Every so often, we receive questions from listeners about what goes on at CKUA, behind the scenes. As such, we’re pleased to present Marc’s Mailbag, wherein our CEO, Marc Carnes, answers some of the more interesting queries we’ve received recently.
“You will often hear people say that there isn’t anything else out there like CKUA,” Carnes explains. “And they are right; there isn’t. CKUA is the only station with a provincial mandate in Canada. No other media organization reaches over 700 communities on six continents to promote Albertan and Canadian music and tell Alberta’s arts and culture stories every day. There isn’t another station in Canada as heavily reliant on financial support from its listeners. The program variety, the music collection, a 93-year heritage – only found at CKUA.
“Mainstream media consolidation means we are losing local, independent media voices at an alarming rate. CKUA is doing everything we can to buck the trend, thanks to our listening community’s support. However, being an island of one doesn’t mean that we are isolated from the business challenges and market forces of the world around us. We are more vulnerable to it.
“Without peers to compare us to, on the surface, it’s hard for people to understand or appreciate the uniqueness of CKUA. What’s more, CKUA is embarking on a period of strategic and proactive change brought on by rapid technological disruption and increased competition for your time, attention and financial investment. Closer to home, CKUA’s, and Alberta’s, demographics are shifting. With that comes a change in media consumption patterns, music preferences and community outlets.
“We want to bring you along on this journey of change and discovery with us. In recent months, you may have noticed the addition of commercial segments that aim to educate you about various aspects of CKUA that make us so unique. It has prompted lots of thoughtful questions from listeners, curious to understand more. As a result, we are introducing a new periodic segment to our newsletter called Marc’s Mailbag. Here I will try to answer your questions about CKUA. I will talk in more detail about some of the unique aspects of CKUA, some challenges and the tremendous opportunities in front of us that are possible with your support.”
This month, we hear from Thomas, from Airdrie, who wrote us some well-reasoned and interesting questions during our 2020 fall fundraiser, and Marc responds to them here, in kind. First, a positioning statement by Thomas with Marc’s answers below:
I’ve been listening to the fundraiser campaign over the past couple of weeks and I have been an avid CKUA listener for I don’t remember how long now! Twenty to thirty years, I am guessing.
I am considering increasing my monthly donation, but I wasn’t able to call in while working. I have a few questions first though that I am hoping you can answer for me.
I was very surprised to learn that CKUA requires up to 6.5 million dollars annually to operate. I figured most of your funding came from your publicly supported listeners and donors and your annual budget was around $1 million. I was off by a few million, that’s all.
My first question: Where does CKUA get the majority of its funding for operational costs if not from listeners and other private donors? It is my understanding that you do not receive any government financial support.
Thanks for the question Thomas! This will give you a sense of the breakdown.
We have three sources: Public funding, Business-to-business, and Donors.
We receive approximately $75,000 from the provincial government and Edmonton Arts Council, or about 1.5% of our budget. Compare this to most arts and culture groups in the province, who reliably receive between 15-40% of their operating funding from government sources, and you begin to see why we are so reliant on donors. On the campus radio side of the equation, they receive the bulk of their operating funds through student fees.
We generate roughly $60,000 in endowment fund disbursements, or 1% of our budget each year. Our advertising revenues factor in another 15% of our budget in a given year. About 1/3 of that is from partners in the arts and culture sector, and the rest largely from independently-owned small and medium-sized businesses across the province.
We own Alberta Hotel, our studios in Edmonton, and we rent out half the building to tenants – also small and medium-sized businesses.
We have 7,000 monthly donors who contribute about $2 million each year.
We have 5,000 donors who give once or twice, usually through the fundraising campaigns. That equates to $1.2 million, give or take.
We also have some other sundry revenue sources, like applying for project grants and renting out space on our transmitter towers to other broadcasters.
The challenge is that our listeners have only ever seen the tip of the iceberg—the $1.2M or so from the public fundraising campaigns. But the other 340 days a year we need to generate revenues as well. Compare us to a commercial radio station that lives on advertising revenues alone (and the advertising space has been clobbered this year), and we are actually more secure than most radio stations, in terms of having a more diversified revenue portfolio.
My second question is: Did you need to raise that major amount of increased support because of increased costs due to COVID, such as lost advertising revenue (although I didn’t think CKUA receives much ad revenue)?
Yes, we are forecasting a drop in ad revenues this year. Arts and Culture doesn’t have a lot to promote right now. Small and medium-sized businesses are hurting like everyone else. We also have tenants who are struggling with rent like so many. So, effectively, we’ve hit a situation where we don’t have government support to lean on, and our business-derived revenues have taken a big hit. If you take away government and business from the equation, the only place left to turn is to our community and ask them to help pick up the pieces. For that to happen, we needed to start showing just how big of an operation CKUA is to understand the need for more revenues from our listeners.
That isn’t to say that we haven’t done a lot of work to control expenses on our end. We are a non-profit, so lean to start with, and have made significant operational cuts. On top of that, all CKUA staff have taken an average 20% work reduction to lower costs. You may have noticed more rebroadcasts of late – that’s why.
Thanks again for your questions Thomas! We’ll get to some of your technical questions about our transmitters and digital streaming in our next Mailbag.
Do you have a question for Marc’s Mailbag? Please write us and we’ll get it to Marc right away!