A Future for Community Radio in Australia

A Future for Community Radio in Australia:

Funding, licensing and legislative issues

Saba El-Ghul

Submitted in partial fulfillment of requirements for KK51 Master of Arts (Research)

Creative Industries Research and Applications Centre

Queensland University of Technology

2004

Keywords

Community, radio, funding, licensing, sponsorship, philanthropy, marketing, legislative issues.

1

Abstract

The community radio sector is an important cultural resource for the Australian community. It is experiencing rapid growth with an increase in the number of licensed radio stations, however, government funding has not proportionally increased and this is threatening the financial viability of many stations. The key issue addressed in this research is the need to find ways to enhance community radio’s sources of funding without imperilling its status as a not-for-profit sector.

This study argues that there is no inherent conflict between entrepreneurial principles and not-for-profit principles, and as long as all revenue is invested back into the station, then there should be no limit on income generation for community radio. Overseas community radio experience supports this argument.

2 Table of Contents

Chapter One – Introduction ...... 6 The Argument...... 6 A Short History of Community Radio...... 14 Funding: strategies and case Studies ...... 20

Chapter Two – International Models of Community Radio...... 26 Radio Popolare...... 31

Chapter Three – Pathway 1: Government Grants...... 35 3ZZZ...... 41

Chapter Four – Pathway 2: Sponsorship...... 48 Radio Metro...... 52

Chapter Five – Pathway 3: Subscription...... 61 PBS...... 62

Chapter Six – Pathway 4: Philanthropy...... 71 Jupiters Casino...... 75

Chapter Seven - Pathway 5: Marketing ...... 81 Life FM...... 88

Chapter Eight – Pathway 6: Training ...... 93 3CR ...... 100

Chapter Nine - Licensing ...... 102 SYN FM...... 105

Chapter Ten – Summary and Conclusion ...... 109

References...... 117

List of Interviews...... 121

3 Statement of Original Authorship

The work contained in this thesis has not been previously submitted for a degree or diploma at any other higher education institution. To the best of my knowledge and belief, the thesis contains no material previously published or written by another person except where due reference is made.

Signed: Date:

4 Acknowledgments

I would like to thank my supervisors Professor Stuart Cunningham for having faith in me and for guiding me through this thesis, and Dr Christina Spurgeon for giving me alternative solutions to obstacles that faced me on the way.

I would like to acknowledge staff and students at the Creative Industries Faculty at Queensland University of Technology for their constructive advice and support, in particular Dr Jo Tacchi for sharing her research outcomes. I would also like to acknowledge all interviewees who contributed to this research.

Many thanks go to Sam Bebawi, who is a Business Strategy Consultant, for sharing his expertise. Finally, I would like to thank my family for their support: my mother, brother and especially my father Dr Ali El-Ghul for providing his academic review.

5

Chapter One Introduction

“Community [Radio] is a not-for-profit organization and we do not deliver [profit] to shareholders, that is the major difference between commercial and community. We give our dividend back to the community in various different forms whereas commercial radio delivers dividends to shareholders or owners. Everybody has their particular role to play. The pure nature of the economy we sit in demands that we go in the direction of commercialisation.” Jim Seymour Life FM Station Manager

The Argument

It is not easy to predict a future for community radio in Australia, yet based on the difficulties the sector is currently experiencing, it is possible to acknowledge the threats that lie ahead for community radio and the need for new strategies to be adopted in order for community radio stations to survive and perhaps flourish.

The community radio sector as a whole is an important cultural resource for the

Australian community. It fulfils a broad but largely unacknowledged role in the

Australian mediascape, particularly as a source of local content. A current study, entitled Commitment Community: The Australian community radio sector by

Forde, Meadows and Foxwell, reveals that in the 1999/2000 financial year the sector reported a turnover of $50 million (Forde et al, 2002: 99). However the visibility of the sector to audiences is not high. In 1995, the Australian

Broadcasting Authority commissioned a report, Radio Research – Listening to the Listeners, that asked respondents if they had heard of community radio and if

6 they knew how to access it. Only 38% of the respondents were aware of the existence of community radio, while 83% and 88% of the population were aware of the existence of AM commercial and FM commercial stations respectively.

And yet the community radio sector is experiencing a time of rapid growth where the number of licensed stations has grown by more than 60% in the past five years (CBF Annual Report, 2002: 2). The current expansion rate for the sector is around 10% per year and it is estimated that there will be 300 licensed community stations by 2005 (Price-Davies and Tacchi, 2001: 16) from a current

276 permanently licensed radio stations (Our Stations, 18 Feb 2003). The process of licensing in Australia will be addressed in detail in Chapter Nine.

In recent years independent research by Roy Morgan Pty. Ltd. showed that the national community radio listener base had grown to almost 8% of the population over the age of 14. This is suggestive of a growing appreciation of the value of the diverse and specialised programming the sector provides (CB Online, 2 Oct

2002). However, a major issue affecting the sector is the decrease of government financial support through the Community Broadcasting Foundation

(CBF) for existing community radio stations. Core funding levels per station have declined by 36% over the past years as a direct result of increase in the number of licensed stations (Forde et al, 2002: 95). During the 2001/2002 financial year, the CBF made 479 grants to 193 stations, which added up to just over $5 million.

Funding is not difficult to obtain, but most CBF grants are relatively small and are devoted to specific purposes. According to the CBF’s estimates, government

7 funding currently represents less than 8% of the total revenue of the community broadcasting sector (John Martin, 10 Dec 2002). This small percentage of government funding is often distributed as seed funding, where grants are directed to newly licensed stations to assist them in the foundation stage. As more stations are licensed the amount of funding per station decreases. Chapter

Three will focus on government grants.

While community broadcasting participants generally welcome the sector’s growth and the availability of new licences, they have expressed concern over the lack of proportionate funding increase from the Federal government. The increase in newly licensed community radio stations has resulted in a decrease of government funding per station. The issue, then, to be dealt with in this study, is the absence of financial security for community radio.

This issue may be addressed through increased government funding to the sector, although this is not a likely scenario as the full cost of government support for the sector, such as direct grants and licence subsidy, is yet to be costed.

According to the Productivity Commission Broadcasting Inquiry Report, released in April 2000, there is a need for a detailed study into costs of the community sector in the future, in addition to the necessity of focusing on the social and economic effects (Productivity Commission, 2000: 276). The Commission states that “the major cost to the general community of community broadcasting is the opportunity cost of the spectrum they use. Community broadcasters receive ‘free’

8 access to scarce radiofrequency spectrum and thus exclude other potential broadcasters” (Productivity Commission, 2000: 275). Consequently, recommendation 6.7 of the report stipulates that “the value of broadcasting services bands spectrum reserved for non-commercial broadcasting services should be estimated and reported publicly” (Productivity Commission, 2000:

206).

In light of this recommendation, the sector is compelled to develop or explore alternative sources of funding as uncertain times lie ahead for community radio.

Some stations are already showing a tendency towards operating in a more entrepreneurial manner in order to obtain the necessary funds. This trend is causing some division within the sector. The future path of community radio is divided between those who support the move in the direction of commercialism and others who are firmly against it on the grounds that “stations cannot be seen to be too successful – to attract large levels of sponsorship would challenge that station’s ‘not for profit’ status, and negatively impact on commercial radio’s market share’’ (Forde et al, 2002: 96). This division was echoed in the interviews conducted for this research, where most respondents admit that there is a strong and contested, but necessary, push within the sector towards commercialisation.

The Australian Broadcasting Authority (ABA) has investigated community radio stations for breaching the sponsorship codes. Examples of these include the case of 6NR FM in Perth, which is licensed to Curtin University of Technology.

9 On 19 August 2000, the ABA determined that the station was in breach by broadcasting advertisements rather than sponsorships. The investigation concluded that during an interview on a home handyman program with a representative from Coates Hire, and on another occasion a promotional announcement by the Tasmanian Holiday Centre, material was broadcast that was not of a community information nature and did not acknowledge that the advertiser was a financial supporter for the station. This broadcast material took the format of an advertisement because a sponsorship tag was not attached to the announcement, and did not contain material that promotes the services provided under the licence (ABA Investigation Report 6NR, 20 Mar 2004). The regulations concerning sponsorship announcements under the Broadcasting

Services Act shall be outlined in Chapter Four. Other breaches occurred during the Vietnamese language program on 3WRB, which broadcast advertisements that were not tagged and therefore could not be regarded as sponsorship announcements (ABA Investigation Report 3WRB, 19 Mar 2004).

It is clear from these examples that there is some tension in the industry indicating the need to find a more practical approach to ensure that stations commit to a unified application of the code that addresses valid concerns regarding commercialisation in the sector. However this thesis focuses on finding strategies for community radio survival in a burgeoning media market, and therefore looks into diversifying income streams for community radio as a not-for- profit sector.

10

This study argues that the current funding arrangements for community radio in

Australia are barely sustainable. Therefore, the key issue addressed in this research is the need to find ways to enhance community radio’s sources of funding without imperilling its status as a not-for-profit sector.

With non-profit organisations, revenue is reinvested back into the organisation whereas with for-profit, revenue is distributed to the shareholders and this is what makes the operation commercial. This research suggests that as long as all revenue earned is invested back into the station, then there should be no government-imposed methods on income generation for community radio. This lifting of restrictions does not mean that community radio stations are operating in a commercial manner, but rather in an entrepreneurial manner. There is a fine distinction between the two categories of non-profit organisations: ‘welfare’ not- for-profit which are charity based organisations such as World Vision, and entrepreneurial not-for-profit such as community radio.

I argue that there is no inherent conflict between entrepreneurial principles and not-for-profit principles. However there are some obvious disruptive tensions within the sector that can be seen in some case studies handled in this thesis.

These tensions arise from differing interpretations of the mission and ethos of community radio. This tension could be treated by taking an entrepreneurial

11 open-minded approach to community radio operation that would ensure a positive direction towards financial success rather than operating within restrictions that would result in the station’s struggle to survive. Profit-making that is rendered towards the development of the station itself does not mean that community radio stations are becoming commercial. The ethos of community broadcasting lies in the heart of its mission which is to cater for its community by providing a service that goes back to the community.

This study suggests that the deregulation of sponsorship time presently limited to

5 minutes per hour for radio may enhance income generation for community radio. It will be argued that deregulation of sponsorship time is not a violation of the ethos of community radio nor would it contradict the mission of community radio. While this may conflict with current licensing regulations, I argue that regulations should be changed to ensure a secure future for community radio without jeopardising its ethos.

I argue that the differences between community and commercial radio are not limited to the differences in funding sources and profit objectives. A key difference is that commercial radio focuses on larger aggregate audiences and listener groups. The difference can manifest in varied programming formats, music selection and talk content. The role of community radio addresses community needs in ways that commercial radio does not intend to cater for, as each community radio station targets a specific segment of the population.

12 Failing to do so can lead to the decline of this community service for no obvious gain. If community radio was to benefit from the easing of restrictions on sponsorship limitations, its mission and not-for-profit status is unlikely to be harmed and the sector is more likely to enjoy financial success as a consequence.

Following are the main findings of the project that are connected to the future viability of community radio. The findings suggest the sector should:

ƒ Apply more entrepreneurial principles, in particular marketing principles;

ƒ Lobby for more favourable licensing requirements including the elimination of

sponsorship time limitations;

ƒ Promote sharing of resources among stations such as facilities, rentals and

airtime for those stations that share a geographical location;

ƒ Promote the use of barter payments;

ƒ Promote long-term philanthropic relationships between community radio

stations and donors.

13

A Short History of Community Radio

Broadcasting in Australia is organised as complementary sectors of public, commercial and most recently, community broadcasting. Community broadcasting is called the third tier of the country’s broadcast ecology. It was known as the public broadcasting sector until the Broadcasting Services Act,

1992, designated the Australian Broadcasting Corporation (ABC) and the Special

Broadcasting Service (SBS) as ‘public broadcasters’ (previously known as national broadcasters), and the not-for-profit non-government owned third sector as community broadcasting. This sector was established to address gaps in service, not addressed by the commercial sector or the government funded public sector, particularly in the areas of access and special interest programming.

The ABC has four national network radio stations (Radio National, Classic FM,

Triple J and News Radio which is only available in capital cities and Newcastle, or as streamed audio), an international network (Radio Australia), an Internet station (DiG Radio) and 46 local radio stations (Contact ABC Radio, 10 Oct

2002). SBS, the other government-funded multicultural and multilingual broadcasting service and which also includes a television service, broadcasts in

68 diverse languages on its national radio service and is networked nationally from Sydney and Melbourne (Language Groups, 6 Oct 2002). As for the

14 commercial radio sector, there are 241 commercial stations around Australia,

108 broadcasting on AM and 133 broadcasting on FM (Commercial Radio

Broadcasting Licences, 10 Oct 2002). In addition to these three main sectors, the industry includes subscription broadcasting, open narrowcasting and subscription narrowcasting.

The need for community radio in Australia arose in the 1960s. “Radio broadcasting had remained almost unchanged since before the War... While many people thought there was a need for reform, the only thing these people had in common was a belief that current broadcasting services were defective”

(Thornley, 2001: 3). Educational interests were prime movers towards community radio. Music Broadcasting Societies that had formed in Sydney and Melbourne were seeking permission to broadcast as independent FM services, and be funded by listener subscriptions. The lobby for the extension of radio services broadened out to include other specialist music, ethnic programming, and educational and political information.

The early 1970s saw a range of new radio services created and it was in the mid-

1970s that a third tier was finally created. According to the CBAA “[i]n 1972, and under a Liberal government, the Australian Broadcasting Control Board recommended… ‘a new type of service, comprising FM stations, to be known as

Public Broadcasting Stations which would be conducted on a non-profit basis to cater for the needs of educational, religious, professional, musical and other like

15 interests, but which would be available to the general public’” (CBAA Handbook,

History of Radio: 2).

There was pressure for change as a consequence of both this government inquiry and recommendation. According to the CBAA “[t]he pioneers of community broadcasting had three shared motivations and objectives: (1) to make broadcasting accessible to individuals and sections of the community seeking access, particularly those who did not obtain access to other media; (2) to expand meaningful programming choice to satisfy a wide diversity of needs and interests of listeners, whether numerous or not; and (3) to enable community organisations to own, operate and control their own independent broadcasting services, thereby diversifying control of the media” (CBAA Handbook, History of

Radio: 2). These objectives now constitute the mission of community radio.

The Public Broadcasting Association of Australia (PBAA), later to become the

Community Broadcasting Association of Australia (CBAA), was formed in mid-

1974 when the Whitlam government was going through procedures to legislate for public broadcasting. Signs of a government intention to develop the sector by prescription rather than in response to community demand, motivated key activists to establish the PBAA, a national public service broadcasting secretariat,

Which would “lobby for the establishment and development of public broadcasting...” (Thornley, 2000: 3).

16 In 1976 amendments to broadcasting legislation were introduced to parliament, partially to provide for public broadcasting. In early 1978 the amendments came into effect and a third distinct public radio sector came into existence alongside national and commercial sectors. By 1988, there were 79 public radio licences, with many of the new licensees representing regional and sub-metropolitan communities.

