Saturday, 11 September 2010

Without local commercial radio, switchover to DAB will not happen

I am often asked why I believe that digital radio switchover will never happen in the UK. My answer is always this – the available statistics and data on consumer take-up of DAB radio fail to demonstrate that it will grow sufficiently to become the mass medium for radio broadcasting. I can see nothing in more than a decade of figures to offer an inkling that DAB radio will ever become anything more than a minority interest, compared to FM/AM.

Audience data published by Ofcom in its latest Communications Market report (page 219, Figure 3.34) help us to understand the current roadblock with DAB consumer take-up. Ofcom divulged the proportion of listening to individual stations by platform, data that has not been made public by RAJAR (see graph below).

The information demonstrates that a few stations, notably AM broadcasters BBC Five Live and Absolute Radio, are making significant headway with attracting audiences on digital platforms. However, in order to put these data in a market perspective, it is necessary to understand the relative importance of each of these stations.

The above graph helps put the planned transition from analogue to digital in a proper market perspective. For example, Absolute Radio has made much of the fact that more than 50% of its listening is already attributed to digital platforms. However, in the context of digital radio switchover, its audience is so small that it has little overall impact. The volume of listening to some local London stations is greater than to national Absolute Radio.

The government has stated that it will not consider ‘switchover’ until at least 50% of radio listening is via digital platforms. Digital listening to the ten stations and station types shown in the above graph add up to only 20%, even after ten years of DAB (digital-only stations bring the total to 24%). There is a reason that it will prove an impossible challenge to get this up to the 50% government target.

Around 300 local commercial radio stations account for 31% of all radio listening. Their success in convincing audiences to migrate to digital platforms will be a vitally important part of the aim to achieve the 50% criterion. However, only 15% of local commercial radio listening is attributed to digital platforms, the lowest proportion (along with BBC local radio) of the ten stations/types in the graph. The task to improve this performance from 15% to the 24% national average is likely to prove impossible, let alone to grow it to the 50% criterion.

This is because many stations in the local commercial radio sector cannot and will not ever be available on DAB because:
• The economics of DAB transmission make it too costly
• The unavailability of any local DAB multiplex in some areas
• The unavailability of space for stations on some local DAB multiplexes
• The industry grand plan to amalgamate existing local multiplexes into regional multiplexes makes DAB transmission, for small local radio stations, more irrelevant and more costly.

These issues had been identified by the government in its Digital Britain consultation in June 2009:
• “merging [DAB] multiplexes will reduce the overall capacity available for DAB services, therefore reducing the potential for new services”
• “reduced capacity on local multiplexes might result in some services losing their current carriage on DAB.”

The government’s decision to ignore these outcomes is now coming back to bite it on the bum. Not having a plan to ensure that all local commercial radio stations can be made available on DAB will only ensure that the government’s 50% criterion can never be met.

At the same time, the determination of the largest players in the commercial radio sector to forge ahead with DAB, regardless of these unresolved issues, has created a serious schism between them and the smaller local radio groups and independent local stations who have no digital future. These issues were raised in parliamentary debate of the Digital Economy Act but were ignored and trivialised by the DAB lobbyists.

Some local commercial radio owners are seriously alienated by the way their predicaments have been ignored by large radio groups and their trade organisations – RadioCentre, Digital Radio Development Bureau and Digital Radio UK. One such group owner, UKRD, has taken direct action by running a campaign on-air and on its stations’ websites against the government’s proposed switchover to DAB.

A page entitled ‘Love FM’ on the Wessex FM website says:

“As you probably know Wessex FM proudly broadcasts to this area on the FM frequencies 96 & 97.2, and had been hoping to for many years to come. However, recent developments mean that we may not be able to broadcast in this way for much longer. In fact, the current plan from parliament is to switch off the use of FM for many stations in 2015. That means, soon, you may not be able to listen to us on FM.”

William Rogers, UKRD Group chief executive officer explained:

“We are not prepared to encourage any of our listeners to go and replace their perfectly satisfactory analogue radio set with a DAB one which may not be able to pick up a DAB signal at all and if it can, it may be a signal which may be wholly inadequate. Even worse, the very station that the listener may have heard the [DAB marketing] advertisement on may not be on DAB or even have a DAB future.”

Pam Lawton, managing director of another UKRD-owned station, KL.FM in King’s Lynn, said:

“We are not on DAB at the moment and currently most of the DAB digital platforms have been snapped up. As things stand, West Norfolk does not have a digital platform because there are limitations about how many there can be and there will only be one station that will serve Norfolk. That station will probably be based in Norwich so once the government decides to turn off FM, we will have to switch off for good.”

