This week at the Community Media Makers Zoom Drop-In, we’ll be chatting about the cost of living crisis, and its impact on community media. As streaming services are seeing massive falls in subscribers, to what degree is there a shift back to more affordable forms of media going on? Does this mean that DAB Switchover for radio is still a good idea? Do we need to look again at how we use and promote universal access to analogue radio services on AM and FM? How do we ensure that no one is left out because they can’t afford to engage with our media, or pay a premium to access digital radio? Is being forced to purchase a DAB Radio to access stations that you presently get for free an unwarranted DAB Tax? We’ll be chatting about the principles of access and social purpose in our media at at a time of economic stress and anxiety.
High on our minds this summer, as we head towards the autumn, is the projected increase in energy prices, and the impact this will have on the overall cost of living in the UK. Inflationary pressures in the UK economy are making everyday items and services more expensive. Charities across the country are warning that fuel poverty will hit millions of people, forcing them to make choices about what basic services they will use, such as heating and lighting, to get through the dark months of the winter. For many, this will be a choice between heating and eating, as many people are forced to make a choice between keeping the heating on to stay warm, or turning the heating off and being able to afford regular meals.
One indicator of people’s fear of the coming cost-of-living squeeze has been the dramatic increase in streaming service subscription cancellations. The Guardian reported back in May that “the cost-of-living crisis has forced many households to slim down their subscriptions to only a few favourites.” With Netflix, which increased the cost of UK customers’ packages in the spring, actively “in the process of cutting budgets and staff after reporting its first fall in subscribers in a decade.”
Media streaming services have quickly become a canary in the mine for consumer confidence across the rest of the economy. Business Matters reports that “in the second quarter of the year, almost 1.66 million services were dropped from the likes of Netflix.” This fall being “directly attributable to people tightening their belts.” As of July, up to half a million households have now cancelled all their subscriptions to their streaming providers, and are relying on free-to air content, either provided with advertising or by the BBC.
The cost-of-living squeeze is clearly focussing many people’s minds as to what media they spend their money on, and how they can ensure that they maintain a minimum standard of life, without getting into additional debt, or being forced to close-down and terminate commercial media services that they have previously seen as a benefit. The pandemic saw a great upswing in subscriptions to many streaming providers, but because these are a bell-weather service, the swing downwards during a recession is likely to be correspondingly precipitous. Because streaming media isn’t predicated on public service principles, such as universal access and affordable provision, the blow to the media economy is likely to be amplified as the economic winds means consumer spending waxes and wanes. Easy come and easy go.
A related impact from the increase in fuel costs and inflation, moreover, is the urgency many people now feel about fuel efficiency, insulation, and lower-cost renewable energy provision. However, business are reporting that the cost-of-living-squeeze is also likely to reduce many people’s ability to switch to healthier or more energy-efficient alternatives. This is because many people are now being priced-out of the market due to cashflow problems, and won’t, therefore, be able to invest in new and more efficient infrastructure. The lack of access to affordable capital and loans to buy things like electric vehicles, switch to solar panels, or pay a premium for renewable sources of energy, is going to depress the roll-out of these technologies just as we need them most.
The cost-of-living-squeeze has a knock-on right across the economy and society, from which the affordability of our media is also being called into question. Questions are now starting to be raised about the cost of media, both in terms of consumer access to media services, and also the production capacity that the media industry has to deliver low-cost and accessible services in the short term. A downturn in consumer spending will inevitably lead to a downturn in production capacity, as previously stable businesses are knocked-for-six by inflation and the subsequent recession.
If this is a challenge for the corporate and industrially organised media platforms, like Netflix and Disney, then the knock-on effect for community media is clearly going to be more pronounced. If volatility and disruption increase across the community media sector, brought on by these price increases, then we may expect to see an exposure of the shortcomings of many organisations and community groups across the UK, who have had little meaningful investment in the last decade. This turbulence and disruption isn’t just a problem for commercial types of businesses, but is a major headache for the civic and charitable sector as well.