Within the public radio licence category there were three sub-categories. Stations were classed as either ‘Community’, ‘Educational’ or ‘Special Interest’ public broadcasters. ‘Community’ public stations had a charter to provide a community service, designed to serve a geographical area, and provide for the participation by a variety of community groups and interests in that area. ‘Educational’ licensees were usually affiliated with a university and carried a high proportion of educational content, and ‘Special Interest’ stations served a clearly defined interest group such as musical, sporting, ethnic and religious. In 1985, educational stations were brought under the umbrella of ‘Special Interest’, but all of these legislative sub-sectoral distinctions were eventually abandoned, although specialisation continues to be represented within the sector.

With the development of specialist community radio stations, came the development of national bodies to represent these specialist interests. These now include: Australian Christian Radio (ACR), National Ethnic and Multicultural

Broadcasters Council (NEMBC), National Indigenous Media Association of

17 Australia (NIMAA) and Radio for Print Handicapped Australia (RPHA). In 1984 the Community Broadcasting Foundation (CBF) was established to act as a funding agency for the development of community broadcasting in Australia. The role of the CBF will be dealt with in detail in Chapter Six which focuses on philanthropy.

In the early 1980s, in response to a call from stations wanting quality programming produced by other community stations, the National Program

Service was established by the PBAA to distribute taped program material via post. In 1993, with over 130 permanent licensees, the CBAA (as the PBAA had become by this time) took advantage of more affordable satellite technology and launched the Community Radio Satellite Service (ComRadSat). Today 140 community radio stations are linked to ComRadSat and can select programs from a 24-hour schedule for re-broadcast on the station (ComRadSat, 28 Nov

2002).

The year 1992 heralded a new era not just for Australia’s 130 public radio licensees but also for the entire media industry. The Broadcasting Services Act,

1992, provided for a new deregulated media environment. Three new licence categories were introduced: subscription broadcasting, open narrowcasting and subscription narrowcasting; the Australian Broadcasting Authority replaced the

Australian Broadcasting Tribunal; and the public broadcasting sector became the community broadcasting sector.

18

The old Act presumed spectrum was scarce. The new Act took a different approach to technical planning and allowed a more pro-active approach on the part of the regulator in identifying demand for community broadcasting licences.

The ABA allowed aspiring groups to test broadcast under the open narrowcasting licence category. In 1997, due to long delays in the licensing schedule for narrowcast category, the Act was amended to provide for Temporary Community

Broadcasting Licences (TCBLs). This amendment gave way to the administration of test broadcasts by aspirant community broadcasting groups. The issuing of over 200 Temporary Community Broadcasting Licences between 1997 and 2000 by the ABA is a strong sign of the demand for community broadcasting (CBAA

Handbook, History of Radio: 4).

In early 2003, there were 276 permanent licensed radio stations, in addition to

150 aspirant radio community broadcasters, with 81 holding Temporary

Community Broadcasting Licences. Out of the 276 permanently licensed radio stations, 94 were in NSW, 63 in Victoria, 45 in Queensland, 26 in Western

Australia, 25 in South Australia, 13 in Tasmania, 5 in the Northern Territory and 5 in the Australian Capital Territory (Our Stations, 18 Feb 2003). This distribution of community stations across Australia is indicative of the need for this broadcast service on a national scale.

19 Within the community radio sector, there are vast differences among stations in size, audience and location, particularly between metropolitan and regional stations. Some stations, such as 3RRR in Melbourne, operate in highly competitive metropolitan markets whilst other stations, such as Bordertown community station 5TCBFM, offer the only radio service in their region. More than 60% of community radio services are in regional areas (Forde et al, 2002: i).

This indicates that community radio is fulfilling a necessary role in the broadcast sector.

Mark Lyons states distinctive characteristics of third sector organisations to include: centrality of values, complexity of revenue generation, reliance on volunteers and difficulty in judging performance (Lyons, 2001: 22). These characteristics are especially evident in community radio in Australia.

Funding: strategies and case studies

Community radio in Australia has three main sources of income: government funding, sponsorship and subscription. The Community Broadcasting Association of Australia (CBAA) estimates that government funding makes up between 7-

10% of the sector’s total operating revenue, sponsorship makes up 46% of the sector’s income, whereas subscriptions make up around 20% (CBAA Handbook).

Although government funding makes up the lowest of the three main sources of overall income for community radio, the sector is highly reliant on this source for

20 seed funding. Additionally there are some stations for which the main source of recurrent income is government funding, as is the case with 3ZZZ, discussed in

Chapter Three.

Other methods of income generation that community radio utilises include fundraising events, promotions, philanthropic associations and audio production such as CD copies, recordings and audio copies.

For some stations, a main source of funding is the sale of airtime to local organisations, that wish to run their own programs on a permanent basis and for outside broadcasts. This provides assurance for stations that programs presented directly reflect community interest. Another popular source of income generation is radiothons. Making community radio stations visible through public events such as theatre and film opening nights as well as other cultural events has also proven to be an effective way of generating income, as this visibility increases listenership which in turn affects subscription and sponsorship.

Broadcast training often acts as source of income for some community radio stations. Training is an under-developed income stream that could potentially become a substantial source of funding for community radio in the future. This will be discussed in further detail in Chapter Eight.

21 This thesis will first describe overseas experiences of funding community radio, especially where there are not the same legislative restrictions on revenue sources as there are in Australia. A case study from Italy’s Radio Popolare serves as a model for the recommendations of this thesis. The main argument in this study, that a not-for-profit radio station can remain true to its ethos while raising funds through more sponsorship than currently allowed, is exemplified by the funding strategy of Radio Popolare.

Subsequently, six main pathways of funding for community radio in Australia will be investigated in six separate chapters with case studies representing each funding source, beginning with 3ZZZ Melbourne Ethnic Community Radio which relies on government grants. Stations like 3ZZZ which depend on government grants must start finding alternative sources of funding in order to sustain their operation in the future if government subsidies continue to decrease.

This study then investigates the case of Radio Metro on the Gold Coast, a newly licensed community radio station that relies on sponsorship. Radio Metro’s case highlights the difficulties in attracting sponsorship, such as the expense of providing independent survey data and marketing campaigns.

Chapter Five includes the third case study, Melbourne’s PBS, a station that relies on subscription. PBS is an example of a community radio station successfully

22 supported by a strong listener base. The potential to increase this listener base will be examined.

A fourth source of funding for community radio, largely untapped in Australia, can be found in philanthropic associations. Chapter Six examines the Community

Broadcasting Foundation (CBF), in addition to the philanthropic relationship between Jupiters Casino Community Benefit Fund and community radio.

Philanthropy is a source of income that needs to be further explored.

The role of marketing in enhancing funding sources for community radio, the application of marketing strategies for non-profit organisations and the limitations of marketing in community radio will be explored in Chapter Seven through a study of Life FM that broadcasts from the Gold Coast.

Chapter Eight will be looking into the possibility of adopting training as a substantial source of income, and taking 3CR in Melbourne as an example.

Finally, Chapter Nine will explain the licensing procedures in Australia, and then a study of a station in Melbourne, SYN FM that merged with another station in order to apply for a full time licence, will be used.

Cases in this thesis were chosen because of the high reliance of each station on the corresponding funding pathway investigated in each chapter. They function as concentrated models for each funding source. The particular cases used here

23 were selected because of their capacity to clearly illustrate specific financial issues that are less distinctive but nevertheless common to many other stations in the sector. The exclusion of other possible examples was a necessary limit to this study, for resource research reasons. Australian community radio stations discussed are situated in Melbourne and the Gold Coast, this is due to the fact that choices were restricted to stations that were physically accessible to me while also ensuring the geographic diversity of stations and the demographic diversity of their audiences is represented.

The case studies are based on a range of information sources, such as government reports, academic analysis, including interviews with key personnel.

The questions asked during interviews were related to general information about the stations, sources of funding, financial issues facing the stations and ideal solutions to these issues according to management. These aimed to gain a realistic and practical understanding of financial issues in the field, and were accordingly used in the thesis to reflect the problems, solutions and desires in the sector on a workable level. Organisations such as the CBF, CBAA and NEMBC were also interviewed for this research for the purpose of including the views of policy makers in the area, thus providing multiperspectival insights.

Forde, Meadows and Foxwell have produced an extensive analysis of the

Australian community radio sector in 2002 entitled Commitment Community: The

Australian community radio sector, which I have referenced at several points for

24 current data. However, in this study, I focus more on the necessity of adopting more entrepreneurial principles and unrestricted sponsorship time within the sector, than is noted in the Forde et al research.

This thesis works towards the conclusion that extra private funding and the non- profit community radio station ethos can exist side by side. The scope of the thesis does not suggest that unlimited sponsorship arrangements will not result in more commercially-oriented stations. It only makes the argument that the non- profit community ethos and mission mitigate against this by extra sponsorship that can enhance community broadcasting and this is deserving of serious consideration.

25 Chapter Two International Models of Community Radio

This chapter focuses on community radio outside Australia. This chapter argues that the elimination of restrictions on sponsorship is common and is being successfully applied using examples from South Africa, Holland, Ireland and

Canada. These models suggest that the policy framework within which community radio now operates in Australia is unnecessarily restrictive. The case of Radio Popolare in Italy is included towards the end of the chapter to illustrate how a non-profit radio station can operate with no restrictions on advertising.

In developing countries, community radio is seen as a powerful tool for conflict management and conflict resolution. It is seen as a potential agent for social change, and perceived as an engine for democratisation. It is also an important tool for development. With a high rate of illiteracy in many developing regions, radio is, in many cases, the only affordable medium reaching large numbers of the population. A distrust of government or state-owned public media in some countries has paved the way for a rising number of local community radio stations. In the West, community radio is often a small player in the wide media landscape, but it aims to fulfil the specific needs of certain community groups

(Community Radio, 15 Nov 2004).

26 Throughout the world, grassroots organisations have established their own means of communication where the necessary technical and/or financial means could be procured (World Broadcasting, 18 Aug 2002). Community radio can thus be seen as part of a broader struggle for access to communications media.

The idea of a right to communicate has gained support in the past 25 years and

“includes the principles of access, participation and self-management in communications” (Lewis, 1984: 17) it is based on a conception of media as instruments for social groups to reproduce and represent their cultural identity, to voice their social and economic demands and to create new social relations.

Canada has acknowledged the importance of community radio since the early

1970s and consequently has a well-developed model for community radio. There are currently around 65 licensed community radio stations in Canada.

Community stations are operated by non-profit organisations and rely heavily on volunteers for programming and other station operations. In the early years of community radio in Canada only restricted advertising was allowed. Today, the

Canadian Radio-television and Telecommunications Commission eliminates all restrictions on the amount of advertising broadcast by community stations, which are categorised as Type B stations. The Commission “continues to believe that if

Type B community stations are to fulfil their intended role and mandate, they must have adequate, more secure and consistent revenue streams to enable better planning. The Commission also believes that placing limits on advertising is not the most effective way to guarantee that community stations offer

27 programming that differs in style and substance from that provided by other types of stations. The Commission considers that simple and effective programming requirements will achieve this objective” (Community Radio Policy, 14 Jan 2003).

Reliable revenue streams are fundamental to the emergence of quality broadcasting, which would ultimately appeal to greater numbers of listeners which in turn increases subscription, sponsorship and other marketing opportunities.

Until relatively recently South Africa had a tightly controlled broadcasting environment that was monopolised by the state-controlled South African

Broadcasting Corporation (SABC). In 1988 the Film and Allied Workers

Organization (FAWO) was formed to focus on the question of how to rid the broadcasting environment of the effects of apartheid and to promote a progressive broadcasting culture to provide for a diversity of voices from a broad range of communities (Dowmunt, 1993: 90). Since the early 1990s, following the democratisation of the Republic of South Africa, the airwaves have been opened up. Community radio is rapidly being recognised as playing an important role in the development of civil society in South Africa by widely reaching the poor.

Despite all this, community radio is a struggling sector largely because of funding and skills shortages in many areas of the country. The amount of advertising and sponsorship that a station may take is unrestricted at present. There is an

Independent Communications Authority of South Africa (ICASA) requirement to make clear the distinction between advertising and sponsorship announcements,

28 and to ensure that sponsors of programs do not influence the content of those programs. Some stations are able to cover running costs through advertising and sponsorship revenue, but often need seed funding for training and equipment.

Some begin with start-up grants and then run with a mix of advertising revenue and donor support (Independent Communications Authority of South Africa

Broadcasting Act, 21 Jan 2003).

In Holland local broadcasting is part of the public broadcasting sector which although it is not regarded as non-profit because it is government-funded, it is in fact struggling. Up until 1983 local broadcasting was operating on an experimental basis where some stations were government-funded sporadically.

The Dutch Federation of Local Public (OLON) was formed from 15 of these local stations in 1981 to act as an official body for local broadcasting. OLON is funded through annual government grants from the national media budget, which makes up 50% of the organisation’s income. There were 336 licensed local stations in

1999, and despite being occasionally funded by OLON, these stations need to rely on other sources of income such as advertising, sponsorship, membership fees and donations. Advertising is allowed as long as it caps paid announcements at 12 minutes per hour (Price-Davies and Tacchi, 2001: 32-35).

In Ireland community radio was a product of a pilot project that was established by the Irish Radio and Television Commission (IRTC) in 1994. This resulted in the licensing of 11 stations that were originally only allowed to broadcast until the

29 end of 1996 but were then granted a one-year extension. The project lead to the conclusion by the IRTC that community radio is a vital sector of Irish broadcasting. Support for community radio was sought through membership fees, sale of services, collections, general fund-raising. The IRTC currently permits community radio stations to air sponsorship announcements, as long as sponsorship announcements do not go over 6 minutes per hour and amount to no more than 50% of the station’s income (Price-Davies and Tacchi, 2001: 38-

40).

In summation, these experiences of community radio overseas illustrate the prevalence of minimal funding restriction models. In the early years of community radio in Canada only ‘restricted’ advertising was allowed; today, however, community stations have limitless advertising time. In South Africa, the amount of advertising and sponsorship that a station may take is unrestricted. In Holland, advertising is permitted on the basis that it does not exceed 12 minutes per hour.

Finally, in Ireland, stations are allowed to broadcast advertisements and sponsorship announcements with restrictions on the total value of revenue from these sources.

In general, community broadcasting in the world continues to struggle with a range of obstacles imposed on it such as the scarcity of licence opportunities and the shortage of funds. However, developments in some areas of Europe have shown that different routes can be adopted to establishing a third sector between

30 the state-owned and the fully commercial. One of these examples is Radio

Popolare in Italy.

Radio Popolare

Radio Popolare began broadcasting in 1976 in Milan. During the 1980s the station moved away from its links to left organisations and trade unions to adopt a more independent stance. It was born from the convergence of interests between the broad and extreme left and the parliamentary left, in the autonomy of information (La Storia, 17 Jul 2002). It is now considered to be one of the most important independent sources of information in the country.

