GERMANY: government drops FM radio switch-off 2015 date from new legislation

VPRT, the German trade association for commercial media, has welcomed the government’s decision not to include clauses in its new Telecommunications Bill that would have switched off FM radio broadcasts in 2015. In its 9 March 2011 press release, VPRT stated: “FM is and remains the basis for the development of new radio services.”

VPRT described the earlier federal plan to switch off FM radio on 31 December 2015 as a “completely unrealistic statutory requirement” which would have made redundant 300 million FM radio receivers.

Germany is making a second attempt to launch DAB radio with ten national services scheduled to start in August 2011. US broadcaster Radio Disney had been an initial applicant for one of the national commercial DAB radio channels, but subsequently withdrew its proposal in January 2011. Some of the other commercial stations had been offered a financial subsidy by DAB chip manufacturer Frontier Silicon in December 2010 [see my blog].

However, as one German publication commented: “So far, consumer interest in digital radio has been extremely low.” Pit Klein from the magazine ‘Sat+Kabel’ explained: “We have estimated from the regional media authorities that only about 500,000 DAB radio devices are in circulation.” Christoph de Leuw from the magazine ‘Audio Video Foto Bild’ said: “In some areas, [DAB radio] receives only two or three stations. No one buys a new radio receiver for €100 to receive two stations … People are satisfied with FM quality. The real, practical benefits to consumers [of DAB] are yet to be determined.”

Experts in Germany agree that the future of radio is digital. “Whether the digitalisation of radio will take place on DAB is questionable,”
said Sven Hansen, editor of the computer magazine ‘c’t’.

[with thanks to Follow The Media]

GERMANY: DAB “is not financially viable”, internet radio on the rise

“DAB or DAB+, in its current form, is not financially viable for commercial radio stations,” said Stefan Schmitt, managing director of RTL’s Berlin radio stations, in Promedia magazine. He pointed out that user numbers were increasing steadily for the internet, wireless via PC, laptops and smartphones. “Under these circumstances, I do not know where exactly the added value is for DAB,” he said.

Schmitt argued that the whole radio business model is still based on FM broadcasting and will remain so “for the foreseeable future.” He believes that the best alternative to broadcasting is currently ‘online radio’: “We are achieving market penetration [with online] much more rapidly than with DAB, which is not market driven.”

In Germany, a dispute continues to rage over the funding of DAB radio. The CDU party’s media expert Thomas Jarzombek has argued that “more than €200m of public funds were wasted on DAB” and that “these resources should be used for technologies that are well received by the public.”

Negotiations have been proceeding for months over a further €42m of public funds earmarked to be released to re-launch DAB radio nationally using the DAB+ codec, following the failure of the earlier launch using the older DAB codec. Initially, the contracts between transmission provider Media Broadcast and the station owners were meant to have been signed on 22 July 2010. Then, the subsequent 22 September 2010 deadline for negotiations passed without agreement, as a result of commercial radio’s unwillingness to commit financially to broadcasting on DAB+. This deadline has been extended again to 15 December, which experts in Germany
now suspect is “the last chance for DAB+.”

At its annual conference on 12 November 2010, the German association of commercial broadcasters, VPRT, reiterated its opposition to the government forcing the introduction of DAB+ radio upon the German market. Outgoing VPRT vice president Hans-Dieter Hillmoth
said: “The current draft of the new Federal Telecommunications Act ignores the existing interests of commercial radio in the functioning infrastructure, whose core business is FM radio.”

research in Germany by the Frankfurt Link Market & Social Research Institute has demonstrated the increasing popularity of listening to radio via the internet platform. Consumers’ preference for radio delivered to a PC or laptop increased 84% year-on-year, and is now exceeded only by traditional radio hardware – car radios, kitchen radios and stereo systems. Amongst 14-29 year olds, radio via a PC/laptop scored second only to the car radio.

The question put to respondents was: “Radio can now be received on many different types of appliances. Please indicate which appliances you particularly appreciate, regardless of duration of usage.”