Sergio Natucci, Chief Operations Officer, Club DAB Italia
Italy has a 65% daily outdoor reach on digital radio. The services are provided by two operators of commercial radio (Club DAB Italia, EuroDAB). The public broadcaster (Rai) is currently providing up to 40% outdoor coverage. It is anticipated that by the end of 2015, all operators will offer 75% coverage. Given the complexity of this situation we cannot assume a DSO in Italy as currently the VHF-III band is almost entirely dedicated to television broadcasters, however it is possible that some regions of northern Italy could see an FM switch off. It is more important that commercial stations focus on the development and success of digital radio roll-out across all the Italian territory before any announcement is made on any possible FM switch off date.
Factors contributing to Digital Switch Over
It is important that outdoor coverage reaches 95% across all its regions and that significant indoor coverage is also made available. Secondly, Italian automotive manufacturers must be able to offer DAB+ in as least 60% of all their new models. There are currently many barriers to any possible DSO announcement. Firstly there are few financial resources in the private radio sector, there is a high number of local radio stations and currently the development of the public digital radio network is slow. In addition there is a low availability of spectrum for all operators.
The future of Digital Radio
For Club DAB Italia, the main objective is to work on extending the limited digital broadcasting network and increasing marketing strategies to promote awareness of services and benefits of digital radio to the consumer. For Italy a DSO scenario would be optimistic and building out new networks and offering consumers a choice of affordable devices for in the home and in car, Italy will be much more likely be able to pursue a DSO date in the future.
Bob Gorter, Digital Switch Over Group (Netherlands) Marketing and Communications Manager
In the Netherlands, both public and commercial broadcasters offer 95% outdoor coverage. Work is also underway to promote the benefits and services available on air via DAB+ through a national cross media consumer marketing campaign. Work also continues to bring more services on air.
DAB+ digital radio was launched in September 2011. Being a relatively new digital radio market, digital radio stakeholders are on focused building out the network and bringing new services on air. Therefore the Netherlands will not be seeing a DSO scenario in the next five years. Instead the Netherlands is working towards a more feasible date of 2023 as there is currently 0,002% receiver sales penetration.
A coordinated plan is required to rollout of DAB+ effectively
In the Netherlands it is believed that a well thought through plan, with specific steps to ensure a coordinated rollout of digital radio is required. In addition the public and private broadcasters need to work together with the Dutch government on implementing this plan and care needs to be taken over licensing. It is very much understood by those leading the development of DAB+ digital radio that there is a firm need for a switchover date to bring around the success of DAB+ digital radio.
Barriers to DSO
The greatest challenge to overcome to ensure a future DSO date is that a solid foundation is laid for a digital radio future. Through a comprehensive rollout plan, the coordinated efforts of all three parties – the public and private radio sector and the Government the main challenges such as increasing sales receiver penetration, completing the rollout of the network, increasing coverage as well as raising consumer awareness and working with automotive manufactures to offer DAB+ in car can all be overcome.
Addressing the challenges to DSO
Currently we are at the rollout phase and all three sectors, the private and public broadcasters together with the Government, are working in collaboration to pull together a plan and sign off on agreements to ensure DAB+ digital radio has a secure future in the Netherlands.
Jörn Jenson, Senior Advisor – NRK, WorldDMB Steering Board Member
Norway is currently finalising FM switch off plans and looking to provide listeners with digital only sources of radio. Listeners may choose to tune in to radio via apps on their smartphones and online, but the majority of digital radio listening remains via DAB/DAB+, which is and will remain, the backbone of radio broadcasting.
Today Norway currently has a 45% daily reach on digital listening, we are soon approaching a 50% reach and NRK, the Norwegian public broadcaster is able to provide all of its 14 stations to the entire population via DAB+. In addition the commercial radio sector is now able to extend their brands by creating multiple stations without obligation to create certain content.
Also, now commercial stations do not need to pay for expensive license fees. Interest among local radio in DAB/DAB+ has also grown. Currently we see a number of local radio stations on air across the 37 local areas. In the future they will be able to utilise the diverse multimedia experience offered by DAB as soon as DAB/DAB+ compatible chips find their way into smartphones and tablets.
Digital Switch Off
Norway will hopefully see FM switch off by 2017. Norwegian decision makers saw that DAB/DAB+ is the digital radio standard of choice across Europe and Asia Pacific and in 2011 a report by the Norwegian Parliament stated that broadcasters could shut off FM if certain criteria where fulfilled.
Coverage (absolute condition for FM shutdown): Before 2015, the public broadcaster NRK must achieve coverage of 99.5%, the commercial broadcasters on the national multiplex #1 are required to reach 90% of the population.
Value added for the listeners is an absolute condition for FM shutdown. There must be a value added for the listeners in going from FM to DAB, both in terms of content and user experience.
Digital listening is a condition to be met in order to shut down FM in 2017. Failure to reach it can postpone the shutdown until 2019). Before 2015, 50% of radio listeners must use a digital radio platform daily. This does not specify market share of listening, contrary to the UK requirement, only reach. “Digital platform” also includes listening via the Internet and via the digital TV-network. This condition is set in order to measure the listeners’ independence from the analogue FM-platform. It has been specified that half of all Norwegian municipalities must be able to offer in-car DAB-adaptor installation.
Setting a date for Digital Switch Off
For NRK, it was important to lay the foundations for a secure digital radio future before any announcement was made on a digital radio switch off date.
The most important steps in the process of bringing about DSO are collaboration, cooperation and collaboration! From the very start of the Norwegian broadcasting industry commencing digitisation of its services, public and private broadcasters agreed that they should cooperate on technology and compete on content. Consequently Norway was the first country to bring DAB digital radio services to its citizens, with the very first services available from as early as June 1, 1995.
As well as collaborating with each other, the industry also worked with regulators and decision makers on formulating a plan on how to make radio “all digital.” Today, the Norwegian radio industry and stakeholders are able to benefit from this early industry cooperation and an agreement on the future of radio broadcasting in Norway was reached.
Barriers to DSO – How does the automotive industry affect DSO?
Every country has different regulation and population structures and the effects of FM switch off will vary accordingly. For Norway the continuous cost of simulcasting was affecting the services on offer and had financial implications. The financial implications were that parts of the existing FM network were in need of an overhaul. Secondly, NRK could foresee a cost of $25 million (€18 million) for a DAB network transmitting 14 channels and $28 million (€20 million) for continuing FM only with three stations.
Even though a decision has been made on FM switch off, Norway still faces challenges. Around 3 million cars are on the road; 2 million of these will have to be fitted with digital radio adaptors before an FM switch off. Retro fitting these cars is possible and provides manufacturers with business opportunities.
Extending digital radio coverage in Norway
NRK has played a significant role in bringing about an FM switch off announcement. NRK built the digital radio network up to around 80% coverage. In discussing the future of radio with the government, NRK stated that there would be no further extension of the network unless a clear date was set for FM switch off. As soon as an FM switch off date was announced, NRK continued with the build out and work on reaching its goal of 99.5% coverage.
During this time of negotiation, analogue TV was replaced by digital TV (analogue TV switch off was on Dec. 1 2009). Through informing relevant decision makers, the important assessment on the future of radio was undertaken and Norwegian politicians felt secure in making a decision on the future of Norwegian radio.
Setting the date for DSO
For Norway the best case scenario would be that we meet all of the set requirements for FM switch off by 2017 and are able to offer Norwegian citizens a fully digital radio future. We want to be able to offer our listeners more choice and enhanced services.
Although Norway is a small country, we have set a solid framework to follow. With cross industry collaboration at its core, Norway finds itