I've been thinking about the SBN insolvency news, which I blogged yesterday. The initial effect on student radio will be a sudden need to find a lot of extra funding or to go off air. A seperate company, SH Media Group, have already announced their intention to offer a student sustainer service. Before we leap into doing any deals, I think student radio should be asking itself the following questions.
A) Do we need a sustainer service?
I think the answer to this one is mostly no. Whilst switching to a sustainer service is easy, it's also increasingly easy to set up your own playout-based sustainer (as many stations have done). Not only is this fairly easy, it also offers more control & more consistent branding.
B) Do we need a need a student-specific news service?
I don't think this is really essential, though of course it's nice to have. Hourly news bulletins don't really help increase your audience much, and it's questionable whether student-specific bulletins are worth the cost of paying a news team. Stations could take IRN, do their own news, or drop hourly bulletins altogether.
C) Do we need a national ad sales house?
This is the crucial question. Stations took SBN mostly for the money, which is received for allowing SBN to sell ads on your behalf. SBN acted as a national ad sales house for student radio, with the ads syndicated across several stations. This is a pretty good service, as selling ads is difficult. Syndicating ads means being able to offer a bigger audience, and reduces the workload (you only have to sell once, rather than individually for each station). The disadvantages are that the sales company would want to take a substantial cut (to make a profit), reducing the revenue available to student stations. It also only works for national campaigns, meaning that stations can and have to sell their own local-based ads themselves.
If outsourcing to a national ad sales house is in principle a good idea, the question is whether it's a viable commercial prospect for the company. The biggest problem with this is that audience figures for student radio can't be measured (unlike ILR stations), reducing the amount of clout you can have in the sales pitch. Students are a highly desirable target audience for advertisers though, and this works in our favour. However, the one problem with selling ads commercially is that you have to make enough money to cover the wages of the people selling the ads. Here, student stations have an advantage over a commercial company in that we don't have to pay the sales team anything (though this of course means you get less hours work).
Companies thinking about trying to take this role in the student radio sector should be asking themselves how they divide sales revenue across subscriber stations (a block annual sum, like SBN, or a monthly portion of revenue raised that month?) and how they can cut costs. Is a satellite feed the most cost-effective way of delivering ads, for example, or could they distribute more cheaply via another method (the internet?).
Even if a company does manage to make a genuine profit by selling ads for a number of student stations, commercial income is never going to be enough to fully cover the licensing costs of student stations. Student Unions are the obvious source of funding. Student radio can and should be a valuable service for students, and so SUs should fund it as part of their student service remit. The problem is that SUs are typically cash-strapped, and student radio has to compete with other student media, sports, and other activities for funding. The next step is to look at other sources of public funding (eg arts councils, local trusts) and to make sure we're providing a good community service. Finally, we can be campaigning for licensing fees to be lowered and for more support from the commercial radio sector.
For years, student radio has depended on the willingness of Campus Media plc to pour money into a business which wasn't returning a profit. For that generosity, we're truly grateful. From now on though, we're going to have to do it the hard way. Ofcom has shown that they are keen to promote community radio, we must establish ourselves within this sector. It's time for student radio to grow up.