As a result of its commitment to the public interest, Radio Popolare functions as a community radio station despite operating on a commercial licence, as all profit made is returned to the station. Radio Popolare therefore acts as an example of how various financial practices a radio station undertakes do not necessarily compromise its not-for-profit objectives.

Radio Popolare started off as commercial radio. However, not wanting to rely on advertising alone, the station called on its audience to support Popolare by buying shares. Shares were issued to create a democratic structure in which the shareholders of Radio Popolare would have a say in the policy of the station

(Laureys, 28 Apr 2002). In 1980 the station needed 120 million lire a year, of

31 which about 50 million was raised by advertising, 22 million from individual subscriptions, 10 to 12 million from fundraising events, and 8 million from an annual lottery (Downing, 1984: 289).

Starting from the early 1990s, Radio Popolare became controlled by the cooperation of workers and collaborators. Around 12,000 shareholders own

40,000 stocks of the company. Other sources of income are generated through advertising and listener subscriptions. The statement of account of Radio

Popolare indicates that 13,000 subscribers each contribute around 80 US dollars a year, with 45,000 listeners each week (Radio Popolare, 16 Sep 2002). This is an indication of the importance of listener support as a fundamental source of income for the station.

Around 40 paid staff are employed at Radio Popolare and there are almost as many volunteers. Journalists constitute the majority of employees as news plays an important part of the station’s broadcasts, although music takes up around

60% of programming (Laureys, Radio Popolare Milan, 28 Apr 2002). Popolare broadcasts 24 hours a day (Marcello Lorrai, 5 May 2002).

Based on an interview conducted by Francois Laureys with the station director

Marcello Lorrai in January 1999, one of the most popular programs broadcast on

Popolare since 1976 is Microfono Aperto (Open Microphone), in which listeners

32 respond via talkback to specific themes related to the news, thus involving the community since 1976 at a time when talkback radio was not common.

In 1981 Radio Popolare established a network to exchange news programs with other radio stations elsewhere in Italy. This service started out with radio stations around Milan, and since 1995 the network has expanded via satellite to most of the major cities in north and central Italy. Currently 20 Italian radio stations make up the Popolare network, in Rome, Florence, Bologna, Venice, Verona, Torino and Bari. Stations from southern Italy were not included as there were fewer in quantity and most had extremely low budgets. However, Popolare aims to expand the network both geographically and in terms of input by raising the quantity and quality of regional news (Laureys, Radio Popolare Milan, 28 Apr

2002).

In conclusion, Radio Popolare is an example of entrepreneurial not-for-profit radio. This model is not present in Australia for the following reasons:

ƒ There is a limit on the amount of sponsorship permitted for community radio.

This minimises potential income generation that Radio Popolare operates as

a non-profit organisation suggests that advertising does not jeopardise the

mission of the station, while the income ensures that the service offered to its

community of listeners remains intact.

33 ƒ There are not enough substantial marketing strategies adopted to enhance

awareness of the existence of community radio in Australia, thus limiting the

number of subscribers. Popolare enjoys the support of 13,000 subscribers,

and there is no restriction preventing Australian community radio stations

from lifting their subscriber numbers to a similar level.

ƒ The increase in the number of community radio stations licensed in Australia

limits each station’s resources and listeners. The use of resources more

effectively for this purpose than at present between stations in Australia, like

that of the Popolare network, may expand community radio’s opportunities by

cutting cost on production and programming expenses.

Although Radio Popolare is a bigger station in comparison to Australian community radio stations in general, this overseas experience and others portrayed in this chapter, demonstrate that obstacles to a more entrepreneurial approach to community radio viability need to be questioned.

34

Chapter Three Pathway 1: Government Grants

This chapter will take a closer look at how Australia’s government grants are distributed to community radio and will identify the reasons why government funding to the sector is unlikely to be substantially increased. 3ZZZ, a community station that relies heavily on government grants, will be used as an example.

Government grants are distributed to community radio stations in Australia through the Community Broadcasting Foundation (CBF). The Community

Broadcasting Foundation Ltd was established in 1984 as an independent and non-profit funding body following widespread consultation with community broadcasters and the government. The primary aim of the organisation is to act as a funding agency for the development of community broadcasting in Australia.

The CBF receives an annual grant from the Department of Communications,

Information Technology and the Arts (DCITA), and a smaller grant from the

Aboriginal and Torres Strait Islander Commission. It is independent from the government and from the community broadcasting organisations that it funds. A study of CBF will be presented in further detail in Chapter Six.

35 The government determines the proportion of annual grants that should be allocated to general community broadcasting and to the different sub-sectors of community broadcasting according to social justice, access and equality criteria.

The CBF then assesses applications for funding and distributes grants for development, programming and infrastructure support using the following categories: Aboriginal community broadcasting, ethnic community broadcasting,

Radio for the Print Handicapped (RPH), general community broadcasting, the

Australian Ethnic Radio Training Project (AERTP) (which is now facing a shortage in funding) plus sector coordination and policy development.

The CBF solicits and administers other grants for special projects as the government introduces new policy initiatives. These grants include the

Contemporary Music Initiative for community broadcasting that is managed by the CBAA. In line with general grant distribution guidelines, special funds are divided between licensed stations, new licensees, program production, training and development and sector coordination.

President (1999-2003) of the CBAA, David Melzer, says that “it is important to note that community broadcasting is not government broadcasting, even though it provides valuable services. While community broadcasting cannot expect ongoing funding - only 10% of national annual revenue for the sector comes from the government and [it] is an important source of seeding funds” (David Melzer,

10 Dec 2002). The CBF makes sure that when a community radio station is

36 licensed, seed funding is made available immediately to get it started. “This would mean that as more and more stations are being established, some of the ongoing support has had to be decreased as more of the financing goes to seed funding” (John Martin, 10 Dec 2002). Yet most newly licensed community stations complain of the lack of government financial assistance, and this was evident in the case studies included in this research.

President of the CBF, John Martin, points out that government financial support for the sector has always been a small part of community radio’s income. He believes that due to the thin spread of financial support for community radio, there is pressure on the community broadcasting sector to find revenue elsewhere. Martin states that “the CBF believes that the sector is at a crossroads in its development. The contribution the sector currently makes, and the potential it has to broaden its value to Australian society, is threatened by a lack of adequate resources to meet the challenges of rapid expansion and balanced development. The Foundation will continue to press these arguments with the

Commonwealth Government and other potential funding sources” (CBF Annual

Report, 2000: 2).

This lobbying effort is ongoing. The CBF campaigned for more adequate funding during the 2001 election campaign. As a result a major new funding initiative was developed and proposed to government as it was preparing for the 2003/2004 budget, however this initiative has not yet been funded. The proposal includes “a

37 nationally accredited broadcast skills training program, a nationally accredited radio management training program, a regional and rural radio business incubator project, a community radio establishment, recapitalisation and training development fund, and a continuation of the Australian Radio Airplay Project and regional development of radio for print handicapped services” (John Martin, 10

Dec 2002).

Community radio stations also apply for additional grants from other government funded agencies. Larger stations have successfully applied for funding on a regular basis through various arts and music initiatives – usually associated with the cultural contribution made by the station. Community-based grant programs of local and state governments are also a regular target for community radio stations (Forde et al, 2002: 104).

In the study conducted by Forde, Meadows and Foxwell, the statistics in the sector reveal that:

In 1985, around $1.27m was provided by DCITA to 56 stations, representing a little more than $22,000 per station. This funding level increased until 1995, when it peaked at an average of about $25,000 per station. In 1996, core funding began to decrease as a result of the introduction of a new ‘targeted’ funding regime. Core or ‘guaranteed’ annual funding is now down to a level of just under $17,000 per station per year, well below the 1985 levels... If we take targeted funding into account – which is not guaranteed, and which has to be justified by the sector each three years – the figures are still low. Including targeted ($4.5m over three years) and core funding ($3.3m), the per station amount in 2000 was $24,600, lower than the per station figure for core funding in 1993-94 and in real terms lower than the 1985 figure of $22,000 per station (Forde et al, 2002: 93-94).

38 An analysis of government funding allocation to the CBF in the 1999/2000 and

2000/2001 financial years, reveals that this trend is continuing. Although there have been modest increases in government funding year to year, the average distribution back to stations has actually decreased, as rapid increase in the number of stations means government funds need to be spread further than ever before. In 1999/2000 $4.8 million was distributed to community radio in the form of government subsidies (Forde et al, 2002: 94).

The level of government funding provided to the CBF in 2000/2001 for disbursement to the community broadcasting sector amounted to $5.462m. In addition to $3.313 million for ongoing funding, $0.973 million was provided for the funding of special projects. These included ongoing development of the

Community Access Network (CAN) and Community Broadcasting Database

(CBD), support for Multicultural Community Broadcasting, support for the satellite network, the Australian Ethnic Radio Training Project (AERTP), the National

Transmission Network Grant (NTN), the Australian Music Radio Airplay Project

(AMRAP) and the Digital Delivery Network (DDN) (CBF Annual Report, 2000: 2).

Funding to permanently licensed stations from DCITA for the 2002/2003 financial year is around $5.28 million (Forde et al, 2002: 94). Core funding levels per station declined by 36% over the past years as a direct result of increase in the number of licensed stations by 60% (Forde et al, 2002: 95).

39 Many community stations do not receive any CBF assistance due to the difficulties they encounter in applying for grants. The CBF is criticised by applicants for its lengthy funding application process. One industry insider is reported to have said:

I don’t apply for any of the CBF grants because of a) the sort of paperwork they want to put me through. The time spent doing what they want me to do I can make twice as much money out of local sponsors. And b) I think they want me to compromise my radio station to the point that the value of what they give me is lessened by what I have to compromise on the program (Forde et al, 2002: 104).

However, the CBF says it is not to blame for the rigorous demands of funding applications:

To some extent it is a result of increasingly onerous obligations placed on the CBF by the government, requiring higher levels of accountability for disbursement of public monies. It is also partly a function of the highly targeted nature of most of the CBF's funding. At the same time, [the CBF] is keen to keep things as simple and clear as practicable, and is currently going through a major review of the forms and processes (John Martin, 10 Dec 2002).

Yet the belief persists within the sector that even if stations applied for government subsidies through the CBF, they would not be successful because the CBF already has the grants allocated before the stations apply for them

(Roger Jones, 17 June 2002). Some stations are concerned that when they appear to be successful in raising funds, they are also unofficially excluded from receiving government funds through the CBF. They feel the CBF prioritises those stations that are struggling to raise funds in other ways. The government is also being criticised from within the sector for its minor contribution to community radio. As one insider reported to other researchers in the field: “[the government]

40 gives millions to the ABC, they give a lot of money to commercial media in various ways and they give a teeny weeny little bit to community radio” (Forde et al, 2002: 95).

Major benefactors of CBF funding are stations offering ethnic programming, as they are perceived from within the sector to be receiving sufficient funds for their programs. The CBF has been praised for funding stations providing ethnic programming (Forde et al, 2002: 104). One of these stations is 3ZZZ Melbourne

Ethnic Community Radio, which is a good example of how government grants can make a difference to the financial status of a community station.

3ZZZ

As an ethnic community radio station, 3ZZZ services 58 ethnic communities with specialist programming. 3ZZZ started broadcasting on a regular basis in June

1989. Working from studios in the Melbourne suburb of Fitzroy, the station broadcasts 24 hours a day. It is estimated that more than 400,000 people listen to 3ZZZ every week (History, 7 Oct 2002).

The beginning of ethnic broadcasting in Australia goes back to 1973. The Ethnic communities began to work together with sections of the wider Australian community, and threw their considerable strength and influence into the

41 campaigns for access to the nation’s airwaves. The ABC had been encouraged by the Whitlam Labour government to open an ethnic ‘access’ station in

Melbourne in 1975, and opened 2JJ in Sydney as a sister station. The community access radio 3ZZ came into existence, owned and assisted by the

ABC, with 20 ethnic communities being the first to broadcast in their ethnic languages (Dugdale, 1979: 37). In 1977 the Fraser government closed down 3ZZ and eventually set up the Special Broadcasting Service (SBS) twelve years after

3ZZ’s closure. In August 1989 3ZZZ, a community offshoot of 3ZZ, obtained its licence.

Many other community stations now provide ethnic access programming.

According to the CBF “[t]here are 75 stations (35 metropolitan and 40 regional stations) in Australia that provide in excess of 1,200 hours per week of local programming in 86 languages. Over 2,500 volunteer broadcasters are involved in ethnic community radio in Australia” (CBF Annual Report, 2000: 2).

At 3ZZZ, up to 400 volunteers broadcast in 58 community languages. Some of these volunteer announcers have been with 3ZZ since its beginnings, hence representing the older generation. Some ethnic language groups have tried to accommodate a younger generation of broadcasters into their programs within their youth programming sections. Ethnic community stations are also providing an essential service to the new wave of migrants to Australia (Forde et al, 2002: ii).

42

The 16-member Council of the Ethnic Public Broadcasting Association of Victoria

(EPBAV) is the governing body of 3ZZZ. A minimum of 25 people from an ethnic community can form an ethnic community broadcasting group at 3ZZZ, but groups need to have at least 40 financial members to be eligible for an hour of airtime.

To comply with funding guidelines, ethnic programming must be mainly in a language other than English, contain no more than 50% music content, have a spoken word content of no more than 25% religious material or references, be locally produced under the auspices of a recognised local ethnic community language group and broadcast between 6am and midnight (Ethnic Grant

Funding, 6 Dec 2002).

There have been concerns from within the sector over the programming restrictions placed on these stations. As part of the study conducted by Forde et al, one ethnic broadcaster states that “once you start putting all [the] rules in place, you’re losing the way you intend to do your program”. Another broadcaster says: “if we go in excess of 50% foreign language nobody will listen …so every year or two we get a letter from Melbourne saying send us a tape of this program. We get deducted $1000 because they say we didn’t have enough

[language] in it” (Forde et al, 2002: 58).

43 The CBF offers the support of an hourly rate for ethnic funding. “The CBF has a total amount of money in each funding round which is divided by the number of hours of approved programs around Australia. In each round the hourly rate will vary. Since 1995 the rate has varied from $28.27 to a high of $51.82. As more eligible programs go to air the hourly rate tends to reduce” (Guidelines for Ethnic

Grants, 12 Apr 2004: 4).

This source of funding, paid for each hour of a language program, is extremely important and provides financial security for a station like 3ZZZ which schedules only ethnic programming. “In capital cities and specific stations which are licensed to do multicultural broadcasting, … there is substantial enough audience and it is justified there but …the more general community stations have gone for the ethnic funding because it is easier to get and yet there may or may not be that audience there to justify that” (Forde et al, 2002: 57).

For the financial year 2000/2001 and under the Ethnic Program Grant, 3ZZZ received $108,920 for Round 1, $111,833 for Round 2, and $220,753 for Round

3 (CBF Annual Report, 2000/2001: 11). Totalling $441,506 for the financial year, this was far greater than the average grant value for the same financial year which was by my calculations was $31,533.26.

