Wednesday, 11 February 2009

DAB: the medium of consumer choice?

It appears there may be a factual error in the Digital Britain Interim Report. I assume it was an accidental mistake in drafting. Obviously, a government document would not deliberately misrepresent the facts.

The Interim Report
states on page 32:
Dedicated analogue radio sets are no longer part of the retail mainstream: analogue continues to be used in bundled products (e.g. radio alarms). But, in dedicated radio, DAB has become the medium of consumer choice.”

There are two distinct assertions here:


  • dedicated analogue radio sets are no longer part of the retail mainstream
  • DAB has become the medium of consumer choice

The second assertion was made by the Interim Report strictly in the context of “dedicated” radio hardware, but the statement was quickly abstracted as a standalone fact. The Guardian wrote that the Report “said DAB had become ‘the medium of consumer choice’”. The Telegraph wrote that “the Report states that DAB digital radio has ‘become the platform of choice’ for radio listening in the UK….” and, in a separate article, said that “Ministers claimed that DAB radio is now ‘the medium of consumer choice’” though it questioned the assertion. Marketing Week wrote that the Report “says DAB has become ‘the medium of consumer choice’ in the UK….” This same assertion was repeated on web sites such as Broadcasting World and Radio-Info.

ASSERTION 1
dedicated analogue radio sets are no longer part of the retail mainstream

I have sat through several Powerpoint presentations at radio conferences, both in the UK and overseas, which claimed that analogue radio receivers (AM/FM) have almost disappeared from retail outlets in the UK. The facts tell a very different story.

A survey of electronic consumer goods on sale from the web sites of three of the UK’s most prominent consumer electronics retailers reveals that the analogue radio platform is still alive and well. In fact, at Argos and Comet, electronic goods incorporating the analogue radio platform solus continue to outnumber those with digital platforms.

Interestingly, when DAB radio receivers were first introduced, most models were single-platform (such as the ‘Pure Evoke 1’). This has changed significantly, so that the vast majority of DAB radio receivers presently on sale are dual-platform (mostly DAB + FM). This change provides a significant ‘safety net’ at all levels of the value chain, should the DAB platform fail to develop into a mass medium for radio broadcasting.

For consumers, the incorporation of the FM platform into DAB radios should encourage hardware purchase, removing the perceived risk of platform failure (viz ITV Digital). However, the continued availability of the FM platform in ‘DAB radios’ is likely to impact consumer usage of the DAB platform. If a consumer buys a ‘DAB radio’, but they continue to use the FM platform incorporated within the hardware for part of their radio listening, they are contributing to the DAB platform’s struggle to gain sufficient traction that FM broadcasting can ever be switched off.

Additionally, one wonders how many RAJAR respondents use their ‘DAB radio’ to listen to stations on the incorporated FM platform, but report this listening in their diaries incorrectly as ‘digital’ rather than ‘analogue’. Surely, if I buy a ‘digital radio’ which clearly says ‘digital radio’ on its facia, then all the content I listen to using that radio must be ‘digital radio’? No wonder the marketplace is confused.

Examining the other side of the retail marketplace, in terms of consumer purchases of DAB radios, an appendix attached to the Digital Britain Interim Report
demonstrates (page 41) clearly that the vast majority of radios purchased in the UK are not DAB, according to data collected by GfK for the Digital Radio Development Bureau. The graph below updates this same data:

The data show that 79% of radio receivers purchased in the UK during the last twelve months were analogue and did not incorporate the DAB platform. The vast majority of radios sold in the UK continue to be analogue, not DAB, which is why, as demonstrated above, electronics retailers continue to stock so much hardware incorporating analogue radio. In some types of hardware, notably personal media players, the market is still almost entirely dominated by analogue radio (in those models that include radio).

In conclusion, the assertion made in the Digital Britain document that “dedicated analogue radio sets are no longer part of the retail mainstream” seems incorrect.

