Wednesday, 31 March 2010

French Culture Minister: launch of digital radio not “a priority”

On 29 March 2010, the French Minister of Culture & Communications, Frederic Mitterand, spoke at the monthly luncheon of the Association of Media & Communications Journalists. He was asked about the much delayed launch of digital terrestrial radio in France and replied:

"I note that the cost of the [digital radio] project is significant, that a number of the radio licensees are not at all favourable towards the project, and that it is the CSA [media regulator] that for the moment is escalating the issue. The CSA itself should still submit a report on the [digital radio] issue with recommendations, although I know roughly what will be in such a report. I have the greatest respect for the CSA, and I have the greatest feelings of respect for [CSA president] Michel Boyon, but we are not exactly on the same wavelength.”

"Without organising a funeral with great pomp and ceremony, which would presume a death, I think that everything will inevitably be digital one day. And then radio will be too. Put simply, in today’s economic conditions, in the general context of radio, and with the lack of consensus around this [digital radio] issue, I do not think its resolution is a priority and the launch of digital radio will not happen this year."

The video is available here.

Saturday, 27 March 2010

When is an FM radio not a radio? When it’s in a portable media player, says digital switchover group

Digital Radio UK is the new organisation funded by the BBC and commercial radio “to ensure that the UK is ready for digital radio upgrade”. In February 2010, Digital Radio UK submitted written evidence to the House of Lords Communications Committee informing it of the latest data for UK retail sales of radio receivers. Amongst other things, the data showed that:

• Sales of digital radios in 2009 were under 2 million units, their lowest annual volume since 2006
• Sales of analogue radios seemed to have dropped dramatically to 5.2 million in 2009 from between 7 and 8 million during 2008
• As a proportion of the total volume of radios sold, digital radios had apparently leapt to 28% in 2009 from 21% only a year earlier.

I was puzzled. Why had sales of analogue radios fallen so dramatically by year-end 2009 (see graph below)? There seemed to be almost no substitution effect by DAB radios, whose volume sales were also down, though not by as much as analogue radios. It appeared as if many consumers had just suddenly decided to stop purchasing radios. I wrote to [*****], the company that [***********************************************] Digital Radio UK, asking why the data had suddenly ‘jumped’ in Q4 2009.

The written response from [*****] was:

“The q4 2009 drop is more about the basket of products included as areas previously included such as set top boxes and portable media players were excluded from the data at that time.”

[*****] defines a ‘portable media player’ as any device that plays music and has a 3.5mm headphone jack: MP3 players, iPods, portable cassette players, portable CD players, etc. From Q4 2009 onwards, when any of these devices are sold in the UK and also include a radio, they are no longer counted as ‘a radio’. Now, every MP3 player sold that includes a radio is simply excluded from these statistics. This is why the number of radios sold appeared to drop so significantly (by around 2m units per annum) in the latest Digital Radio UK data.

Why was this change in definition made? It is hard to understand the logic because a radio within an MP3 player is still used as a radio and has no other purpose. It is a real radio, not a fake radio, but to [*****] it is no longer a radio.

The answer seems to be that a huge number of MP3 players are sold in the UK (value £666m in 2009) but almost none of them incorporate a DAB radio. When an MP3 player does include a radio, it is inevitably an FM radio. MP3 players are manufactured and sold globally by multinational electronics manufacturers who understand that FM remains the universal standard for listening to broadcast radio, while DAB is still confined to no more than a handful of countries. Global manufacturers are reluctant to mass produce an MP3 player incorporating a DAB radio because the sales market would be limited to a few, small territories.

I checked the Argos retail website this week and found it offered 82 models of MP3/MP4 player. None incorporated DAB radio, whereas there were 16 that included an FM radio and 66 that had no radio.

It seems that the last resort for Digital Radio UK to be able to demonstrate to a sceptical public (and increasingly sceptical members of the House of Lords) that DAB radio is ‘taking off’ with consumers is to fix the figures to make it look that way. If you cannot convince the public to stop buying analogue radios, you can ‘bend’ the figures to magically make it appear that the public is buying fewer analogue radios.

Earlier this month, I documented how Digital Radio UK had similarly fixed the same dataset from [*****] to declare in its publicity that “when buying a radio, more than 75% of people choose a digital radio”. This was not at all true. The real fact was that, in December 2009 alone (December always being the peak month for DAB radio sales), 76% of people who bought a kitchen radio bought a digital kitchen radio. That was an attempt to brazenly redefine ‘a radio’ as only ‘a kitchen radio’ so as to exclude clock radios, tuners, in-car radios, boomboxes, etc.

I can only repeat what I said then. However desperate you might be to try and make DAB radio a success, how is it justifiable to deliberately mis-state data so outrageously in print? And to Parliament?

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.

[…]

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.

[…]

Government: digital radio switchover in 2015 “still on track”

Tony Lloyd MP Manchester Central
Chair of the Parliamentary Labour Party
23 March 2010 @ Imperial War Museum North

One of the commitments that the government has already made is the switchover to digital [radio]. That will go ahead, although it will go ahead dictated by the pace of change that the markets themselves will involve. You know the ground rules for that. I was talking to a multimedia producer who just tells me she can’t get digital radio in her own home. Now this is still one of the big issues because, until we have got 90% coverage of the country and until we see something along the lines of 50% of people using digital, that switchover won’t take place. But all the evidence is that we are still on track for that switchover to take place by 2015.

The second debate within that is how is that paid for, how far will the commercial sector – the commercial radio stations – be prepared to pay to invest in the digital networks and how far will the BBC contribute? Because what is clear is that there always will be a role for the BBC to fund because there will be parts of the country where the commercial sector simply won’t take that process forward.

We know that the analogue [radio transmission] system, even if we do nothing at all to maintain it, will require investment of the order of £200m simply to keep the existing networks up and running and that money frankly is better spent on the switchover to digital and, of course, there will be consequential changes in terms of the licensing framework at the point of switchover.

[…]

This government, the Labour government, once re-elected, probably on May 6th ….

Monday, 22 March 2010

The DAB challenge: most radios stay tuned to one station most of the time

A ‘thought piece’ by Ipsos MediaCT, entitled ‘The Future of Radio’, identified the many challenges for the government’s proposed digital radio switchover to be successfully implemented by the 2015 target date:

• digital listening share has to more than double in just four years
• the UK's DAB coverage [..] is currently around 90%, but there is now the need to extend it across all the UK population
• a requirement to improve the quality of [DAB] reception and sound
• the issue of people having to replace their analogue radio sets
• less than 1 in 10 of these [existing radio] sets is DAB, so a very significant number of replacements need to be sold
• all manufacturers are committed to producing sub-£20 sets in the next two years
• more digital radios need to be fitted in new cars and more digital converters need to be sold for existing cars
• take-up of digital platforms has been steady, but not remarkable
• digital listening has a long way to go to meet the Government’s targets
• there are a number of barriers to overcome to meet the demands of the Digital Britain Report, which require investment – in a recession – and co-operation between manufacturers and broadcasters
• DAB will have to be marketed properly and quickly

A Capibus study conducted by Ipsos found that a high proportion of radio receivers were tuned to the same station most of the time:
• 86% of kitchen sets
• 79% of bedroom sets
• 74% of living room sets
• 70% of car radios

Ipsos asked:

“What happens when the switchover occurs and the station now only broadcasts on DAB? Do listeners go out and buy a new DAB set for each room in the house or switch their listening to another station or stop listening? This will be a major issue for stations and their audiences. It will be the listener who will be in control of radio's digital destiny.”

Wednesday, 17 March 2010

FRANCE: Digital radio “is not progressing one inch”

A meeting of radio sector stakeholders on Monday 15 March 2010 at France’s media regulator, the CSA, failed to progress the plan to launch digital terrestrial radio this year. According to Le Point, the commercial broadcasters – RTL, Europe 1, NRJ and RMC – demanded a moratorium. State broadcaster Radio France is one of the few continuing to support the CSA’s plan to launch digital radio, delayed from 2009 to mid-2010, using the T-DMB transmission standard.

A member of the Bureau de la Radio trade organisation commented: “There is no economic model [for digital radio]. The choice of the [T-DMB] broadcast standard adopted in Bercy is very expensive. The upside for listeners is not sufficient for us to fund a third broadcast platform to add to the existing Long Wave and FM [platforms]. … We are disappointed because this meeting has not enabled anything to progress. What happens next?”

According to Le Point, the regulator has responded only with “radio silence”. Its headline read: "Digital terrestrial radio is not progressing one inch."

Saturday, 13 March 2010

DAB converters for portable analogue radios? It’s a “no no”

All of us would like to invent a ‘killer application’ that could captivate consumers with its usefulness, change the future direction of technology, and make millions. But there is a big difference between inventing one in our heads and turning it into a technical reality in the marketplace.

The converter/adapter that is able to magically transform a portable analogue radio into a DAB radio is one such invention. It exists in the heads of the DAB radio lobby as a means to persuade politicians that mass consumer conversion to DAB is a possibility rather than a pipedream. Unfortunately, it does not exist in reality.

When the notion of such a converter was mentioned last year, I examined the analogue portable radios scattered in almost every room of our home. The only access to their internal electronics that some of them allow is via a headphone socket – and when you insert anything into that, the loudspeaker cuts out. So how exactly could any kind of gizmo be ‘added’ to such radios to transform them into DAB?

My doubts were confirmed when Intellect, the trade organisation that represents UK radio receiver manufacturers, wrote to Parliament in February 2010 and stated: “Whilst it is technically feasible, there are currently no products on the market that can adapt an analogue radio to receive DAB signals.”

Subsequently, Laurence Harrison of Intellect presented evidence in person on this issue to the Lords’ Communications Committee: “A converter would have to include within it pretty much all the components, bar the speakers, of a standard digital radio anyway. Therefore, the cost differential for a converter will be minimal between that and just buying a new digital radio.”

The converter is a prime example of the radio industry’s current pre-occupation with technology being the answer to its problems. Last week, Steve Orchard (former group programme director of GWR, former operations director of GCap) wrote an opinion piece which proclaimed: “DAB is vital to commercial radio’s future.” What?? Sorry?? Surely, it is ‘content’ which is vital to the future of commercial radio, just as it always has been, and just as it always will be. Content = listening = advertising = revenues = profit. Whereas: DAB = platform = infrastructure = investment = risk.

The radio industry desperately needs a strategy that focuses on producing content, rather than focusing on DAB. We already have platform businesses such as Arqiva whose function is transmission infrastructure such as DAB and FM; and we already have consumer electronics companies that produce radio receiver hardware. I don’t see Arqiva or Roberts trying to produce radio shows, so why does the radio industry so desperately want to control platforms and invent hardware?

As ever, the challenge for the radio industry is to create content that is sufficiently compelling, regardless of the platform. Consumers gravitate to content, whatever platform that content is on. The history of radio has demonstrated this time and time again. For example:

• 90% of the population listen to analogue radio for around 20 hours per week (on FM and AM platforms that the radio industry has lobbied to have shut down)
• BBC Five Live and TalkSport attract 5% and 2% shares respectively of all radio listening, despite being broadcast on AM (a platform that commercial radio lobbied the regulator in the 2000s to write off for mainstream formats)
• Pirate radio with poor FM reception continues to attract significant audiences in cities (stations which the radio industry has long lobbied to be shut down, despite itself not offering consumers any comparable content)
• Atlantic 252 attracted a 4% share of all UK radio listening in 1994, despite broadcasting from Ireland on Long Wave (a platform the BBC tried to shut down in 1992)
• Ricky Gervais’ radio show remains the most downloaded podcast ever, despite never having been broadcast and only ever having been made available as an online download (a platform largely ignored by commercial radio).

Sometimes, it seems that parts of the radio industry have stumbled so far away from their core product, content, that the eventual outcome might even be (to adapt Steve Orchard’s comment): ‘DAB is a vital part of commercial radio’s death’. The sector’s profitability is already zero. This is no time for distractions that will not directly put bums on seats.

The quotes below offer more detail on recent dialogue concerning the mythical DAB adapter.
....................................................

“For customers who don’t want to buy a new radio set, it will be possible to convert existing sets to digital instead. An adaptor device will come onto the market soon that will cost around £50 and, in time, conversion may cost less than a new radio set.”
Digital Radio UK
2 December 2009
…................................................

House of Lords
Select Committee on Communications
20 January 2010

Witnesses:
Ford Ennals, Chief Executive, Digital Radio UK
Barry Cox, Chairman, Digital Radio Working Group

Lord Gordon of Strathblane: There is, I might suggest, a vital difference. It is comparatively easy and cheap to convert a television set to digital with a set-top box that you can buy from Tesco for £20. Can you do that to an analogue radio set?

