point that it is not true that... Edinburgh only has one, so Edinburgh has capital radio, it has heart, it has four, so there are three commercial licences. They may not be local, as in just for Edinburgh, but there are local FM licences that are broadcast in that marketplace. Mr Finlay? That is an interesting description of local. Thank you very much to our second panel today. We are now going to go into private session. Thank you very much for coming.