In addition to the above grant and for the financial year 2000/2001, 3ZZZ also received other CBF grants which included the Multicultural Youth Program

44 Grants ($3,986), National Transmission Network Subsidy Grants (NTN) ($2,700),

Australian Ethnic Radio Training Project Grants (AERTP) ($12,700), and an ethnic music compilation CD under the AMRAP Distribution and Recording

Grants ($3,000) (CBF Annual Report 2000/2001). These grants totalled $22,386 bringing the total amount of grants received by 3ZZZ from the CBF for the financial year 2000/2001 for 3ZZZ to $463,892.

A closer look into 3ZZZ’s financial resources reveals that it has more than 5,000 financial members. Full membership is $15 and is $10 for concession. This amounts to a minimum annual income of $50,000 from membership.

Another source of funding for 3ZZZ has been its annual radiothon fundraising event. In 1999 3ZZZ raised just over $120,000 during Radiothon, and in 2000

3ZZZ raised $144,000 (El-Ghul, 2000: 34). Every language group that broadcasts on 3ZZZ is required to raise $1,000 per hour; if this is not achieved then language groups are in danger of losing their hour of programming. This amount has proved to be an easy target for language groups that enjoy the support of large communities in Melbourne, such as the Greek community.

However, there are tensions over the entrepreneurial capacity as of different ethnic groups relatively smaller and newer language groups, such as the

Hmongs, have not been successful in reaching this target and have been in danger of losing their broadcast time, as the size of their community could not support an entire hour of programming. This is a crucial issue, as it is the new

45 and small communities that are more in need of a broadcast program to keep them in touch with their homeland, Australian society and each other.

Sponsorship is another important source of income and has been relatively easier for 3ZZZ to accomplish than the average community radio station, because small businesses that cater for ethnic local communities find advertising on 3ZZZ an excellent way of reaching their communities. Ethnic broadcasting is the principle conduit for information to ethnic communities at a local level; this can be used as a means of developing solid sponsorship (Ian Stanistreet, 22 Jan

2003). Sponsorship has also been easier to achieve because the announcers themselves often act as sponsorship agents by bringing in sponsors from their communities to advertise on their programs.

Yet despite the financial comfort a station like 3ZZZ currently enjoys, it is at high financial risk in the future if government grants begin to dry up as it is highly reliant on government funding. Former 3ZZZ Sponsorship Manager (1992-2003),

Michael Smith, believes that if government funding were to decrease then the station would need to focus on increasing income generation from other areas such as sponsorship (Michael Smith, 11 Jun 2004). Should government funding continue to decrease in the future, community stations not reliant on government funding would find themselves at an advantage compared to those who depend heavily on government funding.

46 There are other threats that 3ZZZ faces such as competition from SBS and 24- hour commercial ethnic radio. There are two full-time Greek radio stations in

Melbourne, and several pay TV outlets. These commercial ethnic broadcasters concentrate on younger generations as opposed to 3ZZZ’s older audience. 3ZZZ is run by a majority of volunteer announcers who come from first and second- generation migrants. Unless 3ZZZ caters for the mainly English-speaking generation, the station is faced with a declining audience. The station will therefore have to accommodate programs that are more in line with the lives and aspirations of all generations, including some bilingual ones. The station will also have to involve more young people for it to maintain its existence in the future.

3ZZZ is an example of a community radio station that is highly reliant on government funding. Not all government-funded stations are able to secure as many grants as frequently as 3ZZZ does. However, should government funding for 3ZZZ decline, the station would find it harder to survive than other community broadcasters. This is because 3ZZZ has not built experience in seeking alternative funding sources.

47 Chapter Four Pathway 2: Sponsorship

In this chapter, the ways in which community radio in Australia views sponsorship will be briefly described, and the rules and regulations on sponsorship of community radio will be examined in detail. Radio Metro is included at the end of this chapter as an example of a community station that derives its main income from sponsorship, and illustrates the difficulties associated with attracting sponsors.

Sponsorship is a paid announcement that broadcasts a business name and service. The Broadcasting Services Act stipulates that a community radio station shall not broadcast advertisements. Therefore, the modifications that distinguish a sponsorship announcement from an advertisement are crucial to the differences between community and commercial broadcasting. The Broadcasting

Services Act, 1992, defines a sponsorship as “a sponsorship announcement that acknowledges financial support by a person of the licensee or of a program broadcast on the service provided under the licence, whether or not the announcement: (i) specifies the name and address of, and a description of the general nature of any business or undertaking carried on by the person; or (ii) promotes activities, events, products, services or programs of the person” (Part

1, Schedule 2).

48 According to the Broadcasting Services Act, 1992, a community broadcasting licensee may not broadcast a sponsorship announcement that contains:

a) “material that publicises programs to be broadcast by the licensee;

b) material that promotes the licensee’s products, services or activities for

the broadcast of which the licensee does not receive any consideration in

cash or in kind;

c) community information or community promotional material for the

broadcast of which the licensee does not receive any consideration in

cash or in kind;

d) sponsorship announcements consisting of moving text that is overlaid on a

test pattern” (Part 5, Schedule 2).

Generally, a sponsorship announcement is tagged and describes a business or service, but it cannot induce the listener to spend their money there. It also implies that a business must have something of real interest to the listener, or perceive a real benefit in associating its name with the community radio station.

The benefit of deriving funding from sponsorship is that community broadcasting maintains a non-commercial, independent status.

The Act allows stations to use persuasive language in sponsorship scripts (CBAA

Handbook, Sponsorship, 1). The Act also permits the broadcast of prices, bargain sales and special offers. However tobacco products and pharmaceuticals

49 are not allowed to be promoted on-air. Alcohol product promotion can be used in sponsorship announcements that promote alcohol products as long as alcohol abuse is not promoted. Medical services are also allowed to be promoted as long as specific requirements are followed in the sense that sponsorship announcements are true in all respects, do not contain any endorsement of skills and do not being disrepute on the profession (Australian Medical Association, 16

Sep 2002).

Community service announcements are defined in The Act as an announcement for which no payment is made, either in cash or in kind. Many stations offer free broadcast of community service announcements because the station wants to support the cause or initiative. If a station receives payment, in cash or in kind, from a non-profit or community-based organisation, the announcement must be handled as a sponsorship announcement. It should also be noted that a

‘community notice board’ segment, where individuals or organisations are required to pay for the broadcast of a message, is treated as a sponsorship announcement.

Community broadcasters are permitted to broadcast sponsorship announcements that run in total of not more than 5 minutes in any hour of broadcasting. The 5-minute time limit applies to any hour of broadcasting and includes all sound elements of the sponsorship, including the music bed. The time limit was amended from 4 minutes to 5 minutes in January 2000 following

50 representations to the Productivity Commission’s Broadcasting Inquiry. In May

1999, the CBAA made a submission to the Productivity Commission where it stated that “[i]n line with the decline in government funding across many community activities, rather than increase grant funds other than for specific tied projects the Government chose to signal its preference for the future by promising to raise the statutory limit for on-air sponsorship from four minutes in the hour to five” (Community Broadcasting Association of Australia, 1999: 10).

This recommendation was followed up with legislative amendments in the next year.

Community radio stations in Australia differ in their approach to sponsorship.

Some stations charge money for sale of airtime plus sponsorship and some stations do not charge anything for airtime. Hence, there is no unified approach to sponsorship in the sector. One third of community station managers have refused to air some sponsorship announcements because they disagreed with the content, while about one-fifth of station managers said they had refused sponsorship announcements because they disagreed with the organisation wanting to sponsor the station (Forde et al, 2002: 99). Radio Metro is a community radio station that has adopted an open door policy towards sponsors, and as a result has been faced with complaints from commercial stations. This is an example of how there is tension over entrepreneurial approaches for community radio.

51

Radio Metro

Radio Metro focuses on the selling of sponsorship announcements. It does not receive government funding. Radio Metro is situated on the Gold Coast and broadcasts from the heart of Surfers Paradise. It has been operating under a full- time licence since 2001. Prior to that, Radio Metro held a temporary licence for five years. Radio Metro is a youth community radio station that targets listeners ranging from 12 to 29 years old. This age bracket had not been previously targeted by radio services in the Gold Coast.

Radio Metro started broadcasting from a shed in Nerang as Hott FM. Hott FM first appeared on the airwaves in July 1995. Its Temporary Community Broadcast

Licence (TCBL) only allowed the station to operate for three months over one year, therefore for the first three years of activity the broadcasts went to air on weekends with a mono signal thereby spreading its licensed time. They began their programming by switching on at midnight Friday night and switching off midnight Sunday night, thus maintaining consistency in their broadcasts.

Hott FM then moved to a house occupied by an AM station which also played dance music. The complementary interests of the stations meant that this worked well as both stations worked on different bands. September 1997 brought a change in management and a move to Bundall, a suburb on the Gold Coast.

Another breakthrough occurred at the end of 1997 when the Australian

52 Broadcasting Authority granted Hott FM a full-time temporary broadcast permit for a period of six months. The station was monitored for that period and their licence was accordingly subject to renewal.

Sponsorship from local businesses provided the funds for the expansion Radio

Metro was undergoing. The local business community was rallying around Hott

FM as it was an opportunity for them to also be exposed. For example local record retailers contacted the station, offering a foot in the door with the latest music. This is a fine example of how “[I]n line with the sector’s commitment to local businesses, more than 80 percent of sponsorship across the sector comes from organisations in the licensed or local area... This is a fair indication of the productive reciprocal relationship that exists between local businesses, organisations and local radio” (Forde et al, 2002: 100).

Hott FM later moved to Cavill Mall in Surfers Paradise, and was granted a full- time permanent licence at this time and also became Radio Metro. This name change was necessary as Hott FM was already being used by another station in

Australia at the time. The station has recently moved to new premises on a 5- year lease. New studios were built on these premises by volunteers.

Radio Metro has seven full-time paid staff and 42 volunteers working at the station, with an average age of 21 years. Radio Metro considers itself a stepping- stone for anyone who has aspirations in media, in particular those who would

53 want to work in commercial radio. The station trains the volunteers and ultimately assists them in applying for jobs in the commercial sector. This, in itself, has been a growing phenomenon.

Radio Metro is in need of capital expenditure to fulfil needed projects in the future. The next project is a technical requirement that is a licence condition: the station needs to address is the issue of its six-year-old transmitter which has had no maintenance or rest and is starting to deteriorate. The station is currently in the process of raising funds for a new transmitter, which costs in excess of

$100,000. As a condition of its permanent licence, Radio Metro is required by the

ABA to increase its signal to a certain level after a year. The management is currently requesting an extension from the ABA to give the station more time to raise funds for maintenance work on the station’s transmitter which is necessary in order to meet this licence condition.

The station makes sure it uses up the full 5-minute sponsorship time per hour.

This is achieved by filling up the 5 minutes with ‘bonus spots’, which is sponsorship airtime that has not been sold and that is, as a result, given to the best sponsorship customers. This keeps the clients happy and is a good way of ensuring business. Ideally, the station would want to sell the whole five minutes of sponsorship time.

54 Sponsorship is sold in $69 packages. For this sponsors get two sponsorship announcements per day for a week as well as bonus spots depending on the bookings. The only condition that accompanies this package is that the sponsor must sign up for a minimum of three months. This deal is mainly aimed at smaller local businesses that do not have the commercial budget needed for advertising.

According to station management, the 5-minute sponsorship time bracket is a matter of familiarisation for the listener, as the listener is acquainted with only hearing 5 minutes of sponsorship an hour. Management believes that if the listener were given more sponsorship time to listen to per hour, then the listener would become used to it. On the other hand, for the station, the 5-minute sponsorship limit attracts sponsors because the sponsor has less competition with others. In spite of this, if Radio Metro had the option of increasing sponsorship time it would adopt it because of expenses it continuously faces.

Radio Metro’s management believes that advertising agencies are another good channel for improving the station’s financial situation by selling time through agencies. However, advertisement agencies tend to avoid radio stations that do not appear on surveys indicating high ratings. This is a common issue across the sector as many community radio stations have been unable to be declared in AC

Nielsen audience surveys because they cannot afford the annual survey fee of

55 $70,000 (Forde et al, 2002: 98). Commercial stations, on the other hand, always participate in independent ratings.

Radio Metro had previously had audience research done by Griffith University marketing students. The results were highly favourable to Radio Metro and, upon a request by Radio Metro, the marketing lecturers involved (and by default

Griffith University) agreed to endorse the survey results. The Griffith University students’ sample of 2,000 people found that 33% of Radio Metro listeners were from the 18 – 25 year old age bracket.

However, when Radio Metro attempted to use the survey as a sales tool, it claims that pressure was applied by a commercial radio station on the two Griffith

University marketing lecturers, and as a result the lecturers withdrew their endorsement of the survey. Radio Metro was left with the numbers but without a credible source. The following year Radio Metro approached Bond University, and while the lecturers there were happy to oversee a survey, they were not willing to endorse findings due to their knowledge of Griffith University’s earlier experience with Radio Metro.

Radio Metro’s experience with surveys suggests a number of things: first, the problems of getting endorsed, independent audience research done for the sector; second, the hostility of the commercial sector to community stations that are popular and effectively competing for audiences; and finally, that without

56 authoritative independent audience research, sponsors have little choice but to rely upon a station’s own claims about audiences.

Because the majority of Radio Metro’s listeners are young, the station does not ask them to be paying subscribers but rather to be identified as supporters. This allows the station to maintain a database which is mainly used as a tool to reach listeners and promote the station. Only a minority of supporters are paying members. Radio Metro claims to have 7,000 supporters on its database. During the period Radio Metro was lobbying for its full-time licence, thousands of supporters sent in letters of support. This ultimately assisted the station in achieving its licence. There are three types of membership at Radio Metro: Free

Subscribers, mainly comprised of young listeners, who when they fill a form of consent allows the station to send them information thus giving exposure to the station; Full Members who pay $50 annually; and the third category is for

Business Members who pay $250.

Based on the fact that the majority of subscribers fall under the Free Subscriber category, the station does not generate significant revenue from subscription.

Radio Metro’s station manager also believes that subscribers do not gain a lot of benefit in return for their money; therefore the station does not focus on subscription as a main source of funding. The subscription database is maintained principally for promotional purposes.

57 Radio Metro does not conduct radiothons either, as the management is worried that the disruption to programming would affect subscription and the results would not be fruitful. The station manager did not have much confidence in the young listener base giving donations, and did not want to face a radiothon with disappointing results. The possibility that Radio Metro does not have a loyal listener base, due to its reliance on a changing audience consisting mainly of tourists, could also be a reason.

It is worth noting other forms of income generation that have proven successful for Radio Metro. The station conducts live broadcasts from nightclubs at the Gold

Coast, which it considers a lucrative market. The station has been able to tap the under-eighteens market by organising dance parties called Freevolicious twice a year in school holidays, and channelling a share of the door takings back into the station. This has also proven to be a successful method of marketing for the station, especially at a time when school students undertake their end of year pilgrimage to the Gold Coast – schoolies week.

