Saturday, 13 November 2010

NETHERLANDS: government forces DAB upon commercial radio

The Dutch government has adopted a ‘carrot and stick’ approach to its plans to improve the take-up of DAB digital radio. This week, it offered existing national commercial radio stations automatic renewals of their licences for a further six years until 2017, if they agree to broadcast on the DAB platform for the next six years and to cover at least 80% of the country. This renewal will avoid the licences being re-auctioned in 2011, as required by existing law. The industry response? "Commercial radio reluctantly goes digital," said one headline.

National station Radio 538 director Jan-Willem Brüggenwirth
commented: “Our digital [DAB] transmitters have been running at a loss for three years.” Radio 538 reaches 400,000 listeners per week via its internet platform, and Brüggenwirth said he expects an explosion of listening via mobile phones to internet delivered radio stations.

Martin Banga of Vereniging Commerciële Radio, the commercial radio trade body (and chief executive of Sky Radio),
said: "You're talking about millions of [radio] devices in the coming years having to be replaced, not only in homes but also in cars, which is slower than most people think."

added: "Digitalisation is costly and offers little benefit, because almost nobody has a digital receiver. It produces no additional listeners yet, so there is no additional advertising revenue. I estimate that 2,000 people have the equipment actually to be able to receive DAB, so it only goes to the handful of people that have digital radios. Compare that to the 40 million listeners who can receive FM. This means that switching to DAB is relatively costly, and produces little income.”

Originally, there had been a government plan to turn off FM radio broadcasts completely by 2015, but this has been dropped. Instead, the government will auction two national FM frequencies that had previously been licensed to failed station Arrow FM. These licences will similarly require a commitment to broadcast on DAB.

The government’s announcement

“Digital radio has many advantages, such as better quality, more radio stations and the possibly of adding new services to the radio offering. In time, digital radio is intended to replace the current FM radio. To do this, however, the groundwork must first be fulfilled. The existing stations could make an important contribution through this [licence] extension.”

Government commissioned
research in May 2010 had determined that the licence of each national FM commercial radio station in Holland was worth around €30 million.

[with thanks to Paul Rusling]

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