Thursday, 26 November 2009

FRANCE: digital radio “already dead”?

“Digital terrestrial radio: already dead?” enquired the headline of a French news web site early on Thursday morning 26 November 2009. It proved to be prophetic.

Only hours later, a press release was published by the Bureau de la Radio (a radio trade group comprising the largest commercial radio owners) which effectively hammered another nail into the digital radio coffin in France. It stated: “As it stands, the Bureau de la Radio estimates that the cost of the [digital radio] project is not compatible with the economics of the radio medium and does not allow plans for the launch of digital radio to proceed under positive conditions”.

On Monday 23 November, more than 70 stakeholders from the radio sector had met at the offices of the CSA [France’s media regulator] to discuss digital radio. Afterwards, the CSA had issued a press statement which claimed that, during the meeting, all those present had endorsed the launch of digital terrestrial radio in France. The meeting had decided to establish four working groups to examine: resource planning, the rollout timetable, transmission signals and data content. A further meeting was planned for February 2010.

However, the Bureau de la Radio has now stated its “regret that the question of the [digital radio] economic model is not being addressed centrally” and has called on the CSA to pursue more detailed work on this issue with stakeholders.

Reflecting the seriousness of this announcment, Agence France-Presse headlined its news story “Digital Radio: commercial radio opposes the launch of digital terrestrial radio”.

There are some interesting parallels between developments in France and the situation in the UK, even though we are already ten years further down the digital terrestrial radio road. Just as in France, the UK government (through its DCMS department) and media regulator (Ofcom) have both been insistent that digital terrestrial radio must replace FM/AM radio broadcasting, without seeming to pay sufficient attention to the pre-requisite for an economic model to make it work.

In the UK:
• industry data points to minimal consumer demand for DAB, which I documented two months ago in this blog entry
• industry data points to minimal revenues from digital commercial radio stations, which I documented three months ago in this blog entry
• industry data suggests that the faster the take-up of DAB radio is accelerated, the faster commercial radio will lose more listening share to the BBC, which I documented recently in this blog entry
• the development of DAB has already proven disastrous for the financial health of the UK commercial radio industry.

After ten years of DAB radio development in the UK, precisely the same question needs to be answered here as is being asked in France this week:

Why has nobody published a realistic economic model for digital terrestrial radio which demonstrates convincingly that it is financially worthwhile?

Perhaps because one does not exist?

1 comment:

HD Radio® Farce said...

Grant,

You are absolutely correct - digital radio doesn't offer a viable business model, when excellent, robust analog FM/AM exists, and listeners are completely satisfied. In the US, HD Radio stations expect the General Public to float their declining industry through IBOC receiver sales, which is absurd. Thanks for calling this turkey for what it is - an inferior technology that doesn't really work well.