The station’s internet website has been under development for many months.

However, due to lack of sufficient funds the station has put the project on hold.

While the station approached four website designers, the cost was too high to appoint any of them. This is a common obstacle facing many community radio stations in Australia, as internet exposure is necessary to improving financial status.

58

The station has a good relationship with specific record companies who send

Radio Metro music within its format. Radio Metro’s music manager researches what is played on other stations, what is in the charts and what is played in the

US and Europe. He then talks to the record companies and makes his recommendations. The record companies often provide promotional copies usually around three months ahead of commercial release. For Radio Metro this is a guarantee that they play the latest hits before any other station does, and in return the record company expands the promotion of its new music.

Radio Metro is starting to investigate new sources of funding. However, its preoccupation with licensing, sorting out the premises and setting up the station, has not allowed for this.

Radio Metro would ultimately like to attain a philanthropic association with a corporation as such a relationship could give the station the financial security it needs. There have been cases where other community radio stations on the

Gold Coast have successfully formed an alliance with a corporation which has resulted in the purchase of new studios and equipment. This alliance was achieved by Radio Hope Island during its association with the Commonwealth

Bank of Australia (Jon Gardner, 16 Oct 2002). Radio Hope Island is a community radio station on the Gold Coast which targets retirees. Philanthropy for community radio will be addressed in Chapter Six.

59

Although Radio Metro caters for the youth market, the station has no aspirations to obtain a commercial licence. As a commercial-sounding, non-commercial radio station, Radio Metro poses an evident threat to commercial stations as illustrated by the interference that Radio Metro experienced when it tried to compile a survey. This, in turn, becomes a threat to Radio Metro.

A couple of magazines have approached Radio Metro to do ‘contra’ deals where a magazine promotes the station in its edition and in turn the station offers the magazine a sponsorship spot. This process does not involve actual cash exchange, and the only cost to the station is airtime. Another successful deal that has been achieved is the exhibition of station promotions on taxi tops around the

Gold Coast.

While Radio Metro consistently forecasts its needs and its costs, there is never any guarantee that its goals will be achieved due to the difficulty of generating a secure income in a competitive marketplace. Radio Metro relies heavily on sponsorship. Despite possible listener dissatisfaction Radio Metro would still opt for increases in allowed sponsorship time over other possible solutions to secure its financial viability.

60 Chapter Five Pathway 3: Subscription

This chapter focuses on how the sector is dealing with subscription, where listeners pay an annual membership fee in support of the station. PBS FM is the case study tackled in this chapter, as it is a strong example of a community radio station successfully supported by a strong listener base. The potential to increase this base by making more people aware of the existence of the station will also be explored.

For community radio stations with a loyal listenership base of a significant size, subscription can be a substantial source of funding. Through annual subscription or membership fees, listeners can support a station that provides them with innovative programming. This leads not only to the station ensuring the continuity of its broadcasting through listener support, but also to the station regularly receiving a mandate for its programming that is arguably stronger than a radio ratings survey because it indicates active listening.

Roughly half of community radio stations in Australia have the support of 400 subscribers or less, while the rest have around 400-4,000 subscribers. A small number of stations have more than 4,000 subscribers, on the other hand 15% of the stations do not run a subscription system at all (Forde et al, 2002: 102).

61 As mentioned in Chapter Two, Radio Popolare’s reliance on a noticeable listenership base was one of the main factors behind the station’s success. Yet as previously established at the start of this thesis, only a small percentage of listeners in Australia are aware of community radio. There is, therefore, a need to expand the listenership base for community radio stations in Australia, as illustrated in the case study of PBS.

PBS FM

PBS FM is one of the community stations that relies on a strong subscription base as a main source of funding. PBS FM is the Progressive Broadcasting

Service that was set up in Melbourne in 1979 as Victoria’s only radio station licensed by the Government specifically to broadcast specialist music. This comprises all music other than classical music. PBS’s licence is held by the

Progressive Broadcasting Service Co-operative Ltd. The station has an independently surveyed cumulative weekly audience of more than 330,000 people. The annual turnover for PBS is around half a million dollars a year, with

$200,000 raised from sponsorship. Although PBS is eligible for government funding through the CBF, the station receives no government aid. PBS finds it difficult to obtain government money because according to station management the applications are complicated to complete.

62 PBS started operating from a garden shed in Carlton. In August 1978, PBS was successful in its application for a full-time permanent broadcasting licence, after which it set up in the Prince of Wales Hotel in Fitzroy Street in St Kilda. After a couple of years the station relocated to the Ritz Mansions for 15 years until it once again relocated to Collingwood where it is now situated. By late 1987, PBS was broadcasting 24 hours a day across greater Melbourne.

PBS differentiates itself by adopting a programming cycle that depends on seeking out new forms of music that do not have a wide appeal, such as new forms of electronic music or industrial music. The music is then played on shows that start out as experimental and later become well established with large followings. When these new forms of music evolve and become mainstream,

PBS moves on to other forms of music. This gives PBS an original sound with something new to offer all the time.

However, in the early 1980s PBS was in serious financial trouble and was a week away from declaring bankruptcy and closing down. Emergency board meetings were held to decide whether they should wind up the organisation.

Broadcasters went on air and told their listeners that the station was in financial trouble, and likely to close down. As a result, PBS raised $40,000 in three days.

PBS would not have been able to achieve this had the station not had a large listening audience, and has systematically relied upon its audience as its principle source of financial support ever since.

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PBS currently has six full-time paid staff members. There are plans to further reduce this number by replacing them with part-timers and casual workers. This is a consequence of the financial changes that the station is going through, such as cost of labour and the rise in superannuation payments. The reason behind the need for full-time staff is the need to deal with the bulk of subscribers and sponsors, especially in a metropolitan station. Yet according to station manager, in the face of economic strife PBS could survive with three full-time staff, if necessary.

Announcers at PBS work on a voluntary basis. In order for them to become PBS announcers, they have to submit a demonstration tape sampling the type of show that they would like to present. This can be recorded at PBS’s studios. They are chosen based on the suitability of their proposed show within PBS’s programming, the announcer’s delivery and sound, and the availability of the material in order to guarantee the continuity of the program. Due to the scarcity of financial resources and the particular programming policy of PBS, the station does not maintain an extensive audio library, but relies upon individual program producers to source music.

PBS has a volunteer board that the station manager reports to. The board is comprised of a secretary who is a lawyer, a treasurer who is an accountant, and a chairperson with a business background. The station manager also has a

64 business background. It is critical to the operation of PBS that the board possess a relative degree of expertise and business knowledge.

In 2002, a strategic planning meeting with the board was held. Future planning had not been discussed for 10 years. PBS now has a 5-year detailed budget examining capital expenditure, marketing directions and the need to expand the station. PBS has a Program Planning group that meets with the board twice a year. This is a strategic group focussed on programming directions, emerging forms of music in the market and PBS music selections.

Due to the fact that PBS receives no federal or state support, funding must be solicited from the public. The two main sources are subscriptions and sponsorship. PBS has around 4,500 subscribers. The subscription fee is $66 per year and $33 as concession. Around 60% of PBS’s income comes from subscribers, which in turn covers salaries for full-time staff. However, management believes that if government subsidies could cover the salaries, it would give the station more financial flexibility.

PBS has loyal subscribers who are also active listeners. In its surveys of people who attend band performances PBS found that 50% of the respondents were subscribers and the rest were listeners. This reveals a high turn up of subscribers. The marketing of a performance associated with a certain form of

65 music is channelled through the relevant music show in order to reach a specific audience.

According to the station manager, Roger Jones, community stations do a lot of guesswork related to subscriber preferences and needs. Unlike commercial stations where the advertiser is the key driver, for community stations, it is largely the subscriber who matters.

PBS’s own assessment is that 4,500 subscribers are not enough. The bulk of subscribers come from the centre of Melbourne and the bay area. PBS has only

23 subscribers in the whole of greater Dandenong. Given the fact that 900,000 people live in that area, this is a small number proportionately. The station manager believes the reason for this is poor promotion for the station, and argues that it is not good enough for a radio station these days to remain passive about its number of subscribers. According to PBS management, 4,500 subscribers might be adequate today, but will not be in two years' time, and other sources of income must be sought as a result. Alternatively better marketing strategies would need to be adopted to increase the listener base by promoting the station more effectively.

PBS also raises funds through the placement of sponsors’ messages on air. A significant proportion of announcements are music related. This adds up to 70% of PBS clients being music venues, touring agents and record labels. So it is the

66 music industry that PBS is pushing and this suits its listeners. The programming, styles and types of music played on PBS are crucial to the station’s income.

PBS could certainly pursue larger sums of money by taking on bigger companies for sponsorship, but the station’s management believes this would seriously affect the number of listeners and subscribers, as they would deem the station as selling itself and losing its independence. For example, PBS had an opportunity to cooperate with a beer company, Tooheys, as a sponsor. Yet Tooheys owns

40% of the music venues in Melbourne and what the station manager liked about this particular sponsor was that Tooheys deliberately ban pokies at all venues they own. The station manager’s view was that a Tooheys sponsorship announcement did not involve talking up its product or encouraging alcohol consumption. The announcement would merely state its support. However, listeners and board members were uncomfortable with this opportunity, as it was perceived that the station would be making potential compromises so PBS decided not to go ahead with the deal.

In terms of sponsorship, there are ongoing tensions between PBS management and the Board about what is acceptable to the Board and what is not, and continuous management efforts to try to push the boundaries. This tension is not just about station viability. It is also about listener control of the station, which means ensuring that the bulk of income comes from subscription rather than sponsorship.

67

PBS station management believes that they are underachieving in sponsorship and subscription. A lot of time is spent chasing small deals for sponsors, which could be better spent on bigger deals. Yet it is part of their duty to service the small sponsors too, and to encourage and support independent music. PBS also makes deals with small artists who cannot afford to pay huge amounts for CD recordings. PBS arranges for the sponsorship gig and recording at a pub venue.

PBS takes a percentage of door fees, and the pub makes its profit from the bar.

PBS would usually offer artists 10 sponsorship spots on air plus back announcements from presenters, and sometimes have give-aways on air. This leads to the event being talked up among listeners, which ultimately leads to a high turn up on the night. So for the artist, it is worth getting support through sponsorship with PBS or any other community station.

Station management would ideally like to adopt $40,000 sponsorship contracts, because not only would this strategy bring large sums of money for the station but it would also give PBS the opportunity to reduce the number of sponsorship announcements that it broadcasts. The station produces a substantial amount of little packages to make money. This means that it is crowding its one-hour shows with a maximum amount of allowable sponsorship time of 5 minutes per hour.

However, PBS self-imposes a limit of 4 minutes per hour, due to the amount of listeners who ring up and complain.

68 There are other self-imposed rules regarding sponsorship announcements, which aim to protect the sound of the station. According to Roger Jones, PBS is not prepared to sell itself to any sponsor despite its financial needs. As an example, when PBS was looking for a gospel show to include in its programming, an announcer who represented a single gospel label made what was deemed to be a very good submission. This proposal was rejected in spite of the station’s expressed need for a gospel music presenter at the time. PBS could not take the risk of being accused of promoting one music label ahead of others through any implication that only one source of music was being used, and that only the music from the presenter’s label was to be played.

Other sources of income include benefits, donations and running training courses which together represent 10-15% of PBS’s annual income. PBS also organises music workshops for specific instrument players. These workshops serve to pick up potential members by exposing their music. It is crucial for the music industry in Melbourne that PBS fills the role of nursing the under-represented end of the music market.

There are several non-cash benefits that can be of assistance to community radio in Australia. If community radio were to receive technical assistance from appropriate persons, organisations or corporations, then this would free the station to dedicate funds to more specific areas such as expanding and enlarging its listening base. When PBS recently relocated from St Kilda to Collingwood,

69 they built a new five-studio station with volunteer labour, costing just over

$60,000. With these new studios PBS have the capability to focus on production, thus granting them the opportunity to grow in many different directions.

To conclude, the primary task of PBS is to broadcast what it deems to be avant- garde music, yet according to PBS there are many people in Melbourne who have not heard of PBS and who, if given the opportunity, could become regular listeners and in turn subscribers. So a main focus for the next couple of years for

PBS could be to adopt a marketing approach, which will be addressed in Chapter

Seven, to attract a larger listener base.

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Chapter Six Pathway 4: Philanthropy

Philanthropy and community radio have a lot in common, as they are both connected in their mission. Philanthropy involves active community capital building and community radio is dedicated to offering media services to the community. Common objectives can lay a solid foundation for a pro-active financial relationship. This chapter goes into the nature of philanthropy as a potential source of income. This chapter includes the different forms of philanthropy with an example of Jupiters Casino’s association with community radio.

Generally, corporations become involved in philanthropy for a variety of reasons.

These include building or reinforcing corporate and brand awareness, reinforcing or changing the corporation’s image, positioning a brand in a new market, targeting specific market audiences, building sales and distribution opportunities and supporting advertising campaigns. Major corporate donors who already possess a high profile in the community use philanthropy as a means of perpetuating and reinforcing their corporate objectives and preventing their competitors from gaining at their expense. As corporations are concerned with their longer-term objectives, campaigns usually need to be constantly emphasised to have any long lasting effects. Research, however, shows that

71 consumer awareness of a corporation can fall dramatically once the campaign ends or if it is only continued spasmodically. Therefore, it is possible that a long- term philanthropic relationship will be beneficial to both parties (Macdonald,

1995: 25).

The Australian Directory of Philanthropy contains over 400 trusts and granting bodies (Links, 27 Sep 2002), many of which are appropriate bodies for community radio stations to approach. There are five broad types of foundation - these types are mostly but not mutually exclusive. In other words, a foundation may fall into more than one category (Philanthropy Australia, 2001: 5):

ƒ Private - endowed by private individuals or families;

ƒ Business sponsored - similar to above but established by businesses;

ƒ Operating foundations - running their own programs but may also make

grants to others;

ƒ Community foundations - receive funds and endowments from a variety of

sources; and

ƒ Government sponsored or initiated foundation – the Community Broadcasting

Foundation (CBF) might fall under this category as a philanthropic

organisation that receives its funding for grants from the government, and will

be addressed later in the chapter.

72 The increasing number and variety of media outlets offering advertising opportunities in addition to the amount of advertising they broadcast, can make it difficult for corporations to get their message across. The cost of advertising can also be prohibitive and so it is natural for corporations to look at other avenues.

Philanthropic relationships are therefore an attractive and cost effective method for achieving this aim. The listenership of each community radio station could be an audience that a company is targeting and which could only otherwise be reached by an expensive advertising campaign.

Philanthropic foundations and trusts are a fundraising option for community broadcasters. Grant disbursement organisations have different guidelines for assessing who will be funded. Many trusts will direct their funds to specific target groups, such as women, the aged, youth or the unemployed. Some will fund specific functions where a need can be demonstrated. Others will have geographic limitations to the organisations they will fund.

