The planned migration of radio broadcasting from analogue to digital platforms in the UK currently sits on a knife-edge. After a decade of existence, the DAB platform is still struggling. Only 9.2% of commercial radio hours listened are via DAB [RAJAR Q3 2008]; while 79% of new radios sold in the UK are still old-fashioned analogue rather than DAB [DRDB/GfK Q2 2008 four-quarter moving average]. The financial pressures on commercial radio owners are already immense, and the burden of continuing to simulcast on both analogue and digital terrestrial transmitters cannot be borne much longer. When I wrote about this dire situation in October, I noted that “Ofcom [is] threatening to revoke the analogue licence of any [simulcasting] station giving up on DAB” and I asserted that the regulator’s “once carrot-and-stick approach to digital regulation now looks like a hostage situation.” If stations who had accepted an automatic analogue licence renewal are still forced to continue simulcasting on DAB (some at a cost of many times their analogue transmission) by the regulator, many will simply go out of business.
My attention was drawn this morning [thanks, Daniel] to a speech made by Ofcom’s Director of Radio, Peter Davies, at the recent Voice of the Listener & Viewer Conference in London, as quoted in The Radio Magazine (headline: “Ofcom: Hundreds more DAB transmitters needed”):
However, the costs of such a DAB build-out programme are significant. The BBC’s existing single national DAB multiplex network of 96 transmitters covering 86% of the population costs £6m per annum. To extend that multiplex to 230 transmitters covering 90% of the population would cost an additional £5m per annum. To extend the existing multiplex to the 1,000 transmitters necessary to cover 99% of the population would cost an additional £34m per annum. Now remember that the BBC only has one single national DAB network, whereas the commercial radio sector has one national DAB network, plus a separate layer of local DAB multiplexes that cover most of the UK, plus a further layer of regional DAB multiplexes in the most populous areas. Now imagine what the costs to the commercial sector might be to extend and improve coverage in all these areas.
Although Peter was talking explicitly about the BBC situation, the implication is that the commercial sector too should invest even further in DAB transmission infrastructure, and yet Ofcom must be aware that station owners can barely afford the present network of DAB multiplexes that already cover 90% of the population. It might appear that Ofcom is pre-occupied with burdening the commercial radio sector with even more transmission costs, at a time when the industry is already fighting for its life as a result of falling audiences and declining revenues (even before the advertising downturn).
I am reminded of Peter’s speech about DAB to The Radio Festival in July 2008:
Undoubtedly, these are all important DAB technical issues that (belatedly) demand attention. However, in the grand scheme of things, with the commercial radio sector poised on a precipice of viability, how exactly will this work by Ofcom do anything but add to the sector’s existing financial problems?
[PS: Just a reminder that Ofcom’s own research in 2007 found that 50% of UK commercial radio licensees either made a loss or an annual profit of less than £100,000.]