After a protracted offer period, Scottish Media Group has finally sold its national commercial radio business ‘Virgin Radio’ to Bennett, Coleman & Company Limited for £53.2 million cash. The sale does not include the licence to continue using the brand name from the Virgin Group, so the station will be re-branded and re-launched by its new owner in autumn 2008. This report argues that, although the value of Virgin Radio’s main AM analogue platform is diminishing, the value of the accompanying FM licence in London could be significantly increased by the execution of a successful turnaround strategy. The London licence alone could reflect the price paid for the whole business, if the station’s rock music programming were to be made more relevant to consumers and advertisers in the capital

UK commercial radio revenues increased by 6.7% in Q1 2008 year-on-year, resulting in four consecutive quarters of growth for the first time since 2004

Consumer take-up both of DAB receiver hardware and of listening to digital-only radio stations has been slow, in spite of considerable investment in content and in transmission infrastructure for the platform by the BBC and commercial radio since 1995

Encouraged by the way that Google has come to dominate the global market for online search advertising, Clear Channel and its rival CBS Radio are now eyeing the potential to dominate the global market for online radio advertising, and fend off Google. In July 2008, Clear Channel announced its plans to dominate the ‘internet radio’ market, by launching a ‘portal’ offering a vast array of radio programming, along with a new business unit to sell online advertising inventory. Although Clear Channel’s targets initially are US advertisers and US internet users, the company will likely target the UK market when it eventually decides to roll out its business model for online radio to the rest of the world. As a result, within the next decade, the UK commercial radio sector could face an additional source of competition from overseas media companies offering radio content delivered via the internet

UK commercial radio revenues fell by 10.2% in Q2 2008 year-on-year to £134.2 million, the sector’s lowest quarter since 2000. In Q3 2008, commercial radio revenues are expected to be down 9% year-on-year as advertisers, particularly those in the finance and food sectors, continue to respond to the economic gloom by cutting their radio marketing budgets

The second national digital radio multiplex, awarded by Ofcom in July 2007 to 4 Digital Group, has not yet been built, despite having promised a launch within twelve months

Channel 4 has announced the immediate withdrawal of its majority stake in 4 Digital Group, a new venture that was awarded the licence by Ofcom in 2007 to build the UK’s second national commercial radio DAB multiplex, and Channel 4 will not be launching its promised portfolio of broadcast radio channels

The obvious culprit is the weak economy, with mobile telecoms seeming to be more vulnerable to consumer cutbacks than previously thought, a hypothesis supported by recent consumer research

With European economic growth forecast to decline further, revenue growth is likely to drop below zero by the beginning of 2009, and then progressively worsen through 2009 as regulatory effects worsen, creating a very tough environment for mobile operators to preserve margins

The Copyright Royalty Board ruling issued on 2nd October gives the US music industry certainty on the statutory mechanical royalty rates payable to music publishers for 2008-2012

Following Channel 4’s decision not to proceed with its plans for digital radio, there is a glut of unused capacity on the existing national digital commercial radio multiplex (owned by Digital One) which threatens its commercial viability

The Nokia Comes With Music (CWM) service bundles a music-centric handset with an unlimited music downloads service, allowing consumers to easily take advantage of their handsets’ music functionality, and have no need for a separate iPod