The term ‘charitable foundation' is used internationally to refer to organisations whose primary purpose is to make grants to other organisations for charitable purposes. Such a foundation is usually defined as “a non-governmental, non- profit organisation with its own funds (usually from a single source, either an individual, a family or a corporation) and program managed by its own trustees and directors, established to maintain or aid educational, social, charitable, religious or other activities serving the common welfare, primarily by making

73 grants to other non-profit organisations” (Renz, 1991: 111). Most foundations have built an asset base, invested to produce an income where all or some of which is distributed in grants.

Estimates of the number and resources of foundations in Australia vary widely. In the early 1990s the Industry Commission estimated that trusts and foundations contributed $122 million to the total income of voluntary organisations estimated at $840 million. The other sources for the $840 million were: $260 million donated in bequests and $470 million from businesses (Industry Commission,

1995: 25).

The CBF has not taken on the task of seeking funds from other sources such as corporations. It does not regard itself as a philanthropic organisation trying to source philanthropic funding at its present phase of development; it is simply a gatekeeper of government funding. Director of the CBF states that the foundation is not planning philanthropic assistance for the sector at this stage. He says that a natural process exists for an organisation like the CBF. The process starts off with the organisation as a funding agency, then takes on a broader role by looking into areas of development, and then is taken further into philanthropy.

The CBF is still at the funding agency end of the spectrum (Ian Stanistreet, 22

Jan 2003).

74 The CBF, however, also faces many challenges in its role within the community broadcasting sector. The CBF constantly faces tension in deciding whether to spend allocated money on securing additional funds or to distribute it to the sector, as every dollar spent and operated in the foundation is a dollar that is not made available for distribution. The foundation also tries to balance funding to all interest groups and ensure that all funding received reaches the appropriate levels of support, as the sector is not monolithic. The CBF tries to balance a consensus with various sub-sectors that make up the sector and consequently achieve a common course of action.

Jupiters Casino

Many large corporations have specialised departments to handle grant allocation.

Their role is to examine proposals, manage them and ensure the company is getting value for money. Jupiters Casino Community Benefit Fund (JCCBF), which has previously funded Bundy FM Community Radio and Noosa District

Community Radio, also conducts its grant processing through a separate department.

For the financial year 2000/2001, JCCBF supported 246 projects with grants totalling almost $5.5 million. These projects are aimed at benefiting the community through a variety of community non-profit organisations. The grant funds have been used to purchase facilities, equipment, premises and vehicles;

75 fund the cost of running limited time community training and education programs; and fund the appointment of staff and associated costs to conduct pilot programs

(Jupiters Casino Annual Report, 2000:3).

The JCCBF was created by an act of Parliament under the Casino Control Act

1982. “To date $36.8 million has been allocated through 1,537 grants in normal funding rounds. The smallest grant has been $300 and the largest single grant

$200,000” (Jupiters Casino Annual Report, 2000: 3). Grants are allocated quarterly, with Trustees recommending suitable applications in line with the

Trust’s aims and objectives. Distribution of funds is monitored by local authority area with the percentage of grants allocated against the area’s population as a percentage of that of the Fund’s jurisdiction. Variables such as smaller populations in rural and western Queensland are taken into consideration.

Bundy FM, in Bundaberg, was successful in its application for a grant to purchase broadcasting equipment. JCCBF supported Bundy FM with providing a transmitter link for a total of $6,700. This grant was part of the August 2000 round. JCCBF also granted Noosa District FM, in Tewantin, an amount of $9,363 for outside broadcasting equipment for the November 2000 round (Jupiters

Casino Annual Report, 2000: 15).

Although not all stations feel comfortable about benefiting from gambling, this is an excellent source of income for community radio despite it not being a frequent

76 procedure. Long-term philanthropic relationships would be of more benefit for community radio stations in Australia, as this would provide more security for the daily operation of a radio station. However, one-off grants come as a solution to certain expenses community radio encounters, such as the purchasing of equipment. A station like Radio Metro could save its licence by improving its transmitter signal if it were successful in obtaining such a grant.

A successful example of philanthropic associations overseas is the Soros

Foundation Open Society for South Africa (OSF–SA) support to community radio in South Africa. OSF–SA aims at promoting open society values across many areas that include media; and has provided studio and transmission equipment to seven radio stations. This assistance has enabled these stations to operate upon being granted licences. This program joined forces with the Open Society

Initiative for Southern Africa and the World Association for Community

Broadcasters to develop and deliver workshops on community radio development and planning. Countries such as Ghana, Mozambique, Namibia,

Senegal, Sierra Leone, Togo, Zambia and Zimbabwe attended these workshops.

OSF–SA has also been supportive of the National Community Radio Forum

(NCRF), which was created to lobby for the diversification of the airwaves in

South Africa (NCRF, 15 Nov 2004), in order to get policy makers to accelerate licensing procedures, in addition to the drafting of a legislation to secure an agency responsible for government funding promotion (Open Society Foundation for South Africa, 2 Dec 2002).

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The ongoing corporatisation of government services has affected community stations’ relationship with these bodies that is occurring in many countries including Australia. In the 1970s and 80s community broadcasting often depended on the principle of cooperative effort. For example, the local council would provide premises at low rent; locally based Telecom technicians would lend a hand constructing a transmitter; the Broadcasting Tribunal’s State

Engineer would offer help and advice without charge; or the Department of

Communications would permit access to government owned transmitter sites at very low cost (Thompson, 1997: 17).

The traditional sources of assistance mentioned above have been on the wane for some years. Practically all help from public institutions is now offered on a cost-recovery basis only. Similarly the universities which operated community radio stations in the past have either cut the stations loose to find their own way or have reduced subsidies and required them to seek other sources of income, as is the case with 2NCR Lismore which started out as part of Northern Rivers

CAE and was cut loose by Southern Cross University in 2002. Some stations continue to receive subsidised rental in local council owned premises, but new ones starting up have found such arrangements more difficult to secure. Today, not only do community radio stations no longer receive assistance and low rates, but they also face additional expenses in the future as a result of public policy

78 shifts in the management of transmission sites and infrastructure, and radio frequency spectrum.

An example of such future expenses is the Mount Dandenong tower, used as a broadcast transmitter by community radio stations in metropolitan Melbourne. It is now owned by Broadcast Australia. Previously called National Transmissions

Limited (NTL), Broadcast Australia is a telecommunications company that provides transmission services to ITV channels and radio stations in the UK. NTL bought transmitter sites in over 200 locations from the Australian government for

$980 million Australian dollars (Radio Bulletin Board, 5 Jan 2003) on condition that for 10 years NTL would freeze transmission rents for community radio stations. Community radio stations each currently pay Broadcast Australia

$16,000 a year in transmission site rental fees. With seven years left until the end of the provision, according to Roger Jones, the rent on today’s scale will rise from

$16,000 to $100,000 a year (Roger Jones, 17 Jun 2002). This will be unaffordable to community radio stations and they will undoubtedly fight to get that rent down to a more reasonable figure. Yet even if the rent only doubles to

$32,000, community radio stations will still need to develop plans to cope with this increase.

Community broadcasting organisations are aware of such future challenges, and the funding strategy group at the CBF is trying to broker a common sector position on the escalating costs of transmission site access. The CBAA is

79 currently undertaking a survey of all costs connected to transmitters in order to get a hand on the national perspective of transmission site costs, to work out appropriate arguments (Ian Stanistreet, 22 Jan 2003).

Prime Minister John Howard has been emphasising the need for a policy of social coalition with shared responsibility between government, business, families, individuals and the philanthropic sector (Philanthropy Australia, 2001:

9), yet community radio has not been successful in obtaining funds through philanthropy on a large scale. The examples presented in this chapter portray the ability of community radio to secure funds for specific needs; yet these funds cannot sustain a long-term radio operation. Therefore, philanthropic relations must be further enhanced between corporations and community radio. However, philanthropy will always remain complementary to main sources of funding.

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Chapter Seven Pathway 5: Marketing

There are many ways that marketing strategies could enhance community radio funding opportunities. Marketing can assist in raising awareness of the existence of certain community stations, finding new and alternative ways of income generation and attracting more sponsors. This chapter will attempt to highlight certain marketing strategies for non-profit organisations that could be more widely used by community radio stations in Australia. The chapter will also look into the weaknesses and limitations of marketing in the community broadcasting sector.

Third sector organisations tend to be socially responsive and service oriented.

They specialise in the delivery of social services that are not adequately provided by either a business or government. This is the essence of the role of community radio. Generally within the non-profit sector there is some antipathy towards marketing. Marketing has the image of being a tool of the commercial world. It is strongly identified with selling and profit and therefore inappropriate for the non- profit sector (Macdonald, 1995: 1).

The American economist Burton Weisbrod notes that not-for-profit organisations are funded by people who want more of a particular product or a different feature,

81 and are prepared to pay for it. However because of the ‘public’ characteristic of the good, a not-for-profit organisation will emerge to supply it (Weisbrod, 1997). It is these consumers with particular needs who pay for the good by making donations to the non-profits that supply it. The good can be consumed by themselves and others for free or at a price that is affordable to all. Their support for the not-for-profit organisation thus involves an element of altruism (Lyons,

2001: 199). This is the basis of community radio, as community radio provides a specialised service for a certain audience that commercial radio does not typically target and does not aim to satisfy.

Economic theory tends to construct non-profits as being in other regards similar to for-profit firms. Therefore, business techniques designed to improve the performance of for-profits are deemed to be largely applicable to non-profits, though some variations may be needed. This is where the need for community radio to derive business techniques from corporate marketing strategies can be useful; it is also essential for third sector organisations that have marketplace problems. Their administrators are struggling to keep them alive in the face of rapidly changing societal needs, increasing public and private competition, changing client attitudes and diminishing financial resources.

In the late sixties, marketing professionals stressed the need for not-for-profit organisations to engage in marketing-like activities. Having established the applicability of business techniques for not-for-profit firms, marketing is one of

82 these techniques that can be exploited to address funding issues for radio stations. Various studies have been conducted on the marketing of non-profit organisations, and the belief that third sector administrators must begin to think like marketers is growing. Clearly marketing is not just a for-profit function, but a valid function for non-profit organisations as well. That is to say that all organisations have marketing problems and all need to understand marketing.

According to Kotler, despite the growing interest in marketing, many non-profit organisations still resist it. Many groups within these organisations see marketing as a threat to their autonomy or power. Eventually, marketing ideas will filter into these organisations. “Marketing will initially be viewed as advertising and promotion rather than as a revolutionary new way to view the institution and its purposes. A few institutions will lead the others in developing an advanced understanding of marketing … marketing will be a major and accepted function within the non-profit sector” (Kotler, 1987: 18).

Still, some non-profit organisations adopt a no-sell style, in which clients are not sought out. Instead, if they are lucky, they are permitted to find out about the organisation and what it offers. The organisation that adopts this style simply handles whatever clients come its way. This would be an ideal situation for community radio, as the two case studies previously examined illustrate. PBS and Radio Metro would both ideally want to be more exposed to listeners and believe that higher level of income generation would consequently be achieved.

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Community broadcasters around Australia have been conducting marketing in an ad hoc way. Their methods would include fundraising events, radiothons or a raffle. The issue for community broadcasters is how to approach marketing in an organised effective manner. Therefore the reason the station exists must be clarified before any marketing program may be implemented (CBAA Handbook,

Marketing, 1).

In a paper commissioned by the CBAA, marketing consultant Celia Donovan, found unanimous support for a professional, well-coordinated national campaign for marketing community radio. Some responses from within the sector where there were collective motivating factors can be summarised as:

ƒ frustration at invisibility of sector and desire to raise community awareness;

ƒ wish to dispel negative image and reinforce credibility;

ƒ pride in achievements and desire for recognition;

ƒ need to improve own sponsorship and fundraising activities;

ƒ increase competition (Marketing Campaign in Community Broadcasting, 19

Feb 2003).

For community radio, the audience is the main character identifier for the station.

It is the audience who serves as the reason behind community radio’s existence and accordingly, it is they who will help it to maintain its growth. Marketing aims to influence mass behaviour. However, Rados argues that mass behaviour is

84 variable and constantly changes (Rados, 1981: 47). Therefore, non-profit organisations will often be unable to use standard measures of performance.

They are prone to sanctify policies that have worked well in the past.

In general, non-profit marketers are challenged with problems that commercial marketers would usually tend to avoid due to the fact that they can go through other channels. In addition, non-profit organisations often market services for which there is little demand. Businesses avoid this problem by estimating the size of a market before they introduce a service. If there is no market, the idea is abandoned. With non-profit organisations this is not the case as they are mission-based.

Over the years reasonably substantial resources have been put into developing generic marketing strategies for community radio but, beyond the level of individual stations, they have generally not been sustainable or they have failed – for reasons that are worth considering, such as the diversity of the sector rendering coordination at metropolitan, state and national levels very difficult.

However, there are exceptions, as in the case of South Australian stations.

These stations form the South Australian Community Broadcasters Association

(SACBA) and have a common marketing strategy that extends to sponsorship sales. The marketing arm of SACBA, the Active Radio Network (ARN), sells sponsorship to SA community stations, generating income for stations. It acts as a one-stop shop for major advertising agencies and media buyers in government,

85 in addition to large and small businesses. A market research strategy was adopted as one of a number of key decisions of the 2002 SACBA Conference.

These decisions focused on the need for stations to combine in order to fund a survey of SA community broadcasters (SACBA Conference 2002, 27 Dec 2002), as community radio stations are often made invisible by not appearing in the regular surveys of commercial stations as previously mentioned. The CBF has occasionally funded marketing arms such as the South Australian Broadcasting

Association’s ARN.

The CBF has conducted its own radio surveys through an arrangement with the

CBAA and with the assistance of a national research firm. Findings were made available to radio stations over a period of time. The Director of the CBF believes that:

Survey research is an extremely expensive method of assessment and not all stations agree that it is essential for their own marketing. Given that a substantial proportion of stations exist in very small communities, even the most competent national researching firms cannot presently accurately assess them. The studies that were undertaken through the CBF provided a good interim authority and tool that was accurate for larger stations in major metropolitan areas and significant regional cities, where information was provided about individual station audiences. Research is necessary to distinguish the different nature of the audiences that community broadcasting attracts (Ian Stanistreet, 22 Jan 2003).

The sector has had previous experience in national marketing schemes, some of which have been successful while others have not. It is well recognised that the sector has difficulty in dealing with the way in which the major advertising

86 markets work with radio as a medium. Community radio is not well known to advertising agencies and there is limited success in approaching those markets through intermediary organisations. Research plays a key role in ensuring that each station has access to large advertising agencies, and that the sector as a whole is understood by those media buyers.

In rural regions it is extremely difficult for small stations to have any realistic contact with metropolitan-based advertising agencies. A focus on government policy towards the placement of government advertising, which forms a significant proportion of the total advertising budget, could be beneficial.

However, the government advertising target limit is questionable and the CBF could therefore play a more active role in ensuring that this target is achieved

(Ian Stanistreet, 22 Jan 2003).

