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dab digital radio

DAB, DAB+ and the Economics of Digital Radio

The Digital Radio Show in London (Monday 11th and Tuesday 12th June 2007) brought together a reasonably stellar line-up of speakers from the global digital radio industry to discuss the issues of the day.

Unfortunately I missed the Monday sessions (largely due to filming some footage for an upcoming series of shorts on DAB+), but by all accounts there was some exposure of some of the clouds on the digital radio horizon. It’s a sign of a confident digital radio industry to be able to accept that not everything is perfect, and maybe some tweaking around the edges might be appropriate as we head towards the second decade of DAB Digital Radio in the UK.

Despite an excellent presentation by James Cridland (who’s clearly been reading through Presentation Zen) on visualising radio, and a slightly strange (but awfully enthusiastic) presentation by Yves Maitre of Orange about their WiFi radio device (liveradio), Tuesday was dominated by the presentation and discussion of DAB+.

The DAB+ panel was organised by WorldDAB, and comprehensively covered the benefits and technical details of DAB+. I must admit to being slightly apprehensive (ok, really very nervous) of chairing the panel discussion at the end, because it would be difficult for any discussion about DAB+ to avoid talking about the issue of migrating from DAB to DAB+. That’s an issue that can arouse immense passion in some commentators (along with audio quality), who believe that the UK is being sold down the river on the issue of DAB+.

Colin Crawford of PURE was eloquent on the cost implications of DAB+; DAB+ receivers will be more expensive (and he cited the exact costs of the incremental technologies, including the rather disappointing exposure of SBR costing an additional €0.15 – €0.20 per unit, onto top of the already slightly costly €1.60 for the core aac functionality). Of course, not only will DAB+ receivers be more expensive, he also pointed out that the manufacturers who create the receivers at the very lowest price points are those least likely (or able) to produce DAB+ receivers at the same prices. Colin and I have an ongoing, and totally friendly, disagreement on the subject of colour displays on DAB(+) radios, but I can’t argue with his assessment of the economics, from a receiver manufacturers point of view, of DAB+.

Les Sabel and Steve Evans represented the silicon manufacturers. I’ve never ever heard a silicon manufacturer say that something can’t be done, and Les and Steve didn’t disappoint the crowd by confirming that DAB+ was a tweak here and there, and fundementally applicable to all receivers built on contemporary silicon. Frank Herrmann reiterated that DAB and DAB+ can co-exist on the same multiplex, and that the cost of changing a network from DAB to DAB+ is pretty minimal, and could even improve coverage a shade.

So far so good, and time for me to ask the question. How do you get from DAB to DAB+? Not unexpectedly, there was a slightly uncomfortable pause. None of the panellists was a broadcaster with 5m receivers in the market, and a fledging DAB industry that still needs some care to tend it. The general consensus was that a change from DAB to DAB+ isn’t a technical problem, and it’s not directly a financial problem for broadcasters or multiplex manufacturers or receiver manufacturers. However, it has a profound effect on confidence amongst consumers who believe that they bought a future-proof radio with decades of life in it, and could refuse to reinvest in a DAB+ set so soon after buying a DAB radio that now lay silent. That’s where the economics of the radio industry is sharply impacted by the economics of the household – how much are people prepared to pay to buy new radio receivers? How long will it take to re-educate consumers that radios now have a shelf-life comparable with MP3 players and mobile phones? (Or is it even desirable?).

The conclusion, incidentally, was that any transfer needed to be gradual. Existing DAB services might be supplemented with new DAB+ services which might be a carrot to buying a new receiver. DAB radios in shops would gradually and quietly be replaced by DAB+ (or DAB+ ready) radios, but it’s still going to be a number of years before DAB+ receivers outnumber DAB receivers. Maybe even a phased reduction of DAB audio quality might be the catalyst to moving people to DAB+ receivers, although based on experience so far audio quality isn’t much of a motivator for consumers at all. No UK broadcaster can afford to dump all 5m receivers, and the listeners that use them, and go back to square one and hope to goodness that the same people go out and buy another 5m DAB+ receivers.

So we leave it to Australia and Switzerland and Malta and others to lead the way on DAB+, and wait for the conditions in the UK to become more favourable to re-open the discussion about a change. Until then, you’ll still be able to buy a DAB Digital Radio in Argos for under £30, a point that went down awfully well with a delegation of Austrians I was hosting at the weekend. Prosit, as they say in Austria.

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