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If you have been holding your breath waiting for a clear picture to emerge in the post-Chris Tarrant London radio market, you will not have enjoyed last week's Rajar radio audience figures covering the second quarter of 2005. The outlook remains volatile.

Last year, the fate of Capital's new breakfast presenter, Johnny Vaughan, looked simple - either he would be instrumental in restoring 95.8 Capital FM to the position of dominance it had when Tarrant was the station's figurehead personality, or he'd be invited to ply his trade elsewhere.

Neither has happened. In the commercial arena, Capital has been caught, notably by Heart and Magic, but not surpassed. And the theory on Vaughan conveniently forgets that Capital actually lost its unquestioned supremacy during Tarrant's last months; and it also ignores that there is a hell of a lot more competition, both locally and nationally, compared with Tarrant's heyday in the 80s and 90s. Like ITV in the commercial TV market, 95.8 Capital FM may face inevitable audience erosion, whatever it does.

So Capital's bosses will have been cheered by aspects of the latest Rajar results. Although it lost audience in absolute terms, it still outperformed its commercial rivals to retake the top spot as the most listened-to commercial station in London. It's now nip and tuck, however, in a three-horse race between Capital, Heart and Magic. In fact, you could argue that the only clear winner recently in the London market has been the BBC.

1. In terms of total audience share and reach, there are three BBC stations that matter in the London market: the national stations Radios 4, 2 and 1. Then there are the three local commercial heavyweights: 95.8 Capital FM, the Chrysalis-owned Heart 106.2 and Emap's Magic 105.4.

2. As commercial media owners don't tend to compete for the older audiences attracted by Radios 4 and 2, when it comes to commercial impacts the battle for the younger audience demographics boils down to four players. In terms of London all-day reach, the pecking order in the latest Rajar figures is: Capital, Magic, Heart, Radio 1. Classic FM and Kiss 100 are snapping at Radio 1's heels.

3. In terms of London all-day commercial audience share, the figures for the top five are 95.8 Capital FM (11.6 per cent), Magic (9.7), Heart (9.5), Classic (8.6) and Kiss 100 (7.7). But Capital merely performed less badly than its two main rivals and its audience has fallen below two million for the first time since the 70s.

4. In the third quarter of 2003, Heart overtook Capital for the first time and predicted it would now forge ahead. It didn't and by the fourth quarter of 2004 it had fallen into third place, behind Capital, re-established as the top dog, and a new challenger, Magic. But, in the first quarter of 2005, Heart leapfrogged back to the top again, relegating Capital to second place. This volatility, agencies say, is due in part to the programming on offer. But station bosses also blame the Rajar measurement system.

5. Breakfast is the most intense battleground. As audience loyalty is often established during this slot, the station that outscores its competitors in this flagship battle will usually prevail in terms of total share over the day. Taking BBC Radio 4 and Radio 2 out of the equation, Capital has the greatest breakfast reach among London listeners: 1,077,000. Radio 1 is next (780,000) followed by Heart (720,000) and Magic (702,000).

6. With Chris Moyles having stabilised Radio 1's breakfast audience last year, the focus moved to the battle between the new boy Vaughan and Heart's Jono Coleman/Harriet Scott team. When Coleman's figures dipped in the fourth quarter of 2004, it was decided to bring in Jamie Theakston as a replacement. Yet Coleman turned in a good set of audience figures in the first quarter of 2005 before leaving. Chrysalis sources say that Theakston can't be judged on these latest figures - but that will undoubtedly be the main focus for scrutiny in the next set.

7. Breakfast continues to be the main battleground in terms of marketing and promotional activity. Vaughan's "maybe it's because I'm a Londoner" ad has aired in several bursts since he joined. Theakston has had similar backing recently, with Chrysalis spending £2 million on a campaign across TV and press.

WHAT IT MEANS FOR ...

GCAP

- Big corporations don't much care for volatility and unpredictability in their markets - and, of course, there is no bigger UK commercial radio broadcaster than GCap.

- GCap as a whole (including Classic FM) had a good showing on these Rajar figures, both nationally and in London. But GCap managers will want clearer indications that its flagship station is heading in the right direction.

CHRYSALIS

- Chrysalis is clearly disappointed the Jamie Theakston effect hasn't been more of a factor sooner. Chrysalis Radio's chief executive, Phil Riley, doesn't much care for volatile markets either and has taken to criticising the Rajar methodology.

ADVERTISERS

- Media agencies are telling their clients that London market volatility is not greatly worrying in the grander scheme of things.

- But Vizeum's head of radio, Tim McCabe, admits that some plans may be tweaked around the margins to fit the new pecking order. He states: "There are some stations here whose audience has seemingly shot up almost ten-fold. But that's happening from a small base. We tend to take a longer-term view."

- McCabe says that if a big station's audience changes by less than 10 per cent, it will not make much difference from the planning point of view. He says that numbers are important but that specific radio environments are used for very specific strategic reasons.