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A Future for Community Radio in Australia

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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
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