Is the regional streaming switch-off hurting ratings?

With falls in SCA’s Gold Coast stations today, the company will be looking for ways of regaining share, one of which may be to turn back on its audio streams.

In January this year, all regional commercial stations switched off streaming in response to the PPCA’s demands for higher fees (see our earlier report), but the case has not progressed well for the commercial radio industry, with latest indications being that the government will not step in to reverse a high court decision in favour of the PPCA.

Regional commercial operators are afraid that the PPCA will gouge out so much money in additional fees that smaller regional stations will no longer be profitable. Earlier this year CRA’s Joan Warner told radioinfo that the radio industry considers an additional fee for being heard on another platform as unjustified:

“Record companies now want radio stations pay for how our listeners tune in.  We don’t pay an extra fee when people listen on a car radio, via an FM chip in a mobile phone or via radio chip in a clock radio or hifi system but we are now faced with the prospect of paying an extra and higher fee… if listeners choose to listen to their local radio station online. Exact online simulcasts themselves do not attract additional revenue…” 

In February, Grant Broadcasting’s executive director Grant Cameron explained the financial impacts of additional PPCA costs in more detail:

“The issue is the significant financial risk an interim licence imposes on a station. If the record companies are successful in having the high cost scheme imposed on radio, and it is backdated, the financial liability accrued could be crippling. In addition, stations will be hit with another cost – the cost of setting up a complex reporting and compliance system. The reality of the interim scheme is that it is not “just a $100 a month” as the PPCA persistently and incorrectly states. The interim scheme for a radio station in Sydney, Melbourne, Adelaide, Brisbane, Perth, Geelong, Sunshine Coast, Gold Coast and Newcastle is up to $3,125 per quarter per station and in other smaller regional areas is $312 per quarter per station – plus a requirement for three separate sets of reports being kept so fees can be backdated for their preferred high cost final scheme.”

While the cost of regional streaming will be damaging to the bottom line of smaller stations, networks which operate stations in the larger markets such as Gold Coast and Newcastle may make a pragmatic decision to switch their streams back on if audiences drop. Streaming provides another platform for them to deliver their service to listeners who cannot receive analog broadcasts because of interference or transmission black spots, and reach people in their offices.

In March, we reported on the case of Steve Owens, a Newcastle listener, who examplifies the issue.

With the Newcastle survey out tomorrow, big networks will be seriously considering this issue and may be preparing to switch some regional streams back on.

Click the tag cloud below to read our earlier reports about the dispute.

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