Analogue Commercial Radio Licence: Format Change Request Form

Date of request: 25 April 2017 Station Name: Town 102 Licensed area and licence number: AL000308BA/2 Licensee: Celador Radio Broadcasting Ltd Contact name: Paul Smith

Details of requested change(s) to Format

Character of Service Existing Character of Service:

Complete this section if you are requesting a change to this part of your Format Proposed new Character of Service:

Programme sharing and/or Current arrangements: co-location arrangements Town FM AL308-1 to share all programming Complete this section if with Dream 100 AL054-3, and the new service you are requesting a will remain located at the Town 102 office at change to this part of your Great Blakenham near Ipswich IP6 0LW where Format all programming is made. Proposed new arrangements:

Town FM may share all programming with 99.9 Radio , North Radio, The Beach or Dream 100, with the service originating from Radio Norwich.

Locally-made hours and/or Current obligations: local news bulletins Locally made hours: Complete this section if At least 10 hours a day during daytime you are requesting a weekdays (must include Breakfast). change to this part of your At least 4 hours daytime Saturdays and Format Sundays.

Local news bulletins: Hourly at peaktime weekdays and weekends. Outside peak, UK-wide, national and international news should feature.

Proposed new obligations:

Locally made hours: At least 7 hours a day during daytime weekdays (must include Breakfast). At least 4 hours daytime Saturdays and Sundays.

Local news bulletins: At least hourly during weekday daytime and at peaktime weekends. UK-wide, national and international news should feature at other times.

The holder of an analogue local commercial radio licence may apply to Ofcom to have the station’s Format amended. Any application should be made using the layout shown on this form, and should be in accordance with Ofcom’s published procedures for Format changes (available on our website at http://stakeholders.ofcom.org.uk/broadcasting/radio/formats-content/changes/ )

Under section 106(1A) of the Broadcasting Act 1990 (as amended), Ofcom may consent to a change of a Format only if it is satisfied that at least one of the following five statutory criteria is satisfied:

(a) that the departure would not substantially alter the character of the service;

(b) that the departure would not narrow the range of programmes available by way of relevant independent radio services to persons living the area or locality for which the service is licensed to be provided;

(c) that the departure would be conducive to the maintenance or promotion of fair and effective competition

(d) that there is evidence that, amongst persons living in that area or locality, there is a significant demand for, or significant support for, the change that would result from the departure; or

(e) that (i) the departure would result from programmes included in the licensed service ceasing to be made at premises in the area or locality for which the service is provided, but (ii) those programmes would continue to be made wholly or partly at premises within the approved area (as defined in section 314 of the Communications Act 2003 (local content and character of services)).

Only one of these five criteria need be satisfied in order for Ofcom to consent to the proposed change. However, even if Ofcom is of the opinion that the proposed change satisfies one or more of the statutory criteria, there may be reasons (depending on the particular circumstances of the case) why Ofcom may not consent to the proposed change. The additional criteria to which Ofcom will have regard when exercising this discretion can be found at: http://stakeholders.ofcom.org.uk/broadcasting/radio/formats-content/changes/ )

Applicants should note that, under section 106ZA of the same Act (as amended), a proposed change that does not satisfy the first or last of these criteria (i.e. a change that Ofcom considers would or could substantially alter the character of the service, or does not relate to the origin of locally-made programmes) must, if it is to be considered further under any of the other three criteria, be consulted upon. #.

In the event that Ofcom receives a request for Format change and considers that criterion (a) or (e) is not satisfied, it will seek confirmation from the applicant as to whether it wishes to proceed with the request (and, if so, whether it wishes to amend or replace its submission in light of the necessity to make it public).

Please set out the statutory criterion, or criteria, set out in section 106(1A) of the Broadcasting Act 1990 that you believe is/are satisfied in relation to this Format change request, and the reasons for this:

(a) Our proposal would not in any way alter the character of the service. Town 102 would remain “a locally-oriented broad music, news and information service for listeners, particularly those aged 25+, in Ipswich, with a strong commitment to local issues.” In particular, the station will benefit from the same commitment to local news and information that all Celador stations carry. Local news bulletins, produced specifically for Ipswich, will run 0600- 1900 weekdays and 0800-1300 weekends, with local headlines on the half- hour during weekday breakfast. Additionally, split links specifically for Town 102 will include other local information, including weather, travel, sports news and what’s ons.

While we intend to locate our regional broadcast centre in Norwich, we will continue to maintain a local sales office and news broadcast studio in or around Ipswich, to cover the southern part of the region. The two journalists here will provide easy access to local events and newsmakers in and north Essex, as well as ensuring that, at all times, there is a journalist no more than one hour’s drive from any part of the region to provide emergency coverage of a major event or breaking news story.

Given our commitment to providing an enhanced local news service, we are also requesting that the hours of locally-produced programming (defined as coming from the regional broadcast centre in Norwich) be reduced from 10 to 7, in line with Ofcom’s published policy in its Localness Guidelines issued in September 2010.

(b) Since the character of the service will remain unchanged, the range of programme services available from local independent radio in Ipswich will also remain unchanged. In both its music and speech content, as well as its commitment to localness for Ipswich, Town 102 will remain clearly distinct from its competitors.