The paradox is that the radio sector stakeholders who have been pushed aside and ignored by the DAB movers and shakers are some of the very ones who hold the key to enabling digital radio switchover to happen. Unless the huge audience for local commercial radio can be persuaded to migrate its listening to DAB, the 50% criterion cannot be achieved.

At the same time, some stakeholders who are making the most noise about DAB switchover matter the least in the scheme of things. Absolute Radio can trumpet its individual success with digital listening, but it is contributing less than 1% to the 50% criterion that has to be reached, despite being a national station. It is the hundreds of local commercial radio stations that, collectively, matter the most. Yet, many of these have been denied any seat at the DAB table.

As politicians have learnt through the ages, unless you can convince the little guys (the local radio station owners) and the ‘man in the street’ (the radio listener) to endorse your grand scheme, a scheme is all it will remain. Fancy words in boardrooms, lengthy documents from corporate consultants and detailed project management timelines will inevitably come to nothing, without involving and bringing on board the people who really matter.

It is the radio industry data, particularly for local radio, that tell the real story of DAB and why it can never become the mass radio medium for UK consumers. That is why digital radio switchover will not happen.

[all RAJAR data are Q1 2010, as used by Ofcom]


dpomic said...

Another great analysis and summary. With relevant graphics. It certainly seems the DAB proponents (and their supporters) are not looking at their own info, or understanding it. Or, they are ignoring it for short-term interests. And, they are not looking or seeing beyond, at the impossibility for a now old-and-only-local standard to succeed.

In addition, Internet radio complements all terrestrial radio—FM/AM/DAB/DAB+/DMB/HD—adding location and time shifting to live and within range broadcasting. And, it’s now driven by mobile, despite radio industry promotional focus on DAB (trying to maintain licensed control), avoiding Internet.

In addition to all public and commercial radio stations, Internet radio includes community, student, hospital, pirate, and Internet-only—many hundreds more in the UK. And, the rest of the world. And, the personal tracklist services.

PCs and mobile phones increase wherever and whenever listening beyond radio-only devices. And, automotive Internet access—driven by mobile—is coming faster then DAB smoke. Without significant additional costs for Internet radio devices or distribution to listeners or to broadcasters.

Finally, the issue of building-out DAB transmission to match FM reception continues to be avoided. Doesn’t building out DAB from the current ~90% reception to ~95% about double current costs? And, from ~95% to ~99% about double costs again? Who pays the £ billions? Commercial radio can't afford it and is looking for the BBC or Government. Who wins?

Anonymous said...

You can try and push internet radio as much as you like, but if there's a monthly subscription or tariff involved it isn't going to replace FM/AM - end of story.

Any replacement for FM/AM needs to be free at the point of use- I don't care if it's only a tenner a month, or if it's bundled in with this or that package (as the internet radio proponents keep saying).

I'm not interested until an ISP lets me use it on the move on a portable device for free, which of course they never will.

DP said...

Dear Anonymous,
The point is that FM and AM do not need to be replaced. They can simply continue. And listeners can remain very satisfied with what they have. Not be forced to change. Particularly not for something which is inferior for them.

Internet radio offers an optional complement to FM and AM (and DAB/DAB+/DMB/HD) for those who want to use it. An optional way to listen to their terrestrial broadcasts—and also to a greatly expanded range of programming. Including location shifting, to be able to hear from and to more locations. And, time shifting, to be able to hear later and again. Also, improved sound quality. The ability to do it is increasingly included with other devices and services and their costs.

Internet radio is no additional cost with home broadband now. With mobile broadband, it depends on the plan and the amount of use whether there is any additional cost now. Mobile broadband usage and capacity are growing quickly and unit costs have been and are decreasing. And mobile streaming is becoming more efficient. Mobile Internet radio listening costs are headed quickly to be insignificant for most. (Video, with 10X the data requirements, is the much greater problem to manage.)

Significant radio listening is growing on PC, mobile, and automotive devices. The desire to be able to listen across platforms is growing—to listen easily, wherever and whenever. It is Internet listening, not DAB (or its cousins).

It’s DAB that intends to force replacement of FM and AM listening. Without including anything of value to listeners. At best, only a more limited version of local and live transmission. Inferior reception. Inferior sound quality. And significant forced costs for a limited selection of single purpose devices. Compare your forced costs if you proceeded with DAB devices to replace your current FM and AM, with what you might optionally spend for additional Internet radio devices and services over time.

Terry Purvis said...

According to the Guardian today (15th Sept) Ashley Tabor of Global Radio says he is committed to DAB, but that the BBC must pay for the cost of the infrastructure. What a joke.