Well finally the DCMS have responded!  Up and down the country community radio station managers are celebrating the decision with magnums of Pol Roger champagne, while small commercial stations contemplate the rapid demise of their business…

We jest of course, but you’d be forgiven for believing us if you had read RadioCentre’s comments on Radio Today!

In reality it’s all a bit of a damp squib as we predicted in our post on Monday.   By DCMS’s own admission (in their Impact Assessment) it is actually a “Modest Change”.  You can see for yourself in their document and on other radio news websites.   Community radio currently has a 0.7% share of radio advertising in the UK (source Ofcom Communications Market report 2014). If all CR stations take 100% advantage of the new £15k advertising ability it will increase to around 1.4% – hardly earth shattering.   In reality though many community stations will use the new “disregard figure” to reduce the considerable time and effort they currently spend raising funds through non-radio means.

And it is also likely that community radio’s share of the radio advertising market is actually increasing the market size.  After all, how many big advertisers have you heard on your local community radio station?  The reality is that these small radio stations with 25watt transmitters run by part-time volunteers attract a different tier of advertisers who cannot afford to advertise on commercial stations.

So in effect today’s announcement from the DCMS is preserving the status quo and nudging it slightly in favour of the community stations.  In the Government’s mind there seems to be a clear divide between community radio and commercial radio, so they have sought to preserve the regulations that ensure no blurring of the lines.

There are a couple of interesting points buried on page 12 of the DCMS impact analysis:-

1. Community stations will have to request (and pay to apply) to use the new DCMS rules: “where stations will want to take advantage of new conditions a small cost would be incurred by a station to meet Ofcom’s administrative and resource costs – to cover application form, guidance note, assessment and decision”
2. Perhaps if community stations maintain the pressure there is scope to review the £15k “income disregard” limit over time without waiting for slow legislation: “the income disregard figure will fall to Ofcom to review, on an annual basis, to ensure it retains its worth and benefit to the community radio sector. It should be noted it will be possible for the income disregard figure to be adjusted either up down or to remain unchanged”

We wonder what the radio landscape could have looked like if the DCMS had recommended Option 4 in their Impact Assessment (and learned how to spell!) “4. Full deregulation – Not considered as it would turn community radio into commercial radio undermining wider policy goals. Option 2 is the prefered option.”   A renaissance in local commercial radio could be just the tonic that Radio in the UK needs!

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Getting on for a year after it was published the DCMS Community Radio consultation response is finally about to be available.   On the cusp of its publication we thought we’d stick our necks out and review what’s at stake.  We reserve the right to update this post in the coming days!

Just in case you cannot remember, it asked for opinions on four key questions:

1. The lifting of the restriction on community radio stations preventing them from taking any income from on-air advertising or sponsorship if they overlap with a commercial radio licence whose coverage area includes 150,000 adults or fewer.
2. On the restrictions preventing community radio stations from taking more than 50% of their annual income from on-air advertising and sponsorship, if they remain appropriate, and what, if any changes, are justifiable.
3. On the case for further licence extensions for community radio stations in the event of a decision to implement a radio switchover.
4. On improving the effectiveness of the Community Radio Fund.

Associated Broadcast Consultants responded to the consultation last year.   Our response probably won’t win us many friends in the Commercial radio sector, but we like to believe it was considered and balanced:-

1. Of course the advertising restrictions with overlapping small commercial stations should be scrapped.  Heck, if you are worried by the threat from a band of part-time volunteers running a not-for-profit venture, then actually you’ve got bigger things to worry about!   In any case, many of these so-called small stations are actually the local outlet for one of the semi-national radio brands like Heart or Breeze.   It’s akin to saying Oxfam aren’t allowed to sell clothes if there is already a Next shop on the High Street!
2. Of course the 50% funding rule should be scrapped.   The main business of a Community Radio station should be producing good radio, not scratching about running cheese and wine parties, jumble sales etc to diversify funding away from advertising.  If this rule applied to newspapers then we wouldn’t have the Metro free newspaper to read on the way to work.
3. Licence extensions – should be judged upon the merit/track record of the station and the scarcity (or not) of FM frequencies in the area
4. Community Radio Fund is a dangerous distraction.  It risks breeding a dependency culture, and due to its lottery nature cannot be relied upon for stable business planning.  We suggested scrapping the fund and using the funds released to set-up a national advertising agency for the community stations.  Hopefully over time this would become self-funding.

It remains to be seen what the actual response will say in the coming days.  Our guess is that the incumbent broadcasters will win some concessions, but also they will throw a few changes in to try and keep the community radio broadcasters quiet, whilst also alluding to the potential of “Low Cost DAB”.