Mr Ennals: I fully expect that there will be low-cost converters available. We were talking to companies which were making these last week, and they are talking about DAB adaptors for about £20 or £25. When the DTT Freeview development started, those products were costing over £100. The market will become more competitive, prices will come down. You can replace your radio for £25 with a digital radio. There will be a burden of cost on the consumer, but it is significantly more affordable than it would have been in the past.

Lord Gordon of Strathblane: If it is as cheap to buy a new digital set as it is to buy a converter, there is a fair disposal problem involved in 50 to 100 million radio sets that are good to go to the rubbish dump.

Mr Cox: There is undoubtedly a difference with television because you can keep your old set and put the adaptor on it. I heard what Ford was saying, and it would be useful if some adaptors come on the market, but the likelihood is that many of those analogue sets will have to be disposed of.
…................................................

Intellect [UK trade association for the electronics industries]
Written evidence to the House of Lords Communications Committee
1 February 2010

“Converting analogue radios to digital:
Whilst it is technically feasible, there are currently no products on the market that can adapt an analogue radio to receive DAB signals. Our members would undoubtedly produce such devices should a clear market demand ensue following the passing of the Digital Economy Bill.
However, simply adapting an analogue product will not allow listeners to enjoy the full range of benefits that DAB can offer. With some entry level digital radio receivers costing as little as £25, adapter devices are likely to cost more than digital receivers at the start.
…................................................

House of Lords
Select Committee on Communications
24 February

Witness:
Laurence Harrison, Director, Consumer Electronics, Intellect

Lord Gordon of Strathblane: What about converters for what are known as ‘kitchen’ sets? [….]

Mr Harrison: Converters – if you like, a set-top box for an analogue radio – are technically possible. I think we need to look at just how appealing that would be for the listener. A converter would have to include within it pretty much all the components, bar the speakers, of a standard digital radio anyway. Therefore, the cost differential for a converter will be minimal between that and just buying a new digital radio.

Lord Gordon of Strathblane: So they are not going to fly off the shelves?

Mr Harrison: It will depend on just how much the individual values their analogue set. Of course, converters would also come into play if you are talking about, for example, a large expensive hi-fi system; they would work for that, and if you like the sound quality of that hi-fi then a converter may be an option, but I do think we need to be careful, purely because we know that the price differential, for example, will not be that great between a converter and a standard digital set.

Lord Gordon of Strathblane: So for big, stand-alone hi-fi sets with colossal speakers and everything else it might make sense but for the small ‘kitchen’ portable a no no?

Mr Harrison: We know that some manufacturers are looking at the possibility of introducing a converter, so it may well be that some of those do come to market. I just think for the context we need to be aware of what that converter will look like, and how appealing it may be. I think your assessment is correct.

[…]

Lord Maxton: There is a major difference; with your existing television all you need is a box.

Mr Harrison: Indeed.

Lord Maxton: A converter, basically. With radios that is not the case.

Mr Harrison: That is true.

Lord Maxton: You do not have to get rid of the televisions but you do have to get rid of the radios.

Mr Harrison: That is absolutely true. All I would say on TVs – you are absolutely right and I do not want to downplay the situation at all ……

Saturday, 6 March 2010

Lord Fowler: “There will be a public outcry if we get the radio digital switchover wrong. There could be a very big row indeed about this.”

The Digital Economy Bill was debated in the House of Lords this week in its ‘Report Stage’. Once again, amendments that had been proposed specifically to take into account the views of listeners and small radio stations were rejected by the government. As it stands, the Bill only requires Ofcom and the BBC to be consulted before the government can take a decision about switchover from analogue to DAB radio.

Parallel with the progress of the Bill through the House, Lord Fowler has been chairing a separate Select Committee on Communications inquiry into digital switchover. Through its weekly meetings, where it has collected copious evidence from witnesses, it must be becoming increasingly obvious to the Committee that the government plan for digital radio switchover is an undignified mess. Lord Fowler’s growing displeasure with this situation surfaced during Debate of the Bill:

“I do not intend to pre-empt our [Committee] report, but I must say that it is generally a very important issue with the public and that there will be a public outcry if we get the radio digital switchover wrong. There could be a very big row indeed about this. …. I think I probably speak for the committee when I say that there is public confusion at the moment about what exactly the plans mean to the individual consumer, and I cannot believe that that is a sensible way of proceeding.”

