Is DAB radio bold and busted or still all to come?

by Richard Eyre, Media Week 19-Feb-08

Ten years ago, British commercial radio operators embraced Digital Audio Broadcasting. They were enchanted by the opportunity to do radio sans frontieres, to invent new radio stations with the same ease as the Americans and to change their formats with the same freedom as the BBC.

By signing up, they also got a free pass on licence reapplications for their analogue stations. When you have to write a 120-page repitch just to stay in business, with your rivals trying to convince the regulator that they can outserve your community, the removal of this nightmare is an incentive indeed.

Transmission costs were high, since the providers of these services set out to recoup a high investment in the infrastructure to make it work. Accordingly, operators compressed a larger number of channels into the available spectrum to share costs and broaden choice. The result was that quality was no better than FM to most ears.

So what about all that choice? Well, it appears that most (88%) of listening on the DAB platform is to heritage stations. A decade into DAB, 3.4% of total radio listening is to the new, made-for-digital stations.

Ofcom's approach to these difficult economics was, last year, to take the bold and difficult decision to license a second national digital multiplex.

Hopefully, this will refire the appetite of listeners, but the risk is that the new channels promised on digital two, particularly the attractive and highly cross-promoted C4 channels, could fragment a slow-growing DAB audience faster than they stimulate the purchase of new receivers.

What we need is a silver bullet. Switch off analogue radio. That oughta do it. But hang on, treating radio with TV remedies is bad medicine. There is no radio equivalent of the electronic programme guide or personal video recorder that so profoundly changed the TV viewer's experience, and no premium subscription channels to pay for the distribution of free digital receivers. And no politician is going to switch off 65 million radios.

DAB is not dead. The simulcast heritage stations remain. And some operators report that their digital-only stations are profitable. 4Radio's promised enfant terrible of radio is worth waiting for. But for some of us, the level of commitment is too high for the pace of payback.

- Richard Eyre is chairman of GCap Media, richard.eyre@haymarket.com