The cost of media: when does geography and reach matter?

Last Saturday someone said something that’s been bouncing around my head seeking analysis ever since.

“Making a radio drama for a local station or a national station costs pretty much the same.”

Seems pretty straightforward when you give it a bit of thought. While you could probably double the budget for effects and background music, or bring in higher-paid actors, essentially, the cost of the craft to put together half an hour of radio (audio) drama is a set amount. I'd imagine it's the same rule for putting a classical concert on the radio too.

This is in stark contrast to the differential between the cost of regional television programming and national/network shows, where the expenses of “upping the production quality” leads to a vast investment in locations and sets, additional craft skills and post-production costs. [And while true for radio drama, it doesn't quite repeat for all radio genre - for example, news (with a need for wider spread reporters around the UK/globe) or sports (with expensive rights).]

Made me think about the cost of other media.

The costs of running the Belfast Telegraph must be cheaper than its sister paper The Independent – partly because it pinches columns from the national paper, but mainly because its network of reporters and columnists is much smaller and involves a lot less travel. So the tighter geographic reach of the readers allows local to be cheaper than national.

What about the cost of producing and maintaining a website? Methinks the cost is a function of the content creation and the publishing infrastructure.

It costs something to create a page of content in the genre the website operates in, whether it be a page to advertise a three bedroom house for sale or a simple blog post.

The framework that publishes the content also has a price tag: the server(s) supporting the site, the sophistication of the content management software, the Flash programming to interact with back-end databases to present the content, etc.

Geography doesn’t really matter (unless you’re streaming a lot of audio or video in which case edge caching becomes a vital part of the distribution infrastructure). It’s the pure reach – the number of hits from wherever in the world – that determines the scale of the infrastructure and the bandwidth costs.

Now if you’re cunning, you can rely on other people to provide a lot of that infrastructure and expertise, threading together different elements from the world of Web 2.0 to minimise hosting costs, provide content management and frameworks for presentation and interaction. But it's not a panacea and leaves you vulnerable to multiple service providers' outages and reliability issues.

So coming back full circle to radio. Why is DAB struggling to take off? The rate of sale of DAB radios is continuing to accelerate. So why are some of the commercial stations closing and their owners scaling back their investment in digital? The commercial word. It's a function of content creation, publishing infrastructure plus commercial return. And if you can't attract a big enough audience - and the majority of digital radio listeners are just listening to existing (available on analogue) channels on a digital set - you can't attract good ad rates, and then you can't pay for any shows!