dab digital radio radio

Core – A DAB Digital Radio Paradox

Core Mug

It was with a bit of a heavy heart that I said “so long (and thanks for all the fish)” to Core last night. The fresh hits station that I launched on 15th November 1999 finally fell silent at midnight. It’s always depressing when a radio brand is outlived by its mugs, stickers and headed notepaper.

Core was intended to be commercial radio’s response to Radio 1 – talking to late teenagers/early twentysomethings entering a more sophisticated and independent phase of their life, but still enjoying fresh hit music pumped out with enthusiasm and energy.

But Core never fulfilled its potential, falling victim to a paradox that looms over any attempt to modernise and evolve radio for the digital media world.

DAB Digital Radio in the UK only really got going towards the end of the later 1990’s when commercial radio committed substantial investment to building networks and starting new radio brands. The confidence to make those bold commitments was fuelled by an unparalleled boom in commercial radio revenues, and radio’s arrival as a darling of the advertising market. Talk of 6% shares of display advertising abounded, and moving to digital would allow commercial radio to compete against the BBC on terms apparently tilted in its favour.

But the very environment that provided the confidence to start digital was also an environment without fear, and without the imperative for change. Simply owning spectrum and putting out cookie-cutter replicas of analogue radio stations and analogue radio sets met the crude targets of “successful digital”. Without the fear of extinction, evolution was never a high item on the agenda, and ideas to move digital stations to something genuinely plugged into peoples’ digital lives just seemed like unnecessary expense and hassle.

Now the tide has turned, and the radio industry is hurting. As predictions of the threat from on-line began to come true, the money that was needed to fund the evolution of radio simply drained away. Commercial Radio frittered away the rich years by not investing enough in digital product evolution. A vast proportion (95%+) of the money allocated to digital was sucked into appalling infrastructure contracts, which are wholly unwarranted, and do not stand up to close inspection. Those costs became the headlines, and endanger the short-term prospects for the platform. They also took valuable cash away from the product evolution which would ultimately have created new value in radio.

As is often the case, the radio industry now faces having to evolve and re-invent itself at the beginning of a wider economic downturn where money is tight, and pressures to cut costs are enormous. As the time horizons for investment returns get shorter, in part driven by the apparent liquidity that private equity offers, the prospects for evolution are not great.

In the UK at least, the hard times for digital are now. There needs to be a wholesale change in the infrastructure cost of digital to ensure its short-term survival and to put it on a sensible economic footing for the future. If the costs of infrastructure can be realigned to reality, it will remove many of the barriers to genuine new entrants to the market, and to true evolution of the radio product. But once those barriers have been removed, it needs a hearts and minds commitment from the radio industry to create something new, something relevant in today’s media environment that can really exploit the tremendous opportunity that free, mobile, cost-effective, digital broadcast spectrum could bring.

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