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Ownership and Economics of SSDAB - SSDAB & Community Radio: Past, Present, & Future

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SSDAB & Community Radio: Past, Present, & Future
University of Bedfordshire, Luton - Saturday 25th March, 11am-4pm
This free event was for community radio stations, commercial radio broadcasters and individuals interested in small-scale digital audio broadcasting (SSDAB) and community media.

Published in: Government & Nonprofit
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Ownership and Economics of SSDAB - SSDAB & Community Radio: Past, Present, & Future

  1. 1. Ownership and Economics of Small Scale DAB Steve Buckley Chair, Sheffield Live Radio and TV Managing Director, Community Media Solutions
  2. 2. Ownership and economics of SSDAB  Costs – CapEx and OpEx  Access to finance  Revenue models  Ownership models  Lessons from Local TV  Issues and takeaways
  3. 3. Capital Expenditure  Planning and design  Equipment and software  Equipment installation  Network installation  Contribution – studio(s) > mux  Distribution – mux > tx  Licence application fee  Pre-start operating costs
  4. 4. Operating Expenditure  Transmission site costs  Site rentals, rates, electricity  Network charges  Contribution – studio(s) > mux  Distribution – mux > tx  Multiplex system  Monitoring, maintenance, updates  Mux partnership management  Ofcom licences  Finance costs
  5. 5. Scenario 1 – Single mux / single site Item CapEx OpEx – Year 1 Planning and design 500 Equipment / software 9,000 Equipment install 1,500 Ofcom fees 1,000 1,000 Transmission site 1,000 Tx/mux management 6,000 Total 12000 8,000
  6. 6. Scenario 2 – SFN (2x tx), mux offsite Item CapEx OpEx – Year 1 Planning and design 1,500 Equipment / software 17,000 Equipment install 4,500 Ofcom fees 2,000 2,000 Network costs 1,000 3,000 Transmission site 6,000 Tx/mux management 12,000 Total 27,000 23,000
  7. 7. Start-up finance  Grant funding  Repayable loans  Share issue  Hire purchase / transmission as a service  Mixed model / blended funding
  8. 8. Social investment market Wholesale Equity Loans Grants Public Intermediate Private Private investors Private foundations Banks
  9. 9. Revenue models  Charges to channels / content providers  Administrative cost  Fixed fee  Market price  Hybrid pricing  Charges for additional services
  10. 10. Cost per channel – SSDAB trials Ofcom (2016) Small Scale DAB trials, Annex 5
  11. 11. Ownership models and mux management  Single licence/ local ownership  Content provider e.g. community radio licensee  Local consortium of content providers  Other local ownership – public/private?  Multiple licence mux operator  Technical provider  Hybrid broadcaster / technical provider
  12. 12. Lessons from the Local TV Mux (Comux UK Ltd)  Single licence to operate the mux for all Local TV  Local TV channels equal shareholders in Comux UK  Charge administrative cost to local TV channels  Sell spare mux capacity at market price (NVS x 3)  Distribution from post-tax profits to local TV channels as shareholders  Net carriage cost to local TV channels = zero
  13. 13. Issues and questions  How to guarantee community radio channels have an ownership stake in their local SSDAB mux?  What regulatory constraints will apply to setting carriage fees for channels (fair competition)?  How to define what is “a non-commercial basis” for the provision of SSDAB radio multiplex services?  What prospects to engage a major investor to support a local ownership model for SSDAB?  What services to assure the viability of SSDAB could best be organised on a national basis?
  14. 14. Recommendations and takeaways  No one entity should be permitted to hold more than one SSDAB mux service licence – key driver for local ownership, resilience, public benefit and development of a market for technical services  Regulatory approach should guarantee affordable carriage for community radio while permitting market value to be extracted from other capacity  Each SSDAB mux should be required to be established as an entity that does not operate primarily for commercial gain, including an asset lock and profits applied to community benefit
  15. 15. Recommendations and takeaways  Community radio services seeking to be on SSDAB should be planning, consulting and partnership building now to develop credible local consortia, business models and sources of investment  CMA should explore with major social investors and DCMS the possibility of establishing a national funding scheme to support adoption of SSDAB  CMA should commission business modelling for SSDAB, including insights from the Ofcom SSDAB trials, to support future SSDAB planning and to identify scope and potential for joint services
  16. 16. Thank you for tuning in! Steve Buckley steve@cmso.co.uk

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