(c) As we detail below, the principal reason for this request is to protect the financial viability of Town 102 for the remainder of its licence term and beyond. Currently, the commercial radio market in Ipswich is dominated, in terms of both audience and local revenue, by Heart. Town cannot compete effectively while it remains financially insecure and lacks the resources to maintain a high quality service, let alone market itself and build its audience. The cost savings that will result from co-location and programme sharing with Norwich will ensure the long-term sustainability of the service, and thereby promote more effective competition in the provision of local commercial radio in the area.

(e) Ipswich is in the same ‘approved area’ as Norwich.

Please provide any additional information and/or evidence in support of the proposed change(s) below. In particular, the applicant may wish to outline how they see that the proposed change fits within Ofcom’s published Format change request policy and also Ofcom’s Localness guidance, which includes our co-location and programme sharing policy.

This request is being made in conjunction with an equivalent request for Dream 100 in Tendring. Town and Dream are currently permitted to be co-located and share their programming, following a change to the stations’ Formats requested by Anglian Radio’s previous owners and approved by Ofcom in November 2016. At the same time, Ofcom approved a request from Anglian for its other three stations in the ‘approved area’ – Radio Norwich, and The Beach – to co-locate and programme-share from Norwich.

Celador Radio acquired Anglian Radio in January 2017. The Anglian group was running at a significant operating loss, and building up substantial debt as a consequence. Our outline analysis (which is attached, in confidence, with this request) suggests that, if no measures are taken to reduce costs, the Anglian group would be burdened with an overdraft of about £1.2m by April 2018, in addition to a debt to Celador of £1.4m. Anglian had already defaulted on this latter debt, so interest on it of 4% is now being charged. There is currently no schedule of repayments for any of Anglian’s debts because the group’s cashflow could not sustain such a strategy.

Substantial cost-saving measures are required to re-establish the financial viability of the Anglian stations, allow for investment in marketing and programming quality and service the company’s significant debts. By consolidating the five stations into a single regional broadcast centre, we have identified savings of some £300k pa in overheads, plus an additional £89k in capital expenditure. We are optimistic that these savings would allow the Anglian group to achieve operating profit by 2020.

These are small radio stations. Town 102 has an MCA of 155,000 adults, well under the 250,000 mark below which Ofcom has determined that there is a stronger case for co-location and programme sharing.

We believe that Norwich, rather than Ipswich, is the more appropriate location for an East Anglian regional broadcast centre. Norwich is the historic ‘capital’ of East Anglia and is the location of regional institutions such as the University of East Anglia and the region’s only international airport. It is the home of the region’s other major media outlets, including BBC East, ITV Anglia and Archant newspapers, publisher of both the Ipswich Star and the East Anglian Daily Times (covering Suffolk and north Essex).

On a practical note, the group’s current premises in Ipswich are more expensive than those in Norwich, so co-locating the group in Norwich will ensure greater cost savings. Additionally, 20 members of staff are based in Norwich, compared with 15 in Ipswich (8 of whom are sales or news staff who would not need to re-locate), so establishing a broadcast centre in Norwich would be disruptive to fewer people.

Notes # Ofcom may approve a change under any of criteria (b) to (d) without consultation, or after a consultation of less than 28 days, if Ofcom considers that to hold a consultation at all, or for 28 days or more, would result in a delay that would be likely to prejudice the interests of the licensee. Ofcom may also remove for the purposes of consultation any confidential information submitted by the licensee.

Version 6 – amended April 2010

Background to the Decision

Town 102 broadcasts to Ipswich and the immediately surrounding area. The licence is held by Town 102 Ltd, the ultimate parent company of which is Celador Radio Broadcasting Ltd (‘Celador’).

Celador has requested the following changes to Town 102’s Format:

• To co-locate Town 102 at the studios of the Norwich licence (Radio Norwich) in Norwich. Town 102 currently broadcasts from studios at Great Blakenham, Suffolk, within the Measured Coverage Area of the Ipswich licence.

• To share all local programming hours with the Norwich (Radio Norwich), & (The Beach) and North Norfolk (North Norfolk Radio) licences. This would be in addition to sharing all local programming hours with the Tendring licence (Dream 100), for which Town 102 already has the necessary permissions.

• To reduce the required number of local programming hours on weekdays from ten to seven per day.

• To provide local news bulletins at least hourly throughout daytime on weekdays. Town 102’s current Format requirement for local news on weekdays is at least hourly at peaktime (defined by Ofcom as being breakfast and afternoon drivetime).

Every FM local commercial radio service is required to broadcast a certain amount of locally-made programming, which is specified in its Format. Locally-made programmes are those made within a station’s licensed area or, where Ofcom has approved a wider area relating to that station, that “Approved Area”. All the licences involved in this request are in the East Anglia Approved Area except for Dream 100, which is in the Essex Approved Area.

The requests listed above would change Town 102’s character of service as set out in its Format, and accordingly can only be agreed if Ofcom is satisfied in relation to one of the statutory criteria set out in section 106(1A) of the Broadcasting Act 1990.

