Digital radio is “facing a crisis” despite the forthcoming launch of a national commercial multiplex next year, according to outgoing GCap Media chief executive Ralph Bernard.
Bernard, who is stepping down after 25 years as the head of Britain’s biggest commercial radio broadcaster, told Marketing Week that the Government’s failure to set an analogue switchover date was hampering attempts to develop a “business plan that makes sense”.
He also has concerns about the viability of the second multiplex, due to launch next summer, and says that digital radio is about four years behind where it was expected to be.
Although launched in 1998, digital radio services have not had the impact many expected. Just 22% of homes have digital audio broadcasting (DAB) sets, compared to 85% for digital TV.
Trailing behind the ‘tipping point’
The much-vaunted “tipping point” has yet to be reached. Tellingly, for example, DAB radios are not installed in new cars as standard and without a switchover date there is no pressing need for listeners to leave analogue.
The launch of the second national commercial digital multiplex, which will start next summer, is expected to ignite some much-needed interest in digital radio. 4Radio Group, the Channel 4-led consortium that won the licence, is promising services that are not currently available, including stations from Channel 4 and Sky.
Bernard, a long-term supporter of digital radio, fought against the launch of the second digital multiplex, not least because the Government had originally said there would be only one and GCap is the major stakeholder. But the wider industry disagreed, believing that it might give digital some momentum.
Jonathan Barrowman, head of radio at Initiative, says/ “The consortium [behind the new multiplex] has arguably been more innovative in the marketing and positioning of digital radio than GCap has been over the past three years or so.”
Howard Bareham, investment director for radio at MindShare, agrees but adds: “It is still a little way off, and people aren’t going to simply wake up that day and think they should be advertising on digital radio.”
Radio stations should follow the lead of TV and use digital to add to their service, believes Bareham. He adds that the “jukebox” model has not helped digital radio’s image so it should now concentrate on adding new dimensions such as using red button technology.
The arrival of Sky News and Channel 4 in the market will also benefit digital radio as they will be able to cross-promote and take on the BBC at a national level.
Making headway, but slowly
Mandy Green, head of communications at the Digital Radio Development Bureau, says that digital has struggled across commercial radio, although she adds that things are now improving.
She says: “Broadcasters need to find a way to monetise the technology, and consumers want to see innovative formats to entice them into digital radio.”
But, she points out, broadcasters cannot overcome the barriers to growth alone. “We cannot solve the in-car issue ourselves but we do expect to sell a million DAB radio sets this Christmas.”
And while DAB may not have taken off as hoped, Barrowman says that digital has been penetrating the market, albeit by stealth.
“When they switch off the analogue TV signal, every home with a TV will be digital radio-enabled,” he points out. Anyone accessing the internet can also access digital radio, and it is increasingly being incorporated into hard disc players.
DAB may be lagging but the digital framework is there, and once it is exploited properly the tipping point should finally be reached.