UK radio operators have lost faith in digital audio broadcasting (DAB). The platform has been hit by a series of blows, from Fru Hazlitt’s decision to reduce GCap costs by pulling out of the medium to Channel 4’s scrapping its plans to launch any stations.
But creeping doubts about the future of the platform which some fear is in danger of being surpassed by new media such as broadband services have yet to affect audience growth.
Rajar figures for the third quarter, announced last week, show digital listening accounts for 18.7% of all radio listening with DAB accounting for 11.3% of that. Digital listening has a weekly reach of 31.4% and, again, DAB accounts for 17.8% of this compared to 10.7% for listening through digital TV and 6.2% for listening via the internet.
Listening hours have also grown 23%, from 153 million for the same period last year to 188 million. Of that, DAB accounts for 114 million hours, up by 31% from 87 million. Finally, and crucially, the number of homes with DAB radios has grown to 28.7%, from 21.7% in the third quarter of 2007.
While these figures are positive, DAB has failed to ignite significant consumer interest. Ralph Bernard, the former chief executive of GCap Media and long-term supporter of DAB, suggested the Government must set a date for analogue switch-off before the industry can form a “business plan that makes sense” (MW.co.uk November 26), but others say commercial operators should take some blame for the platform’s failures.
One source points out that commercial operators have failed to cross-promote their DAB-only stations because migrating a listener to DAB loses operators money as it is a loss to the analogue station.
Jonathan Barrowman, head of radio at Initiative, points out that TV operators are given a discount on the cost of the digital platform for migrating viewers over, but in radio it is the reverse.
There is also criticism that radio groups failed to sell the platform properly in the early days. “There was a lack of active or structured sales for DAB,” explains Barrowman.
But the key problem, most industry experts agree, is the dire lack of quality content. While the BBC is understood to be spending £38.1m a year on content for its five stations, commercial digital-only stations have been little more than jukeboxes or simulcasts of analogue stations. Barrowman adds: “There isn’t any new content for consumers or for advertisers to find niches. No new stations means no new audiences and you can’t monetise that.”
Grant Goddard, radio analyst at Enders Analysis, adds that while commercial radio is partially to blame, the Government is also at fault for forcing radio to go digital in the first place. Meanwhile, Ofcom has pressed ahead with plans to award the licence for the second multiplex despite knowing that DAB was in a precarious position. He says: “The Government, the regulator and the operators have all contributed to this situation, it makes it difficult to untangle the mess.”
The Digital Working Group, set up by the Department of Culture, Media and Sport, is understood to have met at the end of last week and there is little doubt that the gaping hole left by Channel 4 was top of its agenda.
While many feel now is the time for the Government to “play a role” in the future of DAB, the next significant move is expected to come from Global Group, the majority stakeholder in Digital One. With Channel 4’s situation decided, Global Group chief executive Ashley Tabor is tipped to make a decision soon.
As Goddard says: “If you look at in a cold commercial way, you’d chop it tomorrow.”
See Channel 4, page 20