In the light of the cost-of-living-squeeze, then, do we need an immediate review of community media in order to test its affordability and resilience in the face of these challenges? For example, is the push by DCMS and Ofcom to enforce a digital future for radio by 2030, something that might be better delayed until we know what the effect of the recession looks like? Will consumers continue to be enthusiastic about switching to digital radio when doing so is limited by many other rises in consumer costs? The average cost of a DAB radio set, for example, ranges from £20 to up to £150. These tend to be plug-in varieties which sit in a kitchen, or act as an alarm clock. Many of these radios are bought when people update and decorate their homes. Few DAB radios are a casual purchase. Very few sets are portable.
While new cars are now expected to come with DAB radio sets installed as standard, it may be some time until we see the expected levels of market penetration that had been predicted only a few months ago. We’ve seen new car sales plunge to their lowest level since 1996, compounded by a shortage of microchips that operate the digital systems that cars rely on. Short-term disruption of the supply chain might take years to resolve, by which time the public mood to entertain the DAB platform might have moved on, especially as mobile broadband with 4G and 5G becoming more widely available.
The consumer magazine Which has been advising consumers to opt for DAB radio over established forms of analogue radio AM and FM. Which’s expectation is that there will be a ‘digital switchover’ within a decade. Which suggests that while there is no definite date for a switch-off of analogue radio broadcasting, consumers should be weary of purchasing radio sets that are only capable of receiving FM or AM because the broadcast stations that many people rely on, may not be available after the switchover on DAB. As Which reports, “it would nevertheless be very unwise to buy an FM-only radio at this point, as you may find it’s missing your favourite radio stations in a few years.” Despite the fact that many “FM-only radios often look temptingly cheap,” and are “usually found in less digitally focused high street shops such as supermarkets and DIY stores.”
Which might start to update its advice, that we might hold off buying a DAB radio now because alternative IP and mobile devices might enter the market more cheaply, offering more flexible use and forms of connection than a single-use radio set might offer. We’ve seen the increase in sales of Smart Speakers, which is likely to match and maybe surpass that of DAB radio sets in a few short years. Remember DAB has taken over thirty years to get to the level of take-up it has now, and DAB is still a minority form of broadcasting internationally, with Ireland recently closing down their unwanted DAB transmitters.
The question that has to be answered, then, is who can afford these DAB sets in the present economic climate, and who is going to be able to run them as the cost-of-living squeeze takes hold? An FM/AM radio is relatively cheap when compared with a typical DAB radio. The components have been mass-produced for decades, and are therefore readily available and relatively inexpensive to make. If there is a shortage of digital chips, however, we will undoubtedly see the prices of DAB receivers increase significantly, making DAB radio an unaffordable option for consuming radio for millions of people.
When DAB radio was first launched, the digital processors required to convert the digital signal to a sound signal that we can hear, required considerable additional processing and energy use. Decoding a DAB signal, so it can be played on a set, is not a low-cost option, as anyone with an older portable DAB radio set will attest. They quickly eat batteries, or require recharging more frequently than low-power AM/FM radios do. More recent production design of these chips, however, has helped to improve the Energy Ratings of many DAB sets, to the point where they are now comparable with equivalent home-based FM receivers. The problem comes when people use portable sets or have multiple sets in different locations, as they will need to power each DAB receiver consistently in bathrooms, bedrooms, sheds, as well as kitchens and living rooms.
The UK Government’s Digital Switchover plan hasn’t really considered how viable AM and FM will be once the major broadcasters have ‘moved-over’ to DAB. The intention isn’t clear yet of what will happen to broadcasters on the analogue frequencies. The BBC is starting to prepare to turn off BBC Five Live’s AM transmitters from 2025, claiming that it will save money from operating a dual service on both analogue and digital platforms. However, given the coming price-squeeze, does this commitment to digital-moveover by the BBC need to be re-examined and tested for its affordability for the listener in both the short and medium term? Analogue radio, if well maintained, produces a sufficiently robust and high-quality broadcast signal that serves most broadcasters needs. Indeed, DAB in many similar circumstances does not provide a decent signal without a lot of extra work. Many new buildings, for example, are built using steel frames, which makes them impenetrable to DAB signals. To compensate, these buildings are fitted with fibre optic internet access, enabling people to listen to radio and streaming services on super-fact broadband connected devices.
