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Salvatore Scifo <[log in to unmask]>
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Salvatore Scifo <[log in to unmask]>
Tue, 29 Nov 2011 18:22:23 +0200
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---Apologies for cross-posting---


Full report at:

*Executive summary*

1.1 Community radio stations are not-for-profit radio services designed 
to operate on a small scale and to deliver community benefits, known as 
'social gain'. The legislation enabling community radio services to be 
licensed was introduced in 2004 and amended in January 2010. The first 
community radio station launched in November 2005. This is Ofcom's 
fourth annual report on the community radio sector.

1.2 Ofcom has to date licensed 231 stations over three rounds of 
licensing. 196 of these are broadcasting and a further 23 have either 
decided not to launch or have handed their licence back, largely due to 
funding problems. The remainder are preparing to start broadcasting. The 
second round of licensing concluded in August 2010 and a third round of 
community radio licensing commenced in April 2011.

1.3 Community radio serves a diverse range of communities. The majority 
of stations serve a general audience in either an urban/suburban area 
(16%) or a town/rural area (43%). Many services, however, serve smaller 
communities of interest. This includes, for example, those aimed at 
minority ethnic groups (13%), a youth audience (11%) and those with a 
religious focus (6%). Of the licences awarded, 187 are in England, 14 in 
Northern Ireland, 20 in Scotland and 10 in Wales.

1.4 The legislation governing community radio sets out the 
characteristics of community radio services and defines social gain. 
Each station has a set of 'key commitments', which forms part of its 
licence and sets out how it will meet these characteristics and deliver 
social gain. The key commitments includes how a station will make itself 
accountable to its target community and ensure access, its programming 
aims and its commitments with regard to training and other social gain 

1.5 The legislation also requires that Ofcom sets licence conditions 
limiting the amount of income that individual stations can generate from 
on-air advertising and sponsorship. For the majority of stations this 
limit is 50%. However, two stations have lower limits (25% and 10%) and 
a further 18 stations cannot take income from on-air advertising and 
sponsorship at all. These additional restrictions have been put in place 
to protect existing small commercial services whose coverage areas 
overlap with the community services.

1.6 Each station that has been broadcasting for more than a year is 
required to complete an annual report. The reports detail how each 
station has performed against its key commitments and identifies its 
sources of income and expenditure. The financial aspect of the reporting 
enables Ofcom to check whether the station has stayed within the 
legislative restrictions on funding.

1.7 For the period April 2010 to March 2011 Ofcom received key 
commitments annual reports from 163 stations and financial annual 
reports from 161 stations. One station was excused from providing a 
financial report and one station did not provide its financial report in 
time to be included in this report. Another station did not submit 
either its key commitments or financial reports.

1.8 Annual reports were not required from stations that launched during 
this period or subsequently and are therefore not included in this report.

1.9 In 2010/11 the average (mean) station's income was around 63,000. 
The median figure, the mid-point in the distribution of stations' 
income, was considerably lower at 42,000. This is because a small 
number of stations are earning significantly more than the majority.

1.10 The total reported income of the four highest earning stations, 
each reporting over 250,000 income for the relevant period and earning 
a total of just over 1.5m, equates roughly to the total income of the 
74 lowest income stations. If we exclude the four highest earning 
stations' income then the average income drops to 54,500. The median 
figure remains relatively similar at 41,000.

1.11 Stations targeting a community of interest (rather than a 
geographic community) reported a higher income than the sector average. 
Stations serving a general audience in an urban area reported a higher 
average income than town/rural stations (89,500 as opposed to 45,000).

1.12 The average (mean) sector income is down by around 19% on the 
previous year's reported figure. In the 2009/10 period income had 
dropped by around 6% compared to the period prior to this. The median 
income for the current reporting period has dropped by 7% compared to 
the 2009/10 period.

1.13 Trend analysis undertaken on the stations which have reported in 
each of the last two years (i.e. 2009/10 and 2010/11) indicates that the 
average (mean) income for these stations has dropped by only 0.05% 
(70,500 in 2010/11 compared to 74,500 in 2009/10 for the same group of 
stations). This may indicate that the financial situation for those 
stations that have submitted annual reports for the last two financial 
periods has remained relatively stable.

