Preamble
In 1922, the British government awarded a monopoly broadcasting licence to a single British Broadcasting Company, whose shares were owned by British and American electrical companies. Although in theory the BBC could have sold sponsored airtime, it attempted to gain its revenue by selling its own brand of licensed radio receivers manufactured by the member companies of the BBC. This arrangement lasted until 1927, when the broadcasting licence of the original BBC was allowed to expire. The assets of the former commercial company were then sold to a new non-commercial British Broadcasting Corporation, which operated under a UK charter from the Crown.
With no possibility of commercial broadcasting available from inside the UK, a former British Royal Air Force captain and entrepreneur (and from 1935 Conservative Party member of parliament) named Leonard F. Plugge set up his own International Broadcasting Company. The IBC began leasing time on transmitters in continental Europe and then reselling it as sponsored English-language programming aimed at audiences in Britain and Ireland. Because Plugge successfully demonstrated that State monopolies such as that of the BBC could be broken, other parties became attracted to the idea of creating a new commercial radio station specifically for this purpose.
Read more about this topic: Radio Luxembourg (English)
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