What makes marketing difficult for community broadcasters is that their programming formats are often complex in comparison to commercial radio, as the demographics are more diverse. Existing community radio marketing programs are also limited in that they are not likely to reach an effective proportion of their target audience. This was the case with Radio Metro where the station was aimed at the youth market, yet found difficulty in reaching the majority of their target audience because the station had limitations in marketing itself.

87 There is this general conception that many insiders working in non-profit organisations refuse to consider marketing, which in turn places limitations on marketing opportunities. For many community radio professionals marketing is unethical.

Finally, marketing is often costly. It does not always require large amounts of money, but when it does, the costs in trial and error go up, as it is largely an experimental process. Market research can play a role in audience and sponsor awareness, in addition to new income generation opportunities, however it does not substitute for the development of other strategies that need to be considered for the sector. Life FM is one of the community radio stations constantly confronted with the need for capital when embarking on new marketing ideas.

However, its association with a development marketing company called Yo2Go has enhanced its sponsorship potential.

Life FM

Life FM is a community radio station broadcasting from the Gold Coast. It generates its income from the selling of sponsorship announcements through

Yo2Go, which is a business development marketing company. Life FM is an example of a station which believes that marketing is important for the survival of the station and is actively exploring this channel. Life FM is a Christian-based

88 station and was part of Rhema FM, originally a New Zealand network. Radio

Rhema community radio stations around Australia eventually formed a group,

United Christian Broadcasters (UCB), to be their governing body and that remains the case.

The station manager says: “the first question that comes our way is what is the demographic and how many listeners do we have. We cannot afford to do a substantial survey to find out exactly. Most of our sponsors are through Yo2Go”

(Jim Seymour, 4 Dec 2002). Yo2Go was established by a former salesman at

Life FM who decided to form his own company. He maintained his relationship with Life FM by purchasing airtime wholesale and selling it at a retail price recommended by Life FM. Without a substantial budget, Life FM’s station manager cannot employ a sales team. Any recruitment of a sales team would have to be based on a commission agreement.

The station’s manager would ideally like to see the 5-minute sponsorship time limit waived or at least increased to 8 minutes, thus reflecting a similar operation to that of the overseas experiences highlighted in Chapter Two:

If the government would allow us to do what we do in a more commercial sense we could survive very well. For example, we are technically a community; we do not have to announce that we are community. Commercials do not announce that they are commercial. There is no dilemma between sponsorship as opposed to advertising. The restriction on the amount of sponsorship should be waived. There should be an element of protection for community stations or at least the government should state the parameters

89 community groups are entitled to operate in. Commercial [radio] would object saying that we paid a lot of money for our licence and community got it for nothing, however they are entitled to deliver profits, community [radio] isn’t. Their focus is a money-generated focus. There are maybe a lot of very capable and sincere people operating within those organisations who want to deliver something of quality back to the community, however the reason [commercial radio] exists is to generate dollars, we exist to pay our bill but not to generate dollars. We are not-for-profit, and our focus is to give back into the community as much as we can for their benefit. That is where our dividends go, so it is a completely different focus. Once the two focuses are established, both should be able to get on with life and do what they have to do, and if this means that they have to compete with each other for that market, so be it! Commercial operators chose to get into their commercial environment and they should realise that commercial parameters change daily, and we have to live with that (Jim Seymour, 4 Dec 2002).

The station manager believes that if faced with an increase in sponsorship time, he would enter into a commercial decision regarding the limit listeners would accept, just like commercial radio does. Hence a comfortable balance would be sought.

A former businessman, Life FM’s Station manager believes less sponsorship time means applying more government funding which means more external control:

If Government wanted to reduce the amount of commercial activity, they need to take on a role to ensure that the regulations they put in place are met by funding. Personally I would not want to go that way because that means control of the sector and that would be the worse thing for community radio (Jim Seymour, 4 Dec 2002).

However, as stated at the start of the thesis, there is a split in the sector regarding the commercialisation of community radio. The President of the CBAA

90 voices strong opposition to Jim Seymour’s opinion: “commercialisation - or at least, the potential influence of commercial interests - is a threat to the sector. I do not want to see commercial restrictions waived. But I would like to see bi- partisan support to the sector in its objective of developing whole-of-community support and operating in a business-like way” (David Melzer, 10 Dec 2002).

What is meant here by “business-like”, Melzer explains, is management practices that are fundamental to any service that deals with the public. He states that in broad terms, the business fundamentals include:

ƒ A focus on the quality of the service, by ensuring that training and

programming allow the best possible schedule to be broadcast;

ƒ Adequate and appropriate marketing; there are many low and no cost

marketing activities that are crucial and are ignored by

many stations providing relevant training for volunteers and staff; again,

people need the skills to be able to do an adequate job.

ƒ Diversifying revenue sources; many stations expect their community to value

them simply because they have a licence. All a licence does is provide them

with the means to provide (a range of) services that are valued.

ƒ Developing a co-operative work environment; this takes work and if

successful is reflected on-air and in the community.

91 ƒ Ensuring volunteer and employee rights are respected; this also takes effort

to achieve but reduces staff turnover, improves on-air sound developing

productive and strategic partnerships.

This is an example of this split in the sector. Despite this split, there is a dire need for more entrepreneurial approaches to be adopted. There are gaps in the community broadcasting research literature that experienced business consultants and marketers could fill by conducting studies on business development to outline these entrepreneurial approaches.

In summary, marketing is a topic of growing interest to non-profit organisations as these organisations confront new and complex marketplace problems.

Therefore, introducing new marketing strategies to non-profit organisations should become an integral element for the survival of community radio stations.

92 Chapter Eight Pathway 6: Training

Training could become a potential source of income for community radio, as training is perhaps the most fundamental activity undertaken by community radio stations. As mentioned in the fourth chapter, Radio Metro has become a stepping-stone for future commercial broadcasters to train and gain on-air experience. This example is not the only case in the sector of community radio stations acting as a training ground for other media organisations. This function of the sector has been formalised with community radio organisations gaining

Registered Training Organisation (RTO) status.

There is a concern among training coordinators and practitioners, however, about the extent of government funding remaining for training courses. The

Australian Ethnic Radio Training Program (AERTP) is an example of a project that is undergoing its final government funding stages and must now seek alternative sources to continue the delivery of training. One suggested source is the possibility of user-pays, where trainees pay a fee in return for the training.

However it is also debatable to what extent this could become a source of income for the sector as fee-for-service training courses are usually run on a cost-recovery basis. While this could assist a station’s cash flow it is questionable that this income line could support other activities as well.

93 This chapter will look further into training as a possible stream of income generation by giving an overview of the current training environment and the associated financial difficulties. Finally, an example of a funded training project held at 3CR will be given to outline the case for funded non-fee paying courses.

There are many forms of training that take place within the sector. There are community radio stations that conduct one-to-one informal training where an experienced broadcaster trains a new volunteer. Other stations conduct partnership training in association with universities, TAFE or schools. There is also specialised training that takes place during industry conferences such the

CBAA annual conference. “Virtually all community radio stations (98.7 percent) undertake some form of training whether formal (29.5 percent), informal (53 percent), or a combination of both (82.6 percent). In addition, a small proportion of stations extend training to include the broader community (16.1 percent)”

(Forde et al, 2002: 61).

The Culture Research Education and Training Enterprise Australia (CREATE) is the national training body responsible for the development of accredited radio training programs that can be used “as a guide to designing courses or training activities for different occupational outcomes” (CREATE Australia, 25 Feb 2004).

The community radio sector is using CREATE’s Film Television Radio and

Multimedia industry training package (Case Studies, 23 Jun 2004). Other

94 accredited training projects currently operating in the sector, according to the

CBAA, include:

ƒ Australian Ethnic Radio Training Project (AERTP), which is mainly for

ethnic broadcasters but also delivered to other community stations. The

curriculum is available for all stations to use whether they run accredited

training courses or not.

ƒ The Australian Film, Television and Radio School (AFTRS), which

provides professional training to all industry sectors. It also includes a

fulltime Commercial Radio Broadcasters Course that is sponsored by the

Federation of Australian Radio Broadcasters (FARB).

ƒ Universities, TAFE colleges and schools, which often offer training

courses in association with a community radio station.

ƒ CBAA National Conference, where education is available for industry

broadcasters on latest developments such as digital broadcasting.

ƒ State and Regional Seminars, where associations have provided training

on issues such as media law.

Only 25 percent of community radio stations currently offer accredited training courses in Australia (CBAA Handbook, Training, 3). As mentioned previously, there has been an effort by the CBF to develop a training program in conjunction with the major sector representative organisations, in the proposal to the Federal government as part of the CBF’s preparation for the 2003/2004 budget. “The

95 proposal has a number of elements, with training being at its core: a national accredited broadcast skills training program; a national accredited radio management training program and a regional and rural radio business incubator project; a community radio establishment, recapitalisation and training development fund” (John Martin, 10 Dec 2003).

Around 18 percent of community radio stations receive some training funds from sources such as government training initiatives and educational institutions, however the majority of stations find the need to subsidise the cost of training with a course fee. This course fee could range from $30 to over $200 (CBAA

Handbook, Training, 2). Some community stations require that trainees become station members to qualify for training. So “[w]hile three quarters (75.7 percent) of stations do not charge a fee for such courses, most (58.1 percent) require trainees to be paid-up station members” (Forde et al, 2002:68).

To estimate a potential income stream from training for community radio, it is necessary to develop an understanding of what a training course entails.

Substantial human and station resources are needed to ensure the flow of a successful training course. “The issues that arise in setting course fees include; cost of providing the course, ability of community members to pay the fee, the value of skills returned to the station, concession rates, quality of the course, the need for more broadcasters... “ (CBAA Handbook, Training, 2). These resources include the proper selection, training and recruitment of trainers that have

96 significant broadcast experience. Only 5 percent of community stations employ external trainers, and around 25 percent of community radio trainers are paid

(CBAA Handbook, Training, 1). These trainers often also coordinate the training.

Under the AERTP project, it costs around $1400 to train and certify a trainer with a Certificate IV in Workplace Training in order to have an accredited trainer.

However in ad hoc training, trainers are encouraged to attend a Train the Trainer course due to the vital impact a trainer has on the station’s training results. Other requirements for a training course include certification, studio use, and portable recording equipment.

The case studies done for this thesis provide give an idea of the forms of training used in Australian community stations. For example, Radio Metro runs a radio school with in-house training. The training is a free five-week course that covers equipment familiarisation, voice projection, microphone techniques and scriptwriting. The course also offers an introductory hour on community radio. At the end of the course the trainees sit an exam to ensure discipline in attendance because the numbers are limited per course. Running the training course are four instructors, three of whom are volunteers and the fourth an experienced broadcaster from the ABC (Jon Gardner, 16 Oct 2002). The radio station develops the curriculum and training manual used. This is a free course, as most of the trainers are volunteers and the main costs of training usually go to trainers.

97 Training courses run at PBS are in-house, and prospective announcers must complete the PBS Announcer’s Course. This is a five-week evening course and costs $198, with discounts available for low income earners.

Training is provided for all 3ZZZ presenters for free. The Australian Ethnic Radio

Training Program (AERTP) is funded by the federal government in three grant rounds per year, thus enabling 3ZZZ to run three courses annually with a minimum of twelve students per course. There are two levels for every round: (1)

Certificate II, a beginners’ course includes various broadcasting skills such as studio use and recording, interviewing for radio, broadcast law and editing; and

(2) Certificate III, which is an advanced course teaching techniques such as program research skills, news and current affairs, bilingual broadcasting and talkback (Training modules, 24 Oct 2002). The training is supervised through the

National Ethnic and Multicultural Broadcasters’ Council (NEMBC) and falls under the training coordination of the Community Broadcasting Association of Australia

(CBAA). The instructors are trained and certified by the CBAA and are paid from the AERTP grant that 3ZZZ receives. Therefore, the AERTP course is a well developed, nationally recognised and government funded broadcast training system.

However the AERTP’s future is uncertain as government funding for the project is drying up. According to Forde et al, the CBAA proposed in 2001 “refinancing the established and successful Australian Ethnic Training Project (AERTP) at

98 around $250,000 per year” (Forde et al, 2002: 77). Since then the CBAA has endorsed a new national registered training programme based on the AERTP, which any station can use by signing a memorandum of understanding. Linda

Marson, who worked with the CBAA as a consultant and facilitator on the project, states that a number of courses have been conducted since the establishment of this training programme. The course provides basic training with learner resources that cost the station $30 as a complete package, and which almost every community radio station now has. The station can charge participants any fee, although stations tend not to do that for ideological reasons (Linda Marson, 5

May 2004). But Marson believes that if participants “pay for the course, they can value it – actually they might even turn up. The stations can charge whatever they think the market can bear – stations pay a small fee, as the CBAA acts as an umbrella of RTOs” ( Linda Marson, 5 May 2004).

Community radio stations will not only be acting as RTOs, but would also be able to act as assessing bodies. Through the CBAA, recognition of prior training can be considered whereby those seeking qualifications to match their skills can pay and sit an assessment test. This project is an opportunity for community radio stations to obtain funds that can cover training expenses, and perhaps develop into additional income. However, there are certain situations that could prove difficult in determining a fee in return for training, as in the case of migrant and emerging communities, and in this case stations would need to seek government funding.

99 3CR

3CR is an example of a community radio station that is actively associated with a training program for emerging communities. This is free training provided by the

Department of Immigration, Multicultural and Indigenous Affairs’ community grants program which is available for groups who would like to broadcast in their community language. There is a special grant of up to $1500 available to new migrant and refugee community radio programs. The grant covers the program material, equipment, specialised training, transport and other costs needed

(NEMBC, Radio for Emerging Communities Brochure). There is also the availability of ongoing funding to communities with non-English language programs.

This kind of training at 3CR is an important example of the need to maintain funded training projects. It is important to ensure that new ethnic communities to

Australia have access to the airwaves and given the fact that they are mainly small and emerging communities, it is difficult to ask them to sponsor their own training. According to Indira Narayan, who is the Broadcasting Project Officer for the New, Emerging and Refugee Communities – Outreach, Training and

Broadcasting at the NEMBC, it is not fair to ask future broadcasters who will invest their time and effort in volunteering to pay for their training, as it contradicts with the mission of community broadcasting (Indira Narayan, 20 Feb

2004).

100 On the other hand, “around 70 percent of all community stations are engaged in training involving external organisations... Training would make up a significant element of the estimated $145 million dollars per year in labour costs provided by community radio volunteers in Australia” (Forde et al, 2002: 76). With this significant input that community radio gives other media establishments (as in the example of Radio Metro that acts as a stepping stone for future commercial broadcasters) the ability to finance training is an issue of major concern because if community radio stations charged a fee in return for their training services, training could become a potential source of income. However, Narayan indicates that it could be difficult to know which participant intends to continue volunteering for community radio and which participant plans to work in other media sectors

(Indira Narayan, 20 Feb 2004).

Whether or not training could prove to generate good returns in the future, the process has its own costs that need to be covered. Therefore it is highly unlikely that any income coming from training could be used to sustain other station operations and needs.

