Wednesday, 24 March 2010

The Digital Economy Bill: let the horse-trading begin, says Shadow Minister

Ed Vaizey MP for Wantage & Didcot
Conservative Party Shadow Minister for Culture
23 March 2010 @ Imperial War Museum North

In today’s radio industry, brands have been shaped more by scarcity of analogue spectrum than necessarily by the market. Brands have been built as much on the frequencies they occupy as much as the characteristics of their content, and commercial revenues have tended to stay limited to local markets.

We very much support the move to digital switchover, both because we believe it is important obviously to upgrade the technology, but because we also think that it will encourage plurality and expand listener choice. We have got to be concerned that people will be ready before any switchover takes place and that there won’t be literally millions of analogue radios which suddenly become redundant. As you know, the government has set a provisional target date of 2015 and we are sceptical about whether that target can actually be met. That is not to say that we are sceptical about digital switchover. We simply think that 2015 might be too ambitious. But we are delighted to see that Ford Ennals is now chief executive of Digital Radio UK, after having steered digital television switchover so successfully, and we hope that all hurdles can be overcome.

We hope that the advent of new digital stations will bring significant new opportunities for independent radio production and it will also free up commercial radio spend. At the moment, as I understand it, the commercial sector spends nearly 10% of its annual revenue on analogue transmission. In the battle for ratings in the new digital world, we would hope that great programming would be at the forefront and that therefore a good proportion of the £40m annual cost of analogue broadcasting will go to independent radio production.

At the moment, the BBC holds four out of the five available national FM licences, and it has the only national digital multiplex. So the aspiration as we move over to digital is as much about making more space for plurality in radio broadcasting as it is about new technology. And if new stations are broadcast, we hope there is plenty of scope for new exciting radio production.

We are also keen obviously not to switch off FM, but to maintain FM as a spectrum particularly for local radio. As you are probably aware, there has been a lot of lobbying during the passage of the Digital Economy Bill about that. I’m pleased to say, as well, that some of the new technology that seems to be coming on-stream, with radios that can switch seamlessly between digital and FM broadcasts, will ensure that there will still be a place for ultra-local FM broadcast stations.

Obviously, many of you will also be interested in what will happen with the Digital Economy Bill as we approach the dissolution of Parliament. My understanding is that the Second Reading will happen on the 6th of April, which I think is also the date that Gordon Brown drives up the Mall to see the Queen to call for the dissolution of Parliament if he wants an election on the 6th of May […] We will have this rather surreal Second Debate in the House of Commons and then we will go straight into what is now called the ‘wash up’ where we horse-trade over the various clauses of the Digital Economy Bill to be passed by the 8th of April. But I can assure you that the deregulation of radio clauses in the Digital Economy Bill have strong cross-party support so, if anything is going to go through, it will be those clauses.

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Q&A

Q: It’s interesting that you touch on digital radio as a platform going forward. Once we find the larger stations, commercial and the BBC, make the switch to digital, and they leave the FM spectrum, do you feel that the majority of listeners will move to digital radio when they vacate their homes, as most cars don’t come with a DAB receiver, so obviously the commercial sector and the BBC are going to be losing listeners because the majority of times listeners tune in to these station is in the car? Furthermore, with DAB, it’s reported and seen by some people in the media/press as being a failed format, competing with new technologies such as DRM. With these changes, do you think that, when people do make the migration to DAB, that smaller stations are going to lose out and that the money from the commercial side is going to be re-invested in programming and we’re not going to lose the quality of the content…

A: Well, I think the problem in the last few years has been a kind of half-way house, so people weren’t really sure what the future of digital radio was going to be, particularly with commercial radios stations that were having to make a double investment which was costing them a lot of money, so we supported the government in making a firm decision that we were going to move over to digital switchover. As I said in my remarks, I think that 2015 might be a bit ambitious.

Your particular point about converting cars to digital radio is, I think, the crucial point. We have got to get to a stage where new cars are fitted – as the French have now mandated, for example – with digital radios and that it gets easy to convert to digital in the car. I think that 2015 is going to be ambitious, but that does not mean that we are sceptical about switchover.

The other point about FM, as against DAB. I think that there will be… There are radios on sale now that switch seamlessly between FM and digital as if you were simply changing channels. I think that, particularly as FM will then be, broadly speaking, a spectrum used by the local radio stations, that won’t be such a problem if you’ve only got a digital radio in your car, as you tend to listen to a local radio station when you’re at home – or you can de-construct that remark. The point you make about whether DAB is the right technology or whether we should be using DAB+, to a certain extent I slightly take the view that we have gone down this road, so let’s leave it. I think the pain of trying to move to DAB+ or beyond will be too much, given how far we’ve come.

Q: I also found it quite interesting that you had the idea that there were going to be more digital-only services. In the past, we have seen digital services such as Capital Life and Core which have come and now gone again because they were not commercially profitable. Do you think that is not going to have an impact when most people make the migration to DAB? Do you think that the local full-scale FM operators are going to suffer?

A: Er, well, er, I hope that they won’t. There will be a distinction between national or big regional radio stations and local stations, and there is already a distinction between local and community which is ultra-local. As I say, we want to put in place a platform that will also enable cross-media ownership at a local level that will enable local media companies to create scale. So, what I hope is that, across the range of media. there will be opportunities for any good radio station that is likely to command a loyal audience – whether that be an ultra-local audience, a regional audience or a national audience – because, in terms of Capital Radio coming and going, I think that was frankly a symptom of that we were in a half-way house about digital. We need to drive digital, which I think is now underway.

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