The Economics of Rural Radio in Africa: An Introductory Study into the Costs and Revenues

This 102-page report, published by Farm Radio International (FRI) and funded by the Bill and Melinda Gates Foundation, examines the economics of radio in order to determine the costs involved in developing and sustaining farm broadcasting. One of the objectives of the study was to identify the levels of investment required for radio and related information and communication technologies (ICTs) to provide sustainable, effective contributions to smallholder farmers’ agriculture and food security needs. The aim of the study was to help ensure that the African Farm Radio Research Initiative (AFFRI) explores and develops radio-based communication strategies that can be continually offered by rural radio stations to farmers with appropriate and sustainable levels of public or donor investment.

According to the authors, the field of radio economics in Africa was, prior to this study, virtually unexplored. In part, this is because the spending budgets of radio stations are often information classified as sensitive and not publicly available. Revenue sources can also be difficult to identify and measure. Because of this scarcity of secondary data, AFRRI decided to gather additional information through existing FRI network partners and participating AFRRI stations, specifically radio stations with which FRI has a relationship and could be in repeated contact. Though this was a practical and fairly accurate source of data, as stated here, it cannot be extrapolated widely.

The study revealed a number of lessons about the economics of programming for rural communities:

• The Typology: The “typology” of radio is an import variable to consider when analysing the economics of radio. Public, commercial, and community/associative radio stations have different mandates, different types of revenue available to them, and different cost structures. Available revenue sources can affect the kinds of programming different types of stations are willing or able to broadcast, as well as their fundraising strategies. Start-up costs vary widely depending on the station, and can be anywhere from CAN$7,500 to CAN$8 million. However, researchers found the average to be CAN$100,000. The same is true for operating costs, which vary from CAN$20,330 to CAN$541,000 per annum for public broadcasters, CAN$2,500 to CAN$930,000 per annum for commercial stations, and CAN$2,500 to CAN$286,000 for community stations.
• The Costs: The costs of programming are largely dependent on the level of interactivity of the programme format, the accessibility of additional resources to produce specialised programmes, and the type of station producing the programme. The study found that community stations tended to invest more resources in interactive programming with community involvement and less on in-studio formats. Educational farm radio programming must compete for airtime with other less expensive and very popular programming, such as music and evangelical preaching. Other studies have revealed that more participative, interactive programmes with farmers (featuring, for example, phone-in shows, field interviews, listening groups, and talk shows with local experts) are often popular enough to compete with music and other low-cost formats. The cost of such programming is a significant factor in determining whether and how much will end up on the air.
• The Revenues: The study identified 5 broad categories of revenues available to radio stations: non-governmental/international organisation (NGO/IGO) grants or loans; direct funding from government; private capital (for commercial stations); programme-generated revenues (music requests, greetings/announcements, airtime sales, public service announcement sales, advertisements); and other internally generated revenues (subscription fees, fundraising). Programme and other internally generated revenues are normally less than 10%. NGO/IGO grants and loans make up over 90% of station revenues. The sale of airtime is important revenue for most stations.

The study concludes that further research is needed on the specific requirements of certain stations for production and management of programming for farmers. There is no shortage of investment for starting up radio stations (in particular, community stations), but the common challenge remains the sustainability of such stations beyond the initial investment.