These criteria are:

(a) that the departure would not substantially alter the character of the service;

(b) that the departure would not narrow the range of programmes available by way of relevant independent radio services to persons living in the area or locality for which the service is licensed to be provided;

(c) that in the case of a local licence, the departure would be conducive to the maintenance or promotion of fair and effective competition in that area or locality;

(d) that in the case of a local licence, there is evidence that, amongst persons living in that area or locality, there is a significant demand for, or significant support for, the change that would result from the departure; or

(e) that, in the case of a local licence – (i) the departure would result from programmes included in the licensed service ceasing to be made at premises in the area or locality for which the service is provided, but (ii) those programmes would continue to be made wholly or partly at premises within the approved area.

It is important to note that the legislation leaves to Ofcom's judgement the decision as to whether to permit a change, even if one of the above statutory criteria is satisfied.

Ofcom has published details of the policy criteria that we will take into account when considering a request – such as this one – from a service to co-locate and/or share programmes with a service, or services, in a different “Approved Area”. However, there may be other factors to be considered, and all requests are treated on a case- by-case basis. The factors Ofcom have published are the following:

• Size of station: there may be a stronger case for co-location and/or programme sharing where at least one of the stations has a licensed area with a population of fewer than 250,000, and especially those under 100,000, although we would not rule out requests from larger stations in exceptional circumstances.

• Distance and affinity between the areas: there is likely to be a stronger case for co-location where the stations concerned are not too far apart geographically and are able to demonstrate a cultural affinity between the two areas.

• Financial: there may be a stronger case for co-location where stations can demonstrate that co-location is required to ensure the financial viability of the stations concerned.

Decision

Co-location and programme sharing

We first considered Celador’s request for Town 102 to move from Ipswich to Norwich and share its programming with the three Norfolk stations, noting that, like Town 102, these three stations are located in the East Anglia Approved Area.

With regard to the co-location aspect of the request, Ofcom was satisfied in relation to section 106(1A)(e) of the Broadcasting Act 1990, on the basis that the change requested, if approved, would result from programmes included in the licensed service ceasing to be made at premises in the area or locality for which the service is provided, but that those programmes will continue to be made wholly or partly at premises within the East Anglia Approved Area.

In assessing the programme sharing aspect of request, we attached considerable weight to the fact that the key local material strands – local news bulletins, weather and what’s on information – will continue to be delivered on a bespoke basis for each licence area. This means that Town 102 will continue to broadcast local news bulletins tailored specifically for the Ipswich area, and that “split links” will enable Town 102 to continue provide localised weather, travel, ‘what’s ons’ and sports news for the Ipswich area. We noted that Celador intends to retain a local sales office and news studio in Ipswich, at which two journalists would be employed to provide local news for Suffolk and North Essex.

We also recognised that the music output on Town 102 would remain the same, given all five stations involved in this request already share the same playlist.

For these reasons, we concluded that the proposed programme sharing arrangements would not substantially alter the character of the service, and therefore were satisfied in relation to section106(1A)(a).

We next considered the co-location and programme sharing request in relation to Ofcom's policy criteria. This included, in particular, the policy criteria specific to requests to co-locate or share programmes with stations in a different Approved Area, as set out above.

In this respect, we took account of the significant financial difficulties the five stations involved in this request have been experiencing over the past few years. Until January 2017, the licences were owned by Anglian Radio Ltd, which had been operating at a significant financial loss. Celador’s contention, supported by confidential evidence submitted to Ofcom, is that substantial cost-saving measures are necessary for the licences to remain financially viable. Celador estimates that by implementing the proposed co-location and programming sharing arrangements, the stations could collectively achieve an operating profit by 2020.

We were also cognisant of the fact that, with the exception of Radio Norwich1, all the radio stations involved in this request have a Measured Coverage Area (‘MCA’) of fewer than 250,000 adults. The MCA of Town 102 is 154,993 adults. As set out above, we say in our policy guidance that there may be a stronger case for co- location and/or programme sharing between stations in different ‘Approved Areas’ where at least one of the stations has a licensed area with a population of fewer than 250,000 adults.

For these two policy reasons, we decided to agree to this aspect of Celador’s request.

Changes to local hours and local news provision

Second, we considered Celador’s request to reduce the hours of local output on weekdays (from ten to seven per day) but to simultaneously increase the local news requirement from peaktime to daytime. In relation to this aspect of Celador’s request, we were satisfied in relation to section 106(1A)(a) – that the departure would not substantially alter the character of the service – on the grounds that the increase in networked programming would be offset by the increase in provision of bespoke of local news content for the Ipswich area. We then decided to agree this aspect of the request because it is consistent with our policy on local news, as set out in our published localness guidelines2.

Summary

Ofcom decided to approve the various elements of the Format change request from Town 102 because in each case it was satisfied in relation to one of the relevant statutory criteria, and for the policy reasons outlined above.

June 2017

1 The MCA of the Norwich licence is 290,000 adults. 2 Available at https://www.ofcom.org.uk/tv-radio-and-on-demand/information-for-industry/radio- broadcasters/localness/localness-guidelines