Digital switchover of television and radio in the United Kingdom - Communications Committee Contents


Letter from Mr Daniel Nathan, Director, Brighton & Hove Radio Ltd

  I am writing to you with a submission for the Select Committee on Communications in my capacity as a Director and lead shareholder in Brighton & Hove Radio Ltd. This supplementary paper follows my support of an earlier document co-authored by the UTV Media & the UKRD radio group. I am prepared to supply further detailed evidence if required.

THE CURRENT STATE OF THE GOVERNMENT'S PLANS FOR SWITCHOVER TO DIGITAL RADIO

  Witnessing the passage of the Digital Economy Bill through the Parliamentary process has underscored how ill thought through the idea of switchover or "upgrade" to digital radio has been so far. Recent official papers suggest the Government "hopes to have a comprehensive plan by the end of 2010" and "will carry out a cost benefit analysis" and impact assessment only after the legislation hits the statute books.

  A letter from the Rt Hon Lord Mandelson, Secretary of State, Department for Business, Innovation and Skills to the Chairman of the Delegated Powers & Regulatory Reform Committee concedes that DAB upgrade "is unlikely to be an easy task", unlikely "to be resolved quickly" and still requires:

    —  agreement about the current levels of FM coverage;

    —  agreement of a plan for building out DAB;

    —  agreement on the level of investment required; and

    —  that the funding issue has yet to be agreed between the BBC and the commercial radio.

  It appears there is little understanding of the scope of the "Digital Upgrade" project, no knowledge of what it will cost and no idea who will pay for it. These questions surely need to be addressed before Parliament commits to the legislation that is intended to offer a strategic framework for the radio sector.

THE OUTSTANDING TECHNICAL ISSUES, INCLUDING THE APPROPRIATENESS OF DAB AS THE DIGITAL RADIO STANDARD

  The fundamental problem with the DMB family of digital radio standards—which include the iteration of DAB adopted in the UK, Norway and Denmark is that critical mass was not achieved fifteen or even ten years ago. The promise of new services—interference free and with "CD quality" sound was never realistic and consequently disappointed consumers.

  In today's media landscape, FM (and even AM) remain the only truly global broadcast radio solutions on offer, while choice and higher quality sound and supporting digital services are seamlessly integrated online. The digital platform we've built from scratch is barely fit for purpose and yet has drained commercial radio of an estimated £700 million in less than 10 years—considerably more than the sector's annual turnover.

  DAB can cost up to 20 times that of local FM transmission. The proposed build out from patchy local coverage with a combination of higher power and fill in DAB transmitters in metropolitan areas can only increase that cost—unless DAB multiplex operators accept some form of price cap. A single FM transmitter can serve a coverage area of up to 30 miles radius and will continue to be the most effective method of local radio transmission.

  DAB+ is cited as a potential route to digital broadcast in the medium to longer term. It is certainly true that while it offers more efficient use of spectrum—more stations at less cost with better sound quality. It also degrades less easily than the version of DAB available in the UK—a serious problem when you want to listen to the radio rather than the sound of `bubbling mud'. However, at present only 4% of radio listening is to digital only radio stations. There is no sign that either public service or commercial broadcasters have the financial resources to deliver the incremental compelling radio content let alone building yet another costly delivery platform from scratch.

THE VIEWS OF UK BROADCASTERS, CONSUMERS, AND RADIO INTEREST GROUPS

  They key driver for new and younger listening around most of the world is integration of FM receivers in mobile phones (and increasingly accompanying mobile internet delivering on demand supplemental audio/visual functionality). The world's biggest manufacturer of radio sets is therefore... Nokia which has sold 700 million FM radio enabled handsets on its own in five years in contrast with cumulative world-wide DAB sales of less than 30 million over 10 years. It is worth adding that only 18% of DAB radio receiver owners in the UK are under the age of 35, according to DRDB data.

  The US radio trade organisation NAB considers FM on-board mobile phones as the most significant method of recruiting new radio listeners. The UK's own RAJAR audience data also demonstrates that mobile listening is by far the fastest growing radio platform in this country—and though this figure is sometimes apocryphally conflated with "digital" listening, there is no mobile handset on sale in the UK market with DAB capability. There is also no plan for one. Looking to the near future it should be noted that in Japan (no DAB there!), marrying FM broadcast with mobile internet for "back channel" interactivity and digital services is gaining traction. FM remains the global standard for radio transmission. In the last seven days, the Canadian Government joined the rest of North and South America in effect abandoning DAB by declaring it "no longer a replacement for analogue AM and FM services".

  The invisibility of DAB in cars is perhaps the starkest illustration of the platform's inability to gain public acceptance. According to the Digital Radio Working Group own figures, less than 1% of vehicles have DAB radios fitted and yet the same organisation maintains that a full switchover could be a realistic project within five years. Halfords, the UK's largest retailer of in-car entertainment last year withdrew all DAB product from its catalogue—citing low customer satisfaction.

  Everyone accepts that there will not be sufficient DAB capacity for many local radio stations to be included in the mooted "Digital Upgrade". The latest wheeze to mollify those that fear being relegated to an "analogue backwater" is the concept of a universal EPG or electronic programme guide. The idea of using common (metadata) standards to navigate seamlessly across different media platforms is already achieved in the latest generation of smartphones. However this is a software driven solution and a costly one at present. A laudable ambition, the Universal EPG will take time and money to develop and it will only fly if global scale allows. Companies like Sony look at markets across the hemisphere rather than by national territory and build what the customer wants rather than what a government decrees. It came as no surprise to discover that Technical Directors of companies like Sony were definitely not consulted prior to Digital Radio UK's announcement of the EPG concept!

  The Minister advises us that "considered uncertainty" is the best way to plan for radio's future on the basis that we do not yet understand the market impact of emerging digital technologies. But the rate of that change is actually increasing—so the Government's logic dictates that we will understand less and less. The corollary of our digital age is that ready access to the facts and figures is always available to track development. I would urge a pause to examine this evidence before drafting inappropriate legislation. We have been told that the radio clauses of the Digital Economy Bill are "enabling"—yet on the face of it the only thing enabled is a greater concentration of discretionary power over our businesses by future Governments and their appointed advisors and regulators.

  To conclude, what UK radio requires is a pause to consider evidence and to carry out the full cost benefit and impact analysis on any switchover scheme. The process of consultation needs to be opened up to all of radio's stakeholders and not just those who can lobby loudest. At the conclusion of a transparent process, there ought to be certainty in the process of licence awards and re-awards in order that a thriving mixed economy of BBC, Commercial and Community Radio can thrive and prosper.

29 January 2010

BIOGRAPHICAL NOTE

  Daniel Nathan is a radio entrepreneur, producer and pioneer in new radio formats and platforms with over twenty five years' experience. Pirate radio in the early 80's lead to co-founding the UK's first "alternative" format Festival Radio with trial licenses in London and Brighton. Spin off Festival Productions made award winning syndicated new music radio, ad campaigns, drama and documentary series for BBC and UK commercial radio. A launch consultant for Kiss 100 in London, Daniel was subsequently the co-founder of Kiss 102 in Manchester, Kiss 105 across Yorkshire (both now Global Radio owned Galaxy) and Surf 107.2 in Brighton (now Juice 107.2). In 2000, he created totallyradio.com—groundbreaking "on demand" internet radio playing music beyond the mainstream. Daniel has lectured in radio and radio production at London's Goldsmiths and Birkbeck Colleges and The University of Sussex. Freelance writing includes The Guardian and City Limits magazine.





 
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