Wednesday, 22 July 2009

Digital One - an end to wishing and hoping

Today, transmission company Arqiva announced that it had finally acquired the remaining 63% stake that it did not own of Digital One, the national commercial radio DAB multiplex, from Global Radio. Tom Bennie, Arqiva CEO said: "Arqiva now plans to invigorate DAB with new channels and services and, as an independent operator, we're in a good position to realise the full potential of the Digital One multiplex."

Let’s go back in time.

In March 2007, National Grid Wireless had applied to Ofcom for a new licence to operate a second national commercial DAB radio multiplex and it noted in its application that:

• “Few of the digital-only services on Digital One have been marketed aggressively”
• “Awareness and reach conversion [of digital-only stations] is not keeping pace with the rise in DAB digital radio penetration”
• “Over the past three years, there is no discernable positive [listening] trend for any of the [digital-only] services on Digital One, except for Planet Rock”
• “Despite increasing DAB penetration, the proportion of listening generated by DAB homes to these [Digital One digital-only] services has not altered significantly”
• “DAB digital radio listeners are primarily using their DAB radios to tune in to established [analogue] services”
• “Newcomers to DAB digital radio are primarily replacement set purchasers who have not been motivated by the prospect of new channels or improved functionality”
• “The lack of development of DAB digital radio in cars is also a possible threat to its development”
• “There is [advertising agency] dissatisfaction not only with the current digital radio offering as an advertising medium …. [but also] that too many of the existing stations sound alike and are trying to appeal to the same people”

National Grid Wireless did not win the licence, as Ofcom awarded it to Channel 4 in July 2007. Then Arqiva acquired National Grid Wireless. Then, in 2008, Channel 4 returned its licence to Ofcom unused. Ofcom has not re-advertised this second DAB multiplex licence, so there remains only one multiplex, owned by Digital One.

Now it has been two years since National Grid Wireless identified the problems with Digital One, and its successor – Arqiva – is suddenly in a position where it owns Digital One and it is in the driving seat to do something to fix it. The question is whether that two-year gap has now made it too late in the day for Arqiva/National Grid Wireless to fix things. Two years is a long time in technology, and time has not been kind to DAB. There are significantly fewer digital radio stations on-air now, there is less appetite for investment in new ventures, and commercial radio is suffering badly from the recession.

One wonders what might have happened subsequently if:
· Ofcom had not advertised a second national DAB multiplex?
· Ofcom had not awarded that licence to Channel 4?
· Channel 4 had not burnt through up to £9m of funding before deciding to scrap radio?
· Commercial radio had got on with the task of fixing DAB itself, instead of hoping that Channel 4 would kick-start the platform?
· Fru Hazlitt had stayed at GCap Media long enough to offload Digital One to Arqiva a year ago for £1?

With hindsight, it is already beginning to look as if that two-year period (March 2007 to July 2009) offered a critical opportunity for DAB. Critical in the sense that a lot needed to be achieved, that there was a lot of wishing and hoping for things that never materialised, and much seemed to eventually go backwards, instead of forwards, during that time. If you re-read the bullet points listed above from National Grid Wireless’ application, you realise that these issues have still not been resolved during the last two years. In many ways, regrettably little of significance has yet changed. We are still waiting.

It’s like a DAB Groundhog Day. Every day you wake up wishing and hoping things will be different, but every day the same issues still need solving, exactly as they were the day before, and everyone ends up talking again about finding solutions, but the day eventually comes to an end. And then tomorrow it starts all over again.

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