The government’s frosty response, delivered by Lord Davies, conveys everything:

“[Lord Fowler] told me, as if I did not know, that there could be the most enormous row if this switchover went wrong.”

The government simply refuses to listen to commonsense on this issue, even from the chairman of the Lords Communications Committee. As a result, a “very big row” about digital radio switchover is indeed inevitable, probably at Easter, and more so following publication of the BBC Strategy Review.

Here is the ‘radio’ part of the debate in full:

The House of Lords
Parliamentary Debate
3 March 2010

Digital Economy Bill
Clause 30 : Digital [radio] switchover

Amendment 137
Clause 30, page 36, line 33, after “to” insert —
“(a) ”

Amendment 138
Page 36, line 35, at end insert —
"( ) the needs of local and community radio stations; and
( ) the needs of analogue radio listeners"

Lord Howard of Rising: My Lords, I tabled Amendments 137 and 138 again simply to get more detail from the Minister, as his assurances about these points were not wholly convincing. The amendments would give the Government an explicit requirement to take into account the views of radio listeners and local and community stations. The Minister argued that this was unnecessary because of the breadth of the requirements to consult that are already proposed and the commitment to consult widely. The problem with such vague assurances is that they can be quickly forgotten. The [Bill] currently states that the views of the BBC and Ofcom should be given due regard before the Secretary of State nominates a date for the digital switchover. It does not say too much about consulting widely or taking into account in any way those who are most affected by the switchover — the listeners. I hope the Minister can give more encouragement that the listener will not be forgotten in this whole process. I beg to move.

Lord Clement-Jones: My Lords, I commend the amendments, which are a very constructive way of seeking further assurance from the Minister. Indeed, they very much reflect the concerns that I expressed from these Benches in the Clause 30 stand part debate in Committee. Assurances about the future of analogue radio in particular are so important. The noble Lord, Lord Young, and I engaged in a slightly semantic conversation about whether FM’s existence would be perpetual or whether it would simply be there for the long term. I think the assurances were that it would be there for the long term, which did provide some reassurance. However, the interests of the ultra-local stations and the consumers of the product of those stations are extremely important, and I very much hope that the Minister can cast more light on the future of analogue in the face of the digital switchover.

Lord Fowler: My Lords, I congratulate my noble friend on the amendment — I am now rowing back frantically — on a very important issue. It is so important, in fact, that the Select Committee on Communications is currently engaged in an inquiry on precisely this — the digital switchover — although a number of reasons have been adduced as to why it should be called not a switchover but various other names. I do not intend to pre-empt our report, but I must say that it is generally a very important issue with the public and that there will be a public outcry if we get the radio digital switchover wrong. There could be a very big row indeed about this. My only reservation about the amendments is that I can think of quite a number of other issues on which I would like the Government’s assurance. There are, for example, 20 million car radios out there. What will happen to those? How will they be converted? What are the plans? There are so many issues here that either we will have a totally comprehensive list or we will simply have to ask the Minister at this stage for his current views. I think I probably speak for the committee when I say that there is public confusion at the moment about what exactly the plans mean to the individual consumer, and I cannot believe that that is a sensible way of proceeding. My noble friends on the Front Bench have raised a crucial issue to which we will have to return again, and very soon.

Baroness Howe of Idlicote: My Lords, I absolutely agree with what has been said so far. This is one of the greatest eye-openers. As we have proceeded with this Bill — particularly as it has run parallel to the deliberations of the Select Committee which the noble Lord, Lord Fowler, is chairing so ably — we have come to realise just how important radio is to so many people, whether to the disabled or to all of us, listening as we do for a vast amount of our time to the radio. However, this is clearly one of the areas in which there is still a need to reassure people locally. The idea was that analogue transmission could be switched off once 50 per cent of listening is to digital radio. Then there was the business of how long FM would be available once it is more or less accepted that there will be a change. As regards the production and selling of cars, the issue is when there will be sufficient technology to convert radios already in cars and to convert some DAB radios to the right level. No one is trying to argue for a moment that the quality of digital radio will not be valued. But getting to that point will need a lot of reassurance to citizens. I would be grateful, as would I am sure other noble Lords, for further reassurance from the Minister that FM will be available ad infinitum, but certainly well beyond the point of switchover. That would do a great deal to reassure noble Lords who have looked into all this. But much more importantly, the citizens and the consumers — I come back to them because I am looking at this issue from both viewpoints — are crucial. I hope that the Minister will be able to give that reassurance.