101

Chapter Nine Licensing

In this chapter licensing regulations will be examined. As stated at the start of the thesis, the sector is experiencing a rapid expansion due to more and more stations obtaining licences through the Australian Broadcasting Authority (ABA).

It is therefore necessary to address licensing procedures and distribution in order to gain an understanding of the process that has led to this state of saturation. I will then address methods of resource sharing as an economic strategy for community stations through a youth community radio station in Melbourne called

SYN FM, that merged with another station in order to apply for a full time licence.

Community radio is the sole broadcaster that provides the opportunity for many people to become producers and not just consumers of media content. While there is a prevalent belief that the expansion of the sector is fatal, some believe that expansion is an achievement as this allows for more diverse voices to be heard. This is backed by the fact that local communities have demonstrated their own initiatives by establishing additional radio stations.

To understand how community radio stations in Australia are licensed, licensing procedures will be described in detail. The Australian Broadcasting Authority

102 (ABA) is the independent federal statutory authority responsible for the licensing and regulation of the broadcast industry in Australia.

The ABA is required by the Broadcasting Services Act, 1992, to ensure economic and efficient use of the radio frequency spectrum for broadcasting purposes.

Since 1992 the ABA has been undertaking an extensive national planning program to identify vacant radio and television channels and allocate new licences. The planning process has three stages: (1) the determination of planning priorities; (2) the preparation of a frequency allotment plan (FAP); and

(3) the preparation of licence area plans (LAPs).

In 1993 and 1994 the ABA made public its planning priorities and the frequency allotment plan (FAP). The planning priorities are the order in which the ABA is planning the broadcasting spectrum in different parts of Australia, generally prioritising geographical areas least well served by existing services. The frequency allotment plan (FAP) identifies channel capacity in particular areas of

Australia.

The ABA prepares licence area plans (LAPs) in accordance with its planning priorities. The ABA defines a licence area as a population within a geographically determined area and draws upon census data. The LAPs identify how many, and what character of licences can be made available in each particular area of

Australia. Once each LAP is prepared, the ABA is able to make licences

103 available. The nature of those licences are determined by available frequencies and perceived public need. The ABA is required by the Act to make provision in the planning of services for public consultation.

The ABA determines the coverage area for a proposed licence through its planning process (described above). Technical specifications which are generally non-negotiable are drawn from the LAP, including frequency and maximum radiated power. Applicants include their own technical specifications intended to provide the best coverage for the intended broadcast area in line with the technical planning guidelines prescribed by the LAP. Community stations tend to have lower effective radiated power levels than commercial and public stations.

This reflects both their desire to serve local communities and their financial constraints. In addition to their broadcasting service licence all on-air stations must hold a transmitter licence under the Radiocommunications Act, 1992. The

Australian Communications Authority delegates the power to issue transmitter licences to the ABA. The transmitter licence effectively sets the technical operating parameters for a service.

According to Section 84, Schedule 2 of the Broadcasting Services Act, 1992, allocation of community broadcasting licences depends on the:

a. “the extent to which the proposed service would meet the existing and

perceived future needs of the community within the licence area of the

proposed licence; and

104 b. the nature and diversity of the interests of that community; and

c. the nature and diversity of other broadcasting services (including national

broadcasting services) available within that licence area; and

d. the capacity of the applicant to provide the proposed service; and

e. the undesirability of one person being in a position to exercise control of

more than one community broadcasting licence that is a broadcasting

services bands licence in the same licence area; and

f. the undesirability of the Commonwealth, a State or a Territory or a political

party being in a position to exercise control of a community broadcasting

licence” (Part 6, Schedule 2).

Licences are awarded for a period of five years and renewals applied for no earlier than one year and no later than 20 weeks before a licence expires.

The sector needs to encourage, protect, develop, and make financially stronger those stations already permanently licensed. The sector must also support the licensing of stations which will prove to be of most benefit to the community through their ability to provide an effective community radio station.

SYN FM

SYN FM broadcasts from Melbourne’s RMIT campus. It has recently been granted a permanent licence based on education and training for youth between

105 the ages of 12-26. SYN FM is a result of a merger of two stations: 3TD, the service jointly operated by the RMIT Student Union and radio department, and a high school community radio station in Thornbury. The two stations merged in order to apply for a full time licence.

SYN FM relies on the RMIT Student Union in supplying grants, and the Union supplies this through the student’s compulsory non-academic fee. In return for this support SYN FM guarantees that a minimum number of RMIT students broadcast on air based on a five-year agreement. The Student Union owns a transmitter that it leases to the station for very low rent. In addition, SYN FM guarantees the university that it will not disappear off campus.

SYN FM relies on grants from other sources applied for by two teachers from the

Thornbury school, who have been seconded by the Department of Education to work at the station to set up school-based programming to get other schools involved in training. These grants include $22,000 from the Foundation of the

Young Australians, and $36,000 from the Harold Mitchell Foundation. SYN FM aims to pursue grants from other teaching student unions like the one-off grant of

$30,000 from Deakin University in return for a minimum number of hours presented by Deakin students, and the promotion of campaigns (Jo Curtin, 12

Feb 2003). While these are one-off grants, there are other grants that may continue to flow.

106 SYN FM is hoping that in the future the station will be able to receive similar funding from other student unions, and that this would be continuous. SYN FM is also planning to focus on sponsorship as a main source of income generation, so the station does not rely on government grants. SYN FM offers a membership for

$5 a year for under-eighteens to encourage the involvement of young people.

SYN FM has also been associated with Youth Works Radio, a group supporting young people involved in radio and focusing on youth at risk. This program has proven to be an appropriate channel to apply for grants for SYN FM as there are many grants offered in the area of youth development (Jo Curtin, 12 Feb 2003).

Volunteers are mostly university students and school students.

There are many successful examples in Australia of youth radio stations. A community radio station called Triple B FM, broadcasting from the Barossa region of South Australia (CB Online, 25 May 2004), has developed an innovative program to help school children increase contact with the local community. The program involves the participation of local primary and high schools in the production and presentation of their own material through the

Radio Access Program, a specialist youth program broadcast on Triple B FM

(RAP FM, 24 Jan 2003). Primary students from small rural schools have participated in planning and preparing this program for three years as part of a media studies exercise. It is a good example of a community radio achieving success at grass roots level, as it has recently won a CBAA award.

107 The project has included delivering teachers’ workshops on community broadcasting. In addition, the station also participated in the South Australian

Certificate of Education (SACE) Radio Project at Radio Adelaide 5UV, which involved setting up guidelines and processes for taking radio training into high schools. The Radio Access Program now embraces 30 schools.

108 Chapter Ten Summary and Conclusion

Although there were differing opinions within the sector voiced in this study regarding the deregulation of sponsorship time for community radio, all participants interviewed agreed that the sector was suffering financially and that the current situation is not sustainable. There have been various alternative sources of funding mentioned in this study, yet these funding alternatives need to be accompanied by a secure mainstream of funding such as sponsorship, as they are not sufficient on their own.

Examples from overseas such as Radio Popolare or community radio in Canada prove that it is possible for a station to operate as a non-for-profit organisation with unrestricted time on sponsorship announcements.

To secure sponsorship radio stations must concentrate on marketing strategies that can secure awareness of their broadcast service. Even stations that are currently enjoying strong listener support like PBS, are faced with the challenge of cultivating their listener base due to the projected increase of expenses in the future.

The main case studies used in this research (3ZZZ, Radio Metro, PBS and Life

FM), each illustrate different views regarding sponsorship. PBS was the only station that self-imposed a limit on sponsorship time, as it is a station that relies

109 heavily on listener support as a result of its history and location. Yet the station manager indicated that there were many potential listeners who were not aware of the station’s existence. Other stations supported an increase in allowable sponsorship time, although some were struggling to fill in the 5-minute sponsorship limit already permitted. Yet the station managers were confident that if targeted marketing schemes were adopted and listener surveys were conducted, community radio stations would find it easier to secure sponsors.

Some stations struggle to meet all their overhead costs, just as Radio Metro struggles to raise funds for the maintenance of its transmitter. Therefore there are some challenges that continuously face community radio that would require a reliable income stream to meet them.

The CBAA has recently developed a nationally accredited training framework and has submitted to the government a $32 million dollar proposal to fund training in stations across the country. This includes management training as well as broadcast training. Training could prove to be an excellent source of funding for community radio stations although there is also evidence that training may only be viable on a cost-recovery basis, undertaken as part of the sector’s community service remit. Many of the stations currently running in-house training courses are offering it as a free service.

The ongoing corporatisation of government services in Australia, such as all government-owned transmitter sites and infrastructure sold including Mount

110 Dandenong to Broadcast Australia, has increased community stations’ expenses as well as introduced a great deal of uncertainty about tax costs and arrangements into the future. In the 1970s and 80s community broadcasting operated on the principle of cooperative effort. Today, not only do community radio stations no longer receive assistance and low rates, but are also faced with additional expenses in the future.

Corporate sponsorship and philanthropic relations must be encouraged as they could be instrumental in solving occasional financial problems for community radio such as the purchase of equipment and maintenance of transmitters. Barter systems have further proven to be financially beneficial to community radio, such as Radio Metro’s agreement for advertising on taxis or through magazines in return for airtime.

The merger of smaller stations into one consortium or the establishment of a cluster of networked stations using certain specialised services could lower expenses. When PBS was moving from St Kilda in Melbourne, finding premises with affordable rent and adequate space was not easy. Port Phillip Council had formed a study team to look into assisting arts groups that were leaving the St

Kilda area due to high rent. One of the solutions was to find large council-owned properties and cluster the community/arts groups together. With clever planning and architecture, facilities such as toilets, kitchens and conference rooms could be shared.

111

PBS’s relocation timing did not correspond with another station’s move, the classical music radio station 3MBS, which PBS had been appointed to share facilities with by the Council. PBS would have reduced its overheads substantially had it clustered with 3MBS. PBS’s management believes that the next time PBS moves in 20 years, it will consider grouping with another community radio station. As seen in the case study of Radio Metro, the station shared facilities with an AM radio station. If this had not happened, Radio Metro would have not been able to continue to broadcast. 3ZZZ also shares a building with CBF and NEMBC. There are advantages that 3ZZZ enjoys as a result of this closeness. A form of community radio society has thus evolved.

As it gets economically tougher to exist, the need for cooperation between community radio stations emerges. Kurri station (3KMD), an indigenous station, was recently granted a permanent licence in Melbourne. PBS was helping 3KMD to launch the station by giving advice and fundraising for them; PBS also offered

3KMD use of their studios (Roger Jones, 17 Jun 2002). Community radio stations have been co-operating in order to reduce costs and help each other survive.

During the Wangaraja Jazz festival held every November in Victoria, PBS and

3RRR use each other’s technical volunteers for outside broadcasting. Station managers in Melbourne also meet irregularly and share common issues. Hence, a network of relationships does exist between community radio stations.

112 Throughout the case studies produced in this research, the need for developing marketing strategies to enhance community radio’s funding opportunities has been evident. This was obvious in the need to raise awareness of the existence of certain community stations, the need to find new and alternative ways of income generation and the need to attract more sponsors. Life FM relies mainly on its deal with Yo2Go to bring in sponsors. Introducing new marketing strategies to non-profit organisations could become an integral element for the survival of community radio stations.

In conclusion, then, strategies that may enhance the financial viability of community radio in Australia are as follows:

The deregulation of sponsorship

To enable the community broadcasting sector to fulfil its intended role, the sector needs adequate, more secure and consistent revenue streams to enable better planning and to maintain its future operation. The elimination of restrictions on sponsorship time can secure this. Easing restrictions on sponsorship should not harm community radio as a non-for-profit organisation nor should it contradict its ethos, as long as sponsorship announcements relate specifically to the community that the station is licensed to serve.

113 The encouragement of the application of more entrepreneurial principles

Community radio leaders need to adopt a more entrepreneurial approach in the operation of stations. Raising awareness of the existence of certain community stations, finding new and alternative ways of income generation and attracting more sponsors and listeners are fundamental to the successful operation of any community radio station. An increased focus on marketing principles needs to be promoted with the assistance of marketing experts and business strategy consultants, who could be provided for the sector as a whole.

Sponsors need to be encouraged and not refused

As long as advertisers do not contradict the general rules regarding advertising for the broadcast sector as a whole and are in line with the station’s programming, sponsors need to be encouraged rather than refused. The restrictions on who sponsors the station need to be eased.

Clustering of stations that share a geographical location

The promotion of sharing resources among stations that are licensed in the same geographical location such as facilities, rentals and syndication can reduce large costs that a station would usually bear on its own.

114 Promote the use of non-cash payments

Radio stations sell airtime as a business; therefore, the trading of airtime in return for other services is a way of lowering expenses. Community radio stations need to consider adopting such non-cash payments.

Promote long-term philanthropic relationships

Philanthropy is not very common between community radio and donors in

Australia. Although one-off grants have been successful in securing the purchase of necessary needs for community radio, this is not a primary source of income generation unless longer-term philanthropic relations are established. How this is to be achieved would need to be studied and addressed with the assistance of expert consultation.

Community radio needs to focus on quality of air output and programming

This is important in increasing listenership and ultimately more sponsors wanting to secure spots on air. This can be achieved by focusing on training and refresher courses for broadcasters and managers alike.

Stations relying on government funding should begin exploring alternative income generating options

If government subsidies decrease in the future, stations depending on government funding will need to rely on alternative income generation options, as they are in danger of not being able to operate independently in the future.

115 Although all these alternative income generation options are essential, a vigorous campaign in lobbying for an increase in government funding for community radio must be pursued.

These strategies could begin to help community radio stations address the difficulties the sector is currently facing. It is not the responsibility of community broadcasting organisations alone to secure a future for community radio, but also that of the stations themselves to focus their energy on pursuing new and alternative sources of funding.

Community radio is well developed in Australia and is an asset to every

Australian. The preservation of such a service needs to continue to be a priority to all policy makers.

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120 Interviews

Curtin, Jo (2003) Manager, SYN FM, Personal Interview with author, 12 February.

Gardner, Jon (2002) Manager, Radio Metro, Personal interview with author, 16 October.

Jones, Roger (2002) Manager, PBS, Personal interview with Jo Tacchi, 17 June.

Lorrai, Marcello (2002) Director, Radio Popolare, Personal interview with author, 5 May.

Marson, Linda (2004) Training Consultant, CBAA, Personal interview with author, 5 May.

Martin, John (2002) President, CBF, Personal interview with author, 10 December.

Melzer, David (2002) President, CBAA, Personal interview with author, 10 December.

Narayan, Indira (2004) Broadcasting Project Officer, NEMBC, Personal interview with author, 20 February.

Seymour, Jim (2002) Manager, Life FM, Personal interview with author, 4 December.

Smith, Michael (2004) Sponsorship Manager, 3ZZZ, Personal interview with author, 11 June.

Stanistreet, Ian (2003) Director, CBF, Personal interview with author, 22 January.

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