ownership and economics of ssdab - ssdab & community radio: past, present, & future
TRANSCRIPT
Ownership and Economics of Small
Scale DABSteve Buckley
Chair, Sheffield Live Radio and TVManaging Director, Community Media Solutions
Ownership and economics of SSDAB Costs – CapEx and OpEx Access to finance Revenue models Ownership models Lessons from Local TV Issues and takeaways
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
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
Scenario 1 – Single mux / single siteItem CapEx OpEx – Year 1Planning and design 500Equipment / software
9,000
Equipment install 1,500Ofcom fees 1,000 1,000Transmission site 1,000Tx/mux management
6,000
Total 12000 8,000
Scenario 2 – SFN (2x tx), mux offsite Item CapEx OpEx – Year 1Planning and design 1,500Equipment / software
17,000
Equipment install 4,500Ofcom fees 2,000 2,000Network costs 1,000 3,000Transmission site 6,000Tx/mux management
12,000
Total 27,000 23,000
Start-up finance Grant funding Repayable loans Share issue Hire purchase / transmission as a service Mixed model / blended funding
Social investment marketWholesale
Equity
Loans
Grants
Public Intermediate Private
Private investor
s
Private foundations
Banks
Revenue models Charges to channels / content providers
Administrative cost Fixed fee Market price Hybrid pricing
Charges for additional services
Cost per channel – SSDAB trials
Ofcom (2016) Small Scale DAB trials, Annex 5
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
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
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?
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
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