Lord Gordon of Strathblane: My Lords, I do not have any problem with the sentiments behind the amendments. The only problem is that if those points are listed, it would look as though that is what the Government or Ofcom should give priority to, but they are only three of a myriad number of conditions to which they must give attention. Specifying that is almost counterproductive.

The Lord Bishop of Manchester: My Lords, I rather echo that point. In Committee, I expressed, as did many noble Lords, concerns about local and community radio stations and about the extension of FM. These are very important matters, but as other noble Lords have indicated in this short debate, there are other areas as well. In all this, I hope that we will continue to recognise that, while it has often been said that the switchover for television has gone very smoothly, the complexities in relation to radio are far greater. While supporting so much that lies behind these amendments, it would be a great shame, in a sense, to wreck it by omitting rather than being inclusive.

Lord Davies of Oldham: My Lords, I am grateful to all noble Lords who have spoken in this short debate, particularly the right reverend Prelate the Bishop of Manchester and my noble friend Lord Gordon, for identifying the weaknesses of the amendment and the nature of the issue on which the Government need to take care. Perhaps I might say that if I was not going to take care after the Opposition Front Bench and the noble Lord, Lord Clement-Jones, had spoken in support of the amendment, I certainly was after listening to the noble Lord, Lord Fowler. First, he told me, as if I did not know, that there could be the most enormous row if this switchover went wrong. I could not agree with him more and I accept entirely what the right reverend Prelate has said. The switchover from analogue to digital for television is much easier than this exercise because of the diversity of radio opportunities and provision. But the noble Lord, Lord Fowler, produced an even greater anxiety for me when he mentioned car owners. He is right that we would not dare to get that wrong. I know that we are not far from a general election, but the idea that the Government are about to alienate 20 million car owners by telling them that their radios are defunct, out of date and will not work is somewhat unrealistic. The conversion of car radios is an important point that has to be established before a digital switchover could conceivably be considered a success. We have been clear that an affordable in-car converter is key to the success of digital radio switchover. There are already devices on the market which will convert an FM car receiver to receive DAB. One would predict that this market will expand very rapidly. Very few markets move quite as quickly as the car accessories market, which helps to guarantee the sale of cars. That point therefore will be taken into account, as will the other points about the importance for the Government of effective consultation before such a switchover could take place. We have made clear that, for the foreseeable future, the Government will consider FM radios to be part of the broadcasting firmament. Radio stations will want to combine to broadcast on FM to take account of the points that the right reverend Prelate drew to the attention of the House. What date will all this be effected? That is a pointed and precise, but nevertheless very difficult, question. We have indicated that 2015 is ambitious, although it is achievable. If we do not set a target, there is no stimulus to all those who can make a contribution to effecting this successfully to get to work and do so. So we want a date and have identified 2015, but we recognise that it is a challenge. However, we accept the concept behind the amendments; namely, that the fullest consultation will be necessary. Otherwise, the almighty row anticipated by the noble Lord, Lord Fowler, will descend upon the Government who get it wrong. Why do I resist the amendments, as we did in Committee? It is simply because consultation is written into the Bill already. We could not dream of going forward or of proposing that the Government could go forward with an issue of such significance to our people without the fullest consultation in order to guarantee that we do not fall into those dreadful traps to which noble Lords have called attention. Again, I am grateful to the Opposition Front Bench for drawing our attention to the necessity for care and consultation. That is part of the Bill and the amendments are unnecessary. Having stimulated a further debate, after the extensive one we had in Committee, I hope that the noble Lord will withdraw his amendment.

Baroness Howe of Idlicote: My Lords, can the Minister clarify the point about which a lot of people are concerned; namely, that whenever the point of switchover occurs, FM will continue beyond that point? A lot of small operators are very concerned about that.

