Friday, 12 February 2010

NORWAY: every fifth radio sold is an internet radio, every eleventh is DAB

In Norway, sales of internet radio receivers are booming. During the final quarter of 2009, 22% of radios sold were internet radios, up from only 1% a year earlier, according to Norwegian website Sandnesavisen. By comparison, only 66,000 DAB radios were sold in 2009, 9% of the total 729,000 radios sold during the period, according to data from the Electronics Industry Foundation. Additionally, 200,000 mobile phones were sold in Norway during 2009, none with DAB capability but many with integrated FM radios.

Erik Andersen, information officer for the Electronics Industry Foundation, said: "We estimate that there are somewhere between 12 and 15 million FM radios that are in regular use around the country while, in comparison, only approximately 290,000 DAB radios have been sold in recent years.”

Andersen is not surprised by the rather low DAB radio sales, and finds it problematic that a date for FM band switch-off has not been announced which could be referred to. "We have no desire to mislead customers so, as long as politicians do not give us a switch-off plan, we advise enquiring customers to buy an FM radio," said Andersen.

Jarle Ruud, acting general manager of Digitalradio Norge, the organisation charged with ensuring a speedy and smooth transition from analogue to digital radio in Norway, said: “This is a classic ‘chicken and egg’ situation, both in terms of sales volumes versus a switch-off date, and the channel selection on DAB.” Just as consumers are hesitating to buy a DAB radio before the government announces a switch-off date, Ruud thinks there are many radio stations that refuse to invest in digital transmission equipment because of the potentially lengthy and costly period of dual distribution.

The sales trend came as no surprise to Øyvind Vasaasen, media manager at NRK (state broadcasting) and chairman of Digitalradio Norge, who said: “This is what we predicted. We have remarked to the authorities that sales appears to have stabilised at around 60,000 DAB radios sold per year, and this is also the result for 2009. It shows that the sales trend is far too slow.”

Geir Friberg is managing director of Norway's largest local radio group, Jærradiogruppen, which owns more than 20 of the approximately 150 local stations in Norway. He said: “There is really no great difference between FM and DAB. There are too few radio stations that broadcast on DAB today, and listeners cannot hear the difference between FM and DAB.” Friberg believes that adding more FM stations may even be a better policy than DAB.

Per Morten Hoff, general secretary of IKT Norge (Norway’s IT industry interest group), queried the accuracy of the published sales figures: “More and more consumers have eyes for internet radios, and the Norwegian company TT-Micro has alone sold 20,000 web radios. Since these radios can also receive FM, DAB and 13,000 internet stations, they are strangely classified as ‘DAB radios’ in the statistics. This is apparently to show that DAB is not a total failure. The true DAB sales are probably no higher than 40,000 units, and that figure is getting smaller. There is also the riddle that sales of mini-TV’s are included in the sales statistics of DAB radios.”

Jørn Jensen, president of World DMB Forum, responded: “Hoff does not know what he's talking about. Radio broadcasting on DAB and DAB+, as well as mini-TV’s in DMB, all use DAB technology.”

At the beginning of February 2010, the Norwegian media regulator, Medietilsynet, submitted a 145-page document to the government on the digitisation of radio broadcasting. This is in preparation for a White Paper on digital radio that will be published by the government during 2010. The report was commissioned to map the Norwegian local radio industry’s opinions on the migration to digital radio and how it could be achieved. It collated responses from 55 parties and it concluded:

“The results of the survey reveal that virtually all local radio licensees believe that the digitisation of local radio will have economic consequences for them as businesses. The players fear that a transition will be so costly that only a few of the current licensees will survive digitisation. The consequence may be that ownership diversity disappears and that the market is left with big group operators. Besides mentioning competence-building, information and predictability, the majority of licensees believe that the most important measure the government can contribute to the digitising process is financial support in one form or another.

Local radio licensees who participated in the survey are roughly evenly split down the middle on their view of whether local radio should be digitised or not. Those who are negative to digitisation weigh the economic aspect heavily. When asked what distribution platform they see for themselves as the primary platform for local radio in the future, 52 percent responded analogue broadcasting via the FM band, 33 percent broadcasting via a digital platform such as DAB, DRM, etc and 9 percent broadcasting via the internet……”

“Amongst local radio licensees, 78 percent are negative about a switch-off date for analogue local radio broadcasting. 18 percent are positive about a switch-off date.”

Vigleik Brekke, chairman of the Norwegian Association of Local Radio (NLR) said that there was no economic reason for many of his 150 member stations to migrate to digital transmission. “Closing FM radio will create problems for stations,” he said. “They will not be able to survive.”

Professor Lars Nyre of the University of Bergen’s Institute of Media Studies said he was sceptical about DAB, especially as FM radio seemed to be perfect for listeners.

Asked whether the government’s White Paper will include a switchover date, Norwegian Culture Minister Roger Solheim said: “This is an important issue, and we aim to present the facts in 2010. One of the key questions we want to work with in the White Paper is whether we should fix a switch-off date.” Asked if his predecessor Trond Giske’s policy still held sway that half of Norway’s households should own a digital radio before a switch-off date is announced, Solheim said: “It is certain that digital radio will come, we see that too, in the developments. The question of the timing, and the state's role in it, we must come back to in the White Paper.”

According to industry data, one in three households in Norway buy a new radio each year. Each household owns between 6 and 7 radios.

No comments: