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The iPhone helps revolutionise DAB Digital Radio

95.8 Capital FM iPhone Application

95.8 Capital FM iPhone Application

My joining GWR Group coincided with an explosion in the use of music research to decide what songs got played, and how often. The data drove a new format – the “Better Music Mix” that rolled across Southern England in the mid and late 90’s. Hundreds of listeners were surveyed every week to track their changing interests on a track-by-track basis.

Despite that intensive process, there was one thing research couldn’t do. It couldn’t tell you if a new song was going to be a hit with the audience or not. Only after people were familiar with a song could they give you an opinion – virtually all new songs scored badly, simply because they were unfamiliar. The only way to see if a song was popular or not was to take an informed decision, use a bit of “gut feel” and start playing it – albeit gently at first. After about 6 weeks of exposure (assuming a few other stations were also playing it), and you’d start to see the opinions form and polarise, and you could decide to bin it or stick with it.

That experience from the analogue world is equally applicable digitally.

A lot of Digital Radio’s attributes are simply extensions of analogue radio; more stations, improved sound quality, better reception, easier to tune. They all address familiar radio functionality that listeners have found wanting in analogue. It’s not surprising, then, that these are the messages that have most impact with listeners when they’re thinking about reasons to go digital. And in turn, these become the headline messages of a marketing campaign for digital radio.

It’s interesting to compare the motivators people have for purchasing a digital radio with the attributes they say they most value having bought one. Pre-purchase, the concept of text information scores virtually nowhere – nobody buys a Digital Radio to get text information, and it seems to be an utterly valueless attribute. However, post-purchase, it soars to be one of the top five things that people love about their Digital Radios. Before they experience it, they can’t understand it, and so can’t value it. It only takes a short experience to get the benefit, and, even more interestingly, for it to become a differentiating factor between radio stations. Shortly after the launch of Core, research showed that listeners loved the real-time text information on the display, and absolutely slated Radio 1 for not doing the same. (Annoyingly, the BBC fixed that far faster than we expected them to).

We were lucky that text was a de-facto inclusion on almost all digital radio devices, even if the implementation is pretty ropey, on poor displays. (If anyone can show me a DAB Digital Radio that implements the “Clear Message” command in DLS, I’ll be amazed).

The problem is that we need to go further in using Digital Radio to create new functionality and better differentiation between analogue and digital, and between digital and on-line streaming services. And a further problem is that our audience won’t understand what the heck we’re on about until we show them.

I did a demo to the GWR Board in ’98/’99 (along with Dirk Anthony) of our concept for a classic rock radio station called C-Rock (yes, ha ha). The demo consisted of an audio CD, brilliantly imaged by Scott Muller, and a series of HTML 3.0 webpages, which advanced using HTTP META REFRESH tags (this was the 90’s – AJAX was still a bathroom cleaner). It demo’ed our vision of what Digital Radio should be like – a fusion of audio and images. Of course the audio bit of that demo became Planet Rock, and very successful it is too.

But the visual bit of that got stuck for a decade. Listeners couldn’t understand it, so manufacturers wouldn’t build colour screen radios, so multiplex operators wouldn’t allocate capacity for it, and sales teams wouldn’t even consider selling it. Log jam.

Then the Apple iPhone changed that completely.

Quite unexpectedly, the iPhone has provided the catalyst to get visual radio taken seriously. It could (should) have been Nokia Visual Radio, 5 years earlier, but NVR was so horribly badly implemented, it never got any traction. (There’s a moral in there for Nokia, I’m sure). But it’s been the iPhone, and its colour screen that have provided a trial environment for visualised radio, and the feedback from listeners is overwhelmingly positive.

The Global Radio iPhone Apps aren’t the only radio apps that support visuals (although clearly, they’re the best). There’s Absolute Radio’s iAmp, TuneKast and the now last.fm has announced that they’re visualising their player as well. Collectively they’re providing data on listener appreciation (high) and the volumes of visuals delivered, which in turn sizes the commercial opportunity.

I find it ironic that Apple, having kept radio out of the iPhone, has inadvertently provided our best research source yet into a truly innovative change to radio, and one that our listeners could not possibly have understood or valued without experiencing it. Now the initiative lies with the radio industry to implement it and promote it before that innovation gets stolen by the on-line streamers.

Googling the future of Digital Radio

A number of articles and blogs have drawn attention to the ability of Google searches to provide early indications of change. Google announced that they were providing information on people searching for infomation about ‘flu to map outbreaks, and this week there was an article in The Economist about how eerily accurately the decline in people searching about Ford cars was reflected in actual sales decline.

So what does Google’s clairvoyance tell us about DAB Digital Radio?

Let’s kick off with the basic trend of “dab radio” anywhere the world.

Google Trends for DAB Radio Worldwide (Click to enlarge)

Google Trends for DAB Radio Worldwide (Click to enlarge)

As a piece of calibration, this seems about right. Not surprisingly, the two countries that have really “got” DAB, the UK and Denmark, are pulling all the hits. And there’s a surge interest around Christmas which absolutely matches what happens to sales. (And Bristol is high source of traffic – can’t imagine why (OK – probably because Virgin Media have a connection to the Internet here…)).

The trend is pretty static, globally – but you can see the growing noise in the press about DAB, which continues fairly unabaited. (No, I can’t explain why Danish is inexplicably the top ranked language. Maybe the pro-rata’ed access to Danish language articles is much higher than to English language articles?).

So, let’s narrow it down to the UK.

Google Trends for DAB Radio in the UK (click to enlarge)

Google Trends for DAB Radio in the UK (click to enlarge)

Restricting the analysis to just the UK really don’t change thing very much at all, which probably gives us an insight into how much the volume of queries worldwide is driven by and influence by the UK. I think this means we probably drive virtually all the Google queries for DAB Radio. (More on that in second).  If I remember correctly, 2004 was the first Christmas that the BBC really pushed DAB, probably because they actually had some new radio stations to talk about. My intepretation of the declining peaks at each Christmas is that people need to know less about DAB and need to less searching to find out who sells it. And there is a drift downward in the number volume of queries. Does that mean that people want to know less about it, because they already know enough? Is that too optimistic?

But we know the UK is DAB-happy. What about the other big European country which was apparently so enthusiastic about implementing DAB. How does it look in Germany?

Google Trends for DAB Radio in Germany (click to enlarge)

Google Trends for DAB Radio in Germany (click to enlarge)

This looks rather weird. It suggests, from the shape of the graph, that overall query volumes are tiny. I compared the width of the “Country” bar graph (in the Worldwide chart) for the UK (98 pixels) with that for Germany (6 pixels). I know that’s horribly inaccurate, but it indicates that there’s probably about 15-20 times more queries for DAB coming from the UK than Germany. That Bayern comes top of the list doesn’t surprise – but it’s hard to tell if it’s because it’s the Land that is most active in DAB, or just the largest  of the Länder.

As the media seems to be keen to promote Internet versus DAB as the battle of all time, let’s have a look at the relative performance of those terms in Google Trends. Firstly, across the world.

Google Trends of DAB Radio and Internet Radio, Worldwide

Google Trends of DAB Radio and Internet Radio, Worldwide

Not entirely surprisingly, globally Internet Radio is searched for a fair bit more than DAB Radio. The average ratio is 10.8 : 1, but that seems to suggest that DAB is actually out performing Internet Radio in terms of interest and search terms. Let’s assume that most of the DAB searches are coming from UK, Denmark and Germany with  a combined pop’n of 147m, against a global population of 6.77bn. That’s a much higher proportion of searching for DAB Radio than Internet Radio. (Although people might also be searching for other terms).

The decline in the search volumes for Internet Radio is confusing, given that it’s apparently in its ascendancy. It’s much more apparent than the slight decline in DAB searching we saw in the UK. The only explanation I can suggest is that as Google gets used more by “normal” people, they are slightly less inclined to search out Internet Radio than the more geeky early adopters? Or has everyone got an Internet Radio now?

You can see from the bottom of this graph the country-by-country breakdown, indexed against DAB. (If you index it against Internet Radio, the country lineup becomes Mexico (!), Germany, Netherlands, Brazil, Peru, United States, Switzerland, Canada, Spain, Austria). Germany is interesting – more of that in a second. And you can see that in the UK, Internet Radio and DAB radio are about the same.

So let’s look at the UK in detail – DAB Radio versus Internet Radio.

Google Trends for DAB Radio & Internet Radio in the UK

Google Trends for DAB Radio & Internet Radio in the UK (click to enlarge)

In the UK, the two search times are neck and neck, with DAB just edging out Internet Radio on the basis of the seasonal interest around Christmas. It’s very interesting that the media perception is that DAB is in a ditch and Internet Radio is it – but that’s not what Google’s users are telling us. Notably, the amount of coverage of Internet Radio (the lower graph) is much much higher than DAB Radio, but it just doesn’t seem to be reflecting or driving interest. That does kind of figure – lots of Media noise about Internet Radio, but real people are looking at both.

Finally, a quick trip back to Germany to see how Internet Radio is doing there…

Google Trends for DAB Radio and Internet Radio in Germany (click to enlarge)

Google Trends for DAB Radio and Internet Radio in Germany (click to enlarge)

No DAB huh? I guess people will look for their radio choice va the Internet then. But still that dramatic decline in relative search volumes for Internet Radio recently. I’ll be intruiged to see what this graph looks like once the Germans have started promoting DAB+ to their population.

So, what can we conclude fro this graph-fest?

  • In the countries that have promoted DAB, it seems to be in rude health, and with no significant decline in interest, despite generally negative media coverage in the last year or so.
  • Internet Radio doesn’t seem to be growing interest relative to the growing amount of (largely positive) media coverage of it.
  • Relative interest in both DAB and Internet radio is declining as more “normal” people start using Google to look for stuff that interests them. But interest in Internet Radio is declining faster than interest in DAB Radio.
  • In Germany, people are interested in Internet Radio (presumably to seek out choice) and would probably just as interested in DAB Radio if it were promoted with confidence.

I’m going to keep an eye on “The Trends” and will maybe update in 6-12 months time. (I’ll also hopefully have some first data for Australia, in which DAB search terms rate 0 across the board).

P.S. Just to reassure you that the terms DAB Radio and Internet Radio are what German speakers would search for (well, as much as any British person) I speak enough German and know enough German speakers to be reasonably confident that the results aren’t skewed by the language difference.

The Myers Report and DAB Digital Radio

BBC Radio Holby co-shares with Classic Gold

BBC Radio Holby co-shares with Classic Gold - from a Casualty shoot in 1999

John Myers’ report “An Independent Review of the Rules Governing Local Content on Commercial Radio” was published yesterday, and it’s well worth committing time to read through in detail.

If you’re outside the UK (or even outside the UK Commercial Radio Industry), you might be wondering why a report into the regulation of local content on commercial radio should involve Digital Radio.

I will very briefly précis 95% of John’s report. Commercial radio has got into a perilous state financially, through a combination of over-farming (too many new licences, not enough associated audience/revenue growth) and increasingly burdensome costs. The currently regulatory system promulgates this situation, and without urgent change, there is a real risk of sectoral failure.

John’s remit was to consider the regulatory environment surrounding local content, but Digital Radio (and digitisation in general) is brought to the report in a number of places. (I’m not going to talk about the issues and suggestions in respect of local regulation that John raises in his report).

A key tenet of the report is that the current regulation of localness is wholly inappropriate for the media environment of 2009 and  onwards. John mentions several times that it should be considered unreasonable for licensed radio operators to work under local content regulation when Internet radio does not. In my opinion, John has somewhat over-played the threat – current and future – from Internet delivered radio to support this argument. I believe the issue is that listeners are seeking choice and innovation, and that if the licensed industry can’t/won’t provide that, people will find it from new operators. In this respect, the method of delivery is largely irrelevant. Existing operators stream over the Internet, and new services can start on DAB (but see below too). It probably depends on how much choice you have to deliver to remove the incentive to buy IP-connected radios to seek out new stuff, and your estimation of the value that exists in the “long tail” of radio. In my view, radio operators have all the tools the need to reach out further down the long tail if they believe it’s profitable to do so, and have a unique advantage of doing so on both IP and into protected spectrum which will deliver universally into the fixed and mobile domains (that would be DAB then). Even with broadband penetration heading towards 80%, Internet listening is very very small, and dwarfed by DAB listening.

Whilst outside the direct remit of his report, John clearly identifies that costs and revenues are a problem for the radio industry. Growing numbers of stations have raised sectoral costs, and revenues are declining. Changing the regulation of localness would relieve the industry of some costs, but John is right to identify that the implementation of DAB has saddled the industry with burdensome long-term costs that it can’t support in the current environment. I agree. He reviews the rapid licensing policy of DAB, and notes that many of the multiplex areas licensed were barely able to profitably support one or two local FM services, let alone the addition of a local multiplex. Understandably, John has avoided detailing why DAB is so expensive, but you’ll know from my previous posts that I have a much more unequivocal view – the multiplex spectrum plan was too complex which drove up the infrastructure complexities, and the transmission provider offered prices that now look very unattractive. John suggests that the costs of DAB can be made more realistic by re-planning into a less complex configuration – which I hope also translates into fewer sites running at realistic power levels. This is a sound recommendation which I hope OFCOM and DCMS take note of and get moving on quickly. Sadly, DAB+ still isn’t mentioned, meaning it remains taboo in the UK. That’s a mistake in my opinion, but as I’ve said before, it’s an issue of frightening complexity, and I can understand its omission.

The most contentious recommendation, in my view, is this. John recommends that one of two things should happen; EITHER Broadcasters should not be allowed to run multiplexes OR the cost of multiplex access must be more directly regulated by government to ensure it remains at or below the equivalent analogue cost. I’m very much hoping that John made the first suggestion for it to be roundly and loudly rejected from all sides, leading adoption of the second approach. In all honesty, I don’t think either is optimal. It has long been an issue that the gatekeeper regulation of multiplexes included a loophole that allowed the gatekeeper/broadcaster to attempt to cross-subsidise the carriage of their own stations. This probably made sense in the heads of the accountants, but was a dismal failure on the ground. The high cost of DAB carriage deterred many new entrants (although that could also have been policy – deliberate or accidental) and thus multiplexes lost money in reality, even if the paper accounting looked OK.

But it had a far more detrimental effect, and one that goes to the root of the slowdown of DAB in the UK, and the failure to see enhanced revenues from going digital. DAB did not grow and flourish with new and innovative services that consumers were expecting. And neither did it deliver new things to advertisers in any volume. In short, the policy hindered the very innovation that the industry needed from digital. The reason that no data services launched in the UK was due to an unholy interplay of effects around multiplex ownership, costs and infrastructure capabilities.

I can understand John’s call for broadcasters not to be gatekeepers, given the circumstances, and maybe it will always be an unresolvable conflict of interests for a broadcaster to try and encourage competition and innovation against its own stations. I think the Australian model of multiplex ownership and regulation bears careful inspection, to see if it can be exported to the UK. I don’t believe it’s right for there to be no involvement from broadcasters in the development and management of their digital platforms, and I don’t believe an infrastructure provider operating in isolation has the right incentives to manage costs, coverage and functionality appropriately.

In respect of costs, the evidence is that DAB, when deployed in a sensible configuration, is naturally lower in cost than the equivalent FM coverage. Indeed, that was the whole point of DAB; to replace 6 identical sets of infrastructure costs with one single cost carrying 6 stations – but we lost sight of this somewhere. If DAB is replanned properly, and if the cost is equitably shared amongst the users (without daft “uplifts” for functionality), it will be cheaper than FM. Of course, someone has to bear the risk of the whole cost before it’s shared out, and that’s a tricky one to answer. But if broadcasters want to address the long-tail with more services, they’ll have to bear more costs of infrastructure and spectrum, and it’s naive to deny that.

John’s report uses the opportunity to address many of the failures in the UK’s DAB deployment, and I’m glad to see his recommendations concurring with many of my own suggestions. Now the report has to be acted upon by OFCOM and DCMS, and swiftly.

