Can Saga fight off Virus radio attack?

Pete Waterman, the man who has produced more hit records than Kylie Minogue has eaten salads, finds himself fighting an unlikely opponent for the new radio licence in the North-west – old folk’s holiday and financial services company, Saga.

Waterman, who has proved he knows what the public wants, would seem, on the surface, the more likely of the pair to succeed.

He claims the company he’s formed for the bid, Virus Radio, will be at the “cutting edge of music radio”, and promises his stations would never have a playlist containing more than 20 per cent of top 40 material. Virus is also bidding for a regional licence in the North-east, which will be decided some months after the North-west one and is unlikely to start broadcasting before mid-1998 at the earliest.

Virus Radio already has other substantial backers including EMAP Radio, which will have a maximum stake of 20 per cent in the company, and Apollo Leisure, which owns restaurants and nightclubs and claims to be the UK’s biggest leisure company. EMAP Radio already has extensive radio interests in both the North-west and the North-east: Radio City in Liverpool, Piccadilly in Manchester, Red Rose Radio in Preston and Metro in Newcastle.

Waterman says he believes the Radio Authority, which will probably award the licence for the North-west in the autumn, is more open to fresh ideas and innovative programming than ever before.

Waterman, as part of impresario trio Stock Aitken Waterman, sold over 500 million records worldwide and launched the careers of Kylie and other, less memorable pop sensations. However, that was back in the Eighties and early Nineties so his claimed offer of “cutting edge” music will have to be heard to be believed.

But in an area already well served with music stations aimed at the younger audience, he promises something different.

“Its format will be unlike anything else in the area and that’s why I want to do it. I think the Radio Authority has changed its views on the licences it issues and frankly these two licences would not be worth going for if there was not a new optimism there,” Waterman says.

Saga, by contrast, is being advised by Michael Green, the former Radio 4 controller, and is pitching itself at the market it knows best: the over-45s, or “mature listeners” as it refers to them.

This is familiar territory to Saga – it has applied for licences before, unsuccessfully – but this time, according to informed observers, it is in with a good chance.

“Certainly in the North-west, the hole in the market is at the older end – the Saga/Radio 2-type audience is not well covered by commercial radio,” says Guy Hornsby, group chief executive of Kiss 102 in Manchester and Kiss 105 in Yorkshire.

“This market is the second most competitive radio market in the country, after London, and the younger end is well served by the Kiss stations and by Key 103. Piccadilly has moved so much towards the youth market it’ll have ‘Nellie the Elephant’ on the playlist soon.”

The licence is, of course, for the region rather than for a particular city and that, too, is likely to be a point in Saga’s favour, say observers. It will need to broadcast to a wide area to make itself economically viable – despite the demographic trend towards an ageing population.

The sort of market Saga is likely to go for is that served in London by Melody FM, which has proved successful enough to be copied by Radio 2, according to some observers.

“Is Saga ambitious enough to take on Radio 2 and Radio 4? It won’t be easy, but Melody has done a good job in London doing just that,” says Paul Robinson, general manager of Talk Radio and Country 1035.

Almost certainly, Saga and Virus will not be the only contenders for the licence by the time the closing date for applications is reached in August.

A bid for a talk station is likely to materialise, say observers and possibly, suggests Robinson, a talk station with a twist: a football station.

“It’s probably the perfect market for it. The region has plenty of the biggest football clubs in the country. There would be plenty of managers and players to draw on and there’s a huge football interest in the population, although obviously that’s predominantly a male interest. I’m sure it could work well,” he says.

There are other contenders: Chrysalis Radio, which owns Heart 106.2 and Galaxy 101, and saw its radio division revenue rise by over 50 per cent this year, is likely to bid. A local radio outfit called the Radio Partnership is also in the running, helped by former Virgin Radio programme director Mark Story.

For the moment, however, it’s a battle between youth, albeit in the unlikely guise of Pete Waterman, and experience. Despite Saga’s lack of success in the past, this time the smart money suggests its time may have come.