The BBC has a duty to provide universal services, but if DAB becomes unaffordable for a significant part of the UK population, usually those in economic groups D and E, who also have the weakest voices in policy development, then the plans to move BBC services entirely onto DAB should be reconsidered? This might seem like a trivial point, but even £20 for a DAB receiver will be well beyond many people’s means this winter. Not that it was within everyone’s means in the first place. Ofcom has a duty to track the relative affordability of all forms of communication media in the UK, but it took radio out of its tracking system some time ago, despite representations from community media groups that people at the lowest level of economic activity are not being represented in the data that Ofcom collects. This affordability test needs to be put back urgently. The last thing we need is Ofcom dragging its feet and denying that this might even be a problem.
One motivating factor driving the push for digital switchover is the argument that DAB will soon be a pervasive medium, which is ironic given that in the time that DAB has been around, Compact Discs have come and gone in mass appeal. Consumers have moved onto other forms of media. This push for digital, then, might be regarded as somewhat questionable, mostly because it fails to consider the experience of a significant proportion of the population who neither want to access, nor can access DAB broadcasting. The government has repeatedly talked about how it can help both commercial and community media to transition to digital platforms, but this is disingenuous because the decisions about the social purpose and need for reform of our broadcasting and communications systems is only coming from within the radio industry itself, with the help of the motor manufacturers groups. There are no representatives and advocates from civic society, public authorities or groups who represent easily overlooked people advocating for a digital switchover of radio.
A quick call to any charity or mutual aid group will tell you that they need effective forms of communication for people who are too often overlooked by the providers of the industrial and corporate media platforms and content producers. The pandemic illustrated that radio, when broadcast with a strong public and social purpose, is something that people value. Yet, there remains very little investment in supporting and nurturing an alternative community focussed model of broadcasting outside of that offered by the BBC and the commercial corporations.
When digital moveover happens, there is a strong case for keeping AM and FM open for local and community broadcasters only because these radio services can be operated and maintained cost effectively, and will have direct relevance to the listeners in each place, for people of different identities, and for people with different interests. If diversity in the supply of commercial radio was a tangible and cost-effective fact of life, then the radio industry would not need to lobby so hard for increased consolidation of supply, increased use of tightly controlled formats, and a narrow focus on profitability through large-scale advertising.
The radio industry may well face a crisis of affordability in the coming months, which will call into question the sustainability of DAB as both a consumer platform and as a producer platform. As ever in these circumstances it will be the small-scale providers who will feel the crunch. The community radio stations who sustain their service with volunteers, who promote training, and who seek to meet a high-levels of social need by involving people from their communities in the operation, governance and development of their radio services, are the people who are most likely to be challenged by the cost-of-living-squeeze.
Radio still matters, but to assume that we don’t need to think about the social and economic context in which radio will be sustained in the future would be foolish. The BBC is celebrating its centenary this year, and while we can embrace many new communications technologies that offer the potential for an upgraded media experience, such as BBC Sounds and the iPlayer, we shouldn’t just throw away the established legacy platforms. Just because we now have e-readers is no justification for stopping publishing, selling and lending books.
The challenge, of course, is to recognise that when we leave decisions like this solely to the market, then we are likely to see how things can go awry. This is the lesson from the energy market, which can be applied to the media market. Broadcasting is too important to be left simply to the vagaries of corporate international supply and demand because that too often seems to result in cartels who price-gouge and further fuel inflation. The role of government, and the communications regulator, should be to ensure that the market works in the interest of all citizens and consumers. This means ensuring that small-scale broadcasting is accessible, affordable and sustainable across all established platforms.
Enforcing that all broadcasters switch to DAB is, in effect, a DAB Tax that many can’t afford to pay. So, we need to maintain the use of cheaper, sustainable and established platforms that will guarantee universal access. These platforms also must be opened up to increased competition, with the consolidation of the last decade reversed. We must ensure that the public is served by a pluralistic, affordable and universal media, and not ripped off, or dropped entirely when the economic winds change. If Ofcom doesn’t take a stand on behalf of citizens and consumers, who will?