A description of the modelling methodology and assumptions for calculating the direct economic welfare from radio broadcasting can be found in Annex B.
Consumer surplus
We estimate that the consumer surplus from radio broadcasting has risen in nominal terms by 74% since 2006, from £1.6 billion to £2.7 billion in 2011 (42% in real terms), due to an increase in audience and a greater choice of radio stations as a result of the increasing popularity of DAB. The results are shown in Figure 4 .18 below.
Figure 4.18: Consumer surplus from radio broadcasting [Source: Analysys Mason, 2012]
Producer surplus
Our results for the producer surplus from radio broadcasting are shown in Figure 4 .19 below. These are based on an update of the accounting analysis used in the 2006 study. It can be seen that the producer surplus has increased by 15% since 2006, from £0.30 billion to £0.35 billion in 2011 (a 3% decrease in real terms).
Figure 4.19: Producer surplus from radio broadcasting [Source: Analysys Mason, 2012]
The external benefits of radio broadcasting are similar to those for TV, although the provision of traffic information which allows drivers to avoid congested areas is a further significant external benefit which applies more to radio than to TV.
NPV
Finally, we have calculated the NPV of the consumer and producer surplus from radio broadcasting for the period 2012–2021 for our base case, as shown in Figure 4 .20 below. At £28.6 billion, the NPV is around one-third the size of that from TV broadcasting, although the benefits are essentially free to consumers since no licence is required. As with the TV calculations, we have not included the cost of receiving equipment (in this case, radios) in the consumer surplus calculation.
Total:
£28.6 billion
|
Figure 4.20: NPV of surplus from radio broadcasting (£ billion) [Source: Analysys Mason, 2012]
|
Share with your friends: |