Lord Davies of Oldham: My Lords, I wanted to indicate that. If I did not make it clear enough in my reply, we see FM continuing, but we also see the kind of criteria that will be necessary before we begin the process of significant switchover. As I have indicated, the Government will move with the greatest care with regard to this issue, as we have with television switchover. Noble Lords will know of the care that we have taken to make sure that groups who might not be able to make that switchover effectively because of limited resources are given support. Radio is much more complex and difficult, as the right reverend Prelate made clear. The Government are fully seized of that, which is why consultation is written into the Bill on this issue.

Lord Howard of Rising: I thank the Minister for his comments, and I thank my noble friend Lord Fowler for his support. I was delighted to hear some support from the noble Lord, Lord Clement-Jones, after the sandbagging that I received from the noble Baroness, Lady Bonham-Carter. Having raised the issue and heard how sympathetic the Minister is to the potential problems — even though he dodged with his customary skill committing himself specifically to consulting listeners — I beg leave to withdraw the amendment.

Amendment 137 withdrawn.
Amendment 138 not moved.

[the Report Stage of the Digital Economy Bill continues in the House of Lords on 8 March 2010]

Wednesday, 3 March 2010

DAB radio receiver sales: never let facts get in the way of a big number

A newsletter arrived in my in-box today from Digital Radio UK, the new organisation charged with making DAB radio a success. It told me some startling news:

“By the end of 2009, when buying a radio, more than three quarters of people chose a digital one.”

And, just in case I did not believe this fact, immediately beneath, it told me the same thing again:

“New sales figures reveal that, when buying a radio, more than 75% of people choose a digital one.”

I did not believe it. All the previous data from the radio industry had shown that DAB radios are around 22% of total radio sales, as demonstrated in the graph below.


A year ago, the government’s Digital Radio Working Group had set an ‘aspirational’ target for DAB radios to be 50% of total radios sold by the beginning of 2011. As this graph clearly shows, the odds of successfully coming anywhere close to that target are zero.

Maybe something revolutionary had happened in the consumer market for the proportion of DAB radios sold to have suddenly surged from 22% in Q1 of 2009 to 75% by year-end. It was extremely puzzling.

Then I read an extraordinary letter that Ford Ennals, chief executive of Digital Radio UK, had written to the House of Lords Select Committee on Communications on 15 February 2010. It said in part:

“I thought […] that it might be useful if I wrote with the very latest radio sales data. Encouragingly, it shows that, during 2009, consumers increasingly chose digital sets over analogue ones.

I thought it clearest to present the data in a simple table, which is attached, but it may be useful if I explain a couple of the terms used. Where the data refers to ‘kitchen radios’ it means the kind of sets that you and I would call ‘a radio’ i.e. a set whose sole function is to listen to the radio.

Where it refers to ‘all radios’, these figures include those pieces of electrical equipment which happen to have a radio chip in them (e.g. a hi-fi where the main reason for purchase may be to listen to CDs or an MP3 player where listening to downloaded music is the primary function).

As you can see, by Christmas 2009, 76% of people buying ‘a radio’ chose a digital one…... [emphasis added]”

Aha! Now I think I understand. The only way in which it is possible to contrive that more than three quarters of radios sold are digital radios is to arbitrarily create a completely new definition of ‘radio’. In this brave new world, only a ‘kitchen radio’ will now be called a ‘radio’. (The truth is: 76% of people who purchased a kitchen radio during December 2009 bought a digital radio, though the proportion for the whole of 2009 was 63%.) Every other type of radio is no longer defined as a radio. This new definition of ‘radio’ would completely exclude:
     • Micro systems
     • Clock radios
     • Tuner separates
     • Handhelds
     • Boomboxes
     • In-car radios
     • Audiovisual systems
     • Home cinemas
     • Docking stations
     • Dect phones [?]
     • Mobile phones
     • LCD TVs
     • Record players

This seems like a long list of products which, if they also happen to include a radio, will no longer be defined as having a ‘radio’. How can a ‘clock radio’ not be a radio? How can a ‘tuner’ not be a radio? I know this long list to be a comprehensive definition of ‘radio’ because it was the very definition of ‘radio’ used by the Digital Radio Development Bureau, the forerunner to Digital Radio UK, in its published data. Of course, that was last year. In 2010, ‘radio’ seems now to have a whole new definition.

What can I say? However desperate you might be to try and make DAB radio a success, how is it justifiable to deliberately mis-state data so outrageously in print? And to Parliament?