No More Channel 4 DAB

Channel 4 Television Headquarters, Richard Rogers Development by .Martin. @ flickr

There has been a tidal wave of reporting, comment and speculation today about Channel 4’s decision not to become a radio broadcaster. The implications of their decision came through in two parts. Initially, it became clear that Channel 4 were pulling out of 4 Digital Group, which effectively dealt a death blow to the national multiplex licence that the group (which also included Bauer and UBC) had won in summer last year. Then, later, there was confirmation that Channel 4 would be scrapping its radio division entirely, ending the possibility that one or more of Channel 4’s stations might end up on the DigitalOne multiplex. There has been substantial amounts of speculation and comment regarding the discussions between DigitalOne, Channel 4 and OFCOM, and the issues are so complex, it’s hard to see how any of it could be entirely accurate.

The news that Channel 4 won’t be participating in DAB Digital Radio is, of course, not great. But Andy Duncan was careful to point to Channel 4’s own financial difficulties as being a key determiner in their decision, not DAB Digital Radio as a platform. I wonder how much the C4 Board were working out how to justify cuts to their core, established, business (and a certain amount of pleading for government assistance) as the same time they were launching a radio division. I believe Andy when he says that Channel 4 went into this with all good intention, and are just being clobbered by the economic situation. So maybe it’s not “never”, just “not now”. It’s a shame, because they had some good ideas (particularly for data services) – but they don’t have the monopoly on those.

Some of the current doom-mongering is happening because so much expectation was heaped upon Channel 4. If it became perceived wisdom that Channel 4 would invigorate the Digital Radio business, then clearly a “no show” tends to suggest the opposite. But I would disagree; indeed, some projects in DAB have been held back waiting for the outcome of the Channel 4 / Second National Multiplex story. There are now fewer unknowns to deal with, which hopefully makes decision making on re-inventing DAB somewhat clearer.

In my opinion, not building a second national digital network is a very good thing for the radio industry. The last thing the industry needed now is to be facing another long-term and expensive commitment to transmission infrastructure; infrastructure that would provide capacity that currently isn’t needed. Remember that the second national multiplex licence sprang into life (well, “was slowly conceived”) when DigitalOne was full and getting fuller. But we have capacity now – both on DigitalOne, and on local and regional multiplexes.

There are other benefits too. DAB in the UK needs a shake up, and one that (hopefully) the right combination of DRWG, OFCOM and the broadcasters will give it. To make really effective (and necessary) changes requires as clean a sheet a possible, and it would have been awkward to have a D2 multiplex just a few years into its existence whilst all the other multiplex licences reach potentially useful breakpoints (both in their licence terms and their infrastructure contracts). If DRWG recommends replanning, there’s no easier time to do it. Similarly, at some point we will need to look at the opportunities that DAB+ might bring to us.

Radio is suffering at the moment. Small stations are struggling to stay above water, and everyone is feeling the impact of a turbulent economy. Channel 4’s arrival might have stimulated some renewed interest in radio advertising, but in the short term they probably would have been grabbing revenue off other broadcasters, and doing that in lean times is hard on everyone.

When reading the doom-and-gloom headlines, and some of the melo-dramatic reporting (and “commentary”), it’s easy to lose track of the fact that DAB is a pretty good consumer story. In the four years since 2004 we’ve moved household penetration from 3% to 27%, and receiver costs have dropped to sub £20. (Admittedly, the 5 years before that were pretty dud). DAB accounts for 11% of radio listening, which means it’s underpinning about £60m of revenue for commercial radio.

The threats to DAB are understood and fixable. There are no problems that are insurmountable, and no threats outside the control of the UK radio industry. No other technology has suddenly appeared that makes DAB look irrelevant. Most people believe that the decision (if there is one) is whether radio stays analogue or goes digital using DAB – I don’t hear anyone seriously postulating using an alternate digital technology.

I’m reconciled to the fact that there’s going to be lots of negative commentary about DAB over the coming weeks, and a lot of it won’t be very accurate. Channel 4 not committing to DAB at this stage won’t kill it, but when the dust has settled, it might just make it stronger.

Photo: Channel 4 Television Headquarters (CC) .Martin. @ flickr