1.14 When compared to previous years, the proportion of income from 
specified sources appears relatively similar. The most significant type 
of income for the sector is grant funding, which accounts for 37% of the 
total. Income from on-air advertising or sponsorship accounted for 
around 21% of total income across the sector. 23% of stations submitting 
financial returns did not take income from advertising and sponsorship 
in this reporting period. Of these 37 stations, 25 chose not to take 
this type of income as a matter of choice or policy. The remaining 12 
stations were prohibited under their licence from doing so.

1.15 Public sources of funding accounted for 25% of the total sector 
income. Local authorities accounted for around 13% of the sector's total 
income. 8% of income came from other public bodies such as the Arts 
Council, health providers, educational establishments and various 
national lottery award schemes.

1.16 The Community Radio Fund, which is administered by Ofcom on behalf 
of the Department for Culture, Media and Sport, accounted for 321,500 
(around 3% of the sector's total reported income). The Community Radio 
Fund continues to be the largest single source of income for the sector.

1.17 Community radio stations, on average, are spending slightly more 
than their income. Stations cost, on average, around 64,500 to run. 
This has declined by 13% compared to the previous reporting period. The 
median expenditure for this reporting period has dropped to 40,000 
compared to 52,000 the 2009/10 period.

1.18 Trend analysis undertaken on the stations which have reported in 
each of the last two years (i.e. 2009/10 and 2010/11) indicates that the 
average (mean) expenditure for these stations has dropped by only 0.03% 
(72,000 in 2010/11 compared to 74,500 in 2009/10 for the same group of 
stations). This analysis gives some insight into how those stations 
reporting for two full financial periods have fared year-on-year.

1.19 The highest cost for community radio stations remains staff 
expenditure, which accounted for around 50% of stations' costs. Premises 
and technical costs, as in previous years, accounted for the next most 
significant outlay.

1.20 Around 44% of stations that returned a financial annual report were 
in deficit. Of these 71 stations in deficit, 24% (39 stations) reported 
this to be in excess of 10,000 (the highest was 90,000). At the other 
end of the scale, one station had a surplus of 75,000. In most cases, 
large deficits are being funded by parent organisations; any surpluses 
are typically invested in the operation of the service.

1.21 Community radio stations broadcast live for around 82 hours per 
week on average, and, in general, broadcast a further 12 hours per week 
of original pre-recorded material. On average around 32% of daytime 
output is speech which can feature a wide range of local organisations 
and community initiatives.

1.22 Some stations focus on particular genres of music, while those 
serving a geographic audience generally broadcast more mainstream music 
during daytime programming, moving to specialist output in the evening.

1.23 The average station reports the involvement of around 78 volunteers 
annually, although there is a wide variation. Together these volunteers 
give on average of around 295 hours a week of their time in total. Time 
given by volunteers can vary considerably from an hour or two to over 
1,000 hours per week.

1.24 At a cost of just over 10 million pounds, based on the reports 
received from stations in this reporting period, community radio in the 
UK delivered:
     A total of more than 12,500 volunteering opportunities
     Over 45,000 volunteer hours each week
     Over 15,000 hours of original radio output each week
     Output broadcast in a wide range of community languages

1.25 There are now over 190 stations broadcasting and Ofcom estimates 
that volunteers contribute close to 250,000 hours a month to community 

1.26 Given that the community radio sector is now relatively mature, 
Ofcom does not intend to publish an annual report of this type for 
2011/12. However, all relevant stations will still be required to submit 
an annual report as part of their demonstration of compliance with 
licence and other statutory requirements.

Salvatore Scifo
Vice-President, Community Media Forum Europe (CMFE)
E:[log in to unmask]    W:http://www.cmfe.eu
CMFE is a network of policy experts, organizations and federations, which aim to support the role of Community Media in Europe.
Registered in Belgium as an International NGO, business n.0822992342

Supported by the EU under the 'Europe for Citizens Programma 2011'