ASSERTION 2
DAB has become the medium of consumer choice

The latest RAJAR radio audience data from Q4 2008 demonstrate that the overwhelming majority of radio listening continues to be consumed via the analogue platform, not via DAB.
In the case of commercial radio, 10% of hours listened are via the DAB platform, whereas 68% of hours listened are via analogue.
For BBC radio, 13% of hours listened are via the DAB platform, whereas 70% of hours are consumed via analogue.

In conclusion, the assertion made in some press coverage that “DAB has become the medium of consumer choice” is incorrect.


SUMMARY

Analogue radio is alive and well in the UK because consumers continue to demand and purchase electronic goods that incorporate the analogue radio platform; and because radio listeners are consuming content predominantly delivered via the analogue platform. These are the facts.

3 comments:

Tony Moretta said...

Tut, tut, tut, Grant. Yet again deliberately misrepresenting the facts to further your apparent vendetta against DAB.

You know very well that 'dedicated analogue radio sets' refers to devices that consumers buy primarily as a radio, i.e. a Hi-Fi tuner, a portable radio or a personal radio.

Taking these three sectors Gfk figures show that DAB receivers outsold analogue only sets last year.

Yes, there are a lot of devices out there that are still sold with analogue radio tuners but radio is just an add-on and therefore hardly used (e.g. a CD
'ghettoblaster'). In fact recent Ofcom research shows that although there may be north of 150 million radio capable devices in the UK (excluding cars) only just over 40 million are actually used regularly, i.e. at least once a week. Of these DAB sets already account for around 9 million.

I don't deny there is a long way still to go to increase listening on DAB, but the Digital Britain report is correct - when people go out to buy a new radio the majority of them buy a DAB one.

Grant Goddard said...

The above comments were reportedly submitted by Tony Moretta, Chief Executive of the Digital Radio Development Bureau [DRDB], the trade body whose “task is to ensure digital radio’s wide accessibility and swift adoption in the UK with consistent and effective marketing”. Its stakeholders are Arqiva, Bauer Radio, the BBC, Digital One, Global Radio, Guardian Media Group, UBC and UTV.

Evidently, the DRDB has chosen to respond to a straightforward numerical analysis of the UK radio market, supported by research, numbers and graphs, not by rebutting the accuracy of the cited data, but by accusing its author of participating in a “vendetta against DAB”. If I were a DRDB stakeholder, I might want to ask Tony at the next Board meeting how such a personal attack in the online space on a professional media analyst with 30 years’ industry experience is consistent with the DRDB mission statement.

Incidentally, if the detailed breakdown of sales data supplied to the DRDB by GfK, according to Tony, “show that DAB receivers outsold analogue only sets last year”, why is a time series of those specific numbers not available from the DRDB web site? As my blog post clearly demonstrated, almost all ‘DAB receivers’ on sale now incorporate the FM platform. What Tony is talking about are mostly ‘DAB + FM’ receivers………. or should that be ‘FM + DAB’ receivers?

HD Radio Farce said...

Keep at it, Grant - call their bluff! The parallels to the US HD Radio farce are comical. The CEO of iBiquity, sent Bob Savage, CEO WYSL 1020 AM Rochester, NY a harrassing email about Savage's outspoken comments against AM-HD. Imagine that - the CEO of a corporation acting like a desperate little child, and has the time for such inappropriate behavior.

The lies are many with digital radio, as with HD Radio the media publishes one misleading article after another. In due time, the liers forget which lies they have told, and eventually the schemes will implode. The HD Radio folks, as with UK DAB, have lied about the number of units sold, of course:

"HD Radio spinners claim a breakthrough year: Pulling a fast one"

"According to a press release from the Alliance 330,000 HD receivers were sold last year. This is a 725 per cent increase from the 40,000 sets purchased a year earlier and therefore 2007 was a 'breakthrough year' for the technology. In 2008 they will sell a million of the things."

http://tinyurl.com/4zgkaw

BTW - my blog sits on Google's Home Page for searches on "HD Radio", and with links to your site in my blog, I am getting quite a few hits from the UK, with related searches containing "DAB" (some are direct links, now).