GWR must be wary of the traps waiting for foreign adventurers

Twenty years ago, the Canadians effectively took over the British commercial radio business, buying controlling interests in LBC, Capital and the national sales companies. A few years later, it was the Australians’ turn, and some say UK radio has only just recovered. Now the UK could be about to get its own back – in another Commonwealth country.

Last week, Britain’s second biggest commercial radio group, the voracious GWR, put in a bid for New Zealand’s largest group, just days after it had bought 12 of that country’s other stations.

At the same time, it mopped up its last piece of the UK industry, with a 24m takeover bid for East Anglian Radio. That will take it to its limit under this country’s ownership rules, with 33 stations (the maximum is 35) and slightly more than a 15 per cent share on points. A year after the Government relaxed the ownership rules, both GWR and the biggest radio group – EMAP – are as large as they can be.

Given that it can grow no further in the UK, GWR has no choice but to look overseas for expansion. Not content with its 17 per cent stake in Classic FM, which has stations in Scandinavia, Holland and the United States, GWR has just bought New Zealand’s Prospect Group, which operates twelve radio stations in Auckland and Hamilton as well as Independent Radio News, one of the country’s two major radio news organisations.

On Friday, GWR announced it had also submitted a bid for Radio New Zealand, put up for tender by the New Zealand Government, which has 40 per cent of the national audience.GWR’s expansionism must be welcomed by the Government, which wants British broadcasters to conquer the world. It relaxed the TV ownership rules in the hope of helping ITV companies expand overseas and must have found the response so far slightly disappointing (though Carlton’s recent Asia deal is full of Eastern promise). Perhaps radio may fly the flag more strongly.

But GWR’s foreign adventures must not be allowed to let it take its eye off the ball at home. For as well as buying East Anglian Radio, it was also part of the consortium that last month bought London News Radio and it will play a major role in the relaunch of the company’s two stations.

Given commercial radio’s recent poor record in the speech stakes, many in the industry will be hoping it succeeds. For the performances of the once-thriving LBC, its successor London News and the national speech station Talk Radio have been in inverse proportion to the success of the industry as a whole.

Last year, commercial radio’s advertising revenue grew by almost 23 per cent to 270m, making it Britain’s fastest-growing advertising medium for the third year in a row. Its share of display revenue now stands at 4.2 per cent, further dispelling its reputation as the “two per cent medium”. Although we have to take the latest RAJAR figures with a pinch of salt, much of that success is based on the commercial stations’ audience growth.

It’s a success that has eluded the speech stations, at least those based in London. Yet in its heyday, LBC managed to win audiences and critical acclaim, if not the commercial reward it deserved.

After a dreadful start, and its rescue by the Canadians, it pioneered 24-hour-a-day news coverage in Britain, creating an accessible but authoritative style – very different from the BBC’s at that time. It nurtured a generation of journalists, now to be found in every major broadcasting organisation, from ITN and the BBC to Sky and Independent Radio.

The reasons for LBC’s decline are still a matter for debate. Some put the blame firmly on the Australians who took over the station and squeezed out the British management, convinced that what worked Down Under would work in London.

Others blame the Independent Broadcasting Authority – working to the Government’s “increased choice” agenda – for forcing LBC to split its familiar service into two, under the threat of having to give up one of its frequencies.Either way, since the demise of LBC, neither London News nor Talk Radio has managed to establish itself as the flagship speech station that commercial radio needs and deserves. Quite the reverse.

Yet there is no shortage of strong, commercial news and broadcasting companies which should be able to provide such a service. ITN, which is part of the new London News consortium, is one. Whether GWR – with its track record in music rather than speech – is another, remains to be seen.

What is intriguing is that its main speech competitor is now controlled by the giant European media group, CLT – best known here for Radio Luxembourg and Atlantic 252. Talk Radio, already relaunched once after the failure of its American-imposed “shock-jock” formula, has now lost a second pair of programme and sales directors following the CLT takeover. Its new programme philosophy remains to be seen.

As GWR leads the UK’s expansion overseas, it must remember that, in a highly personal medium like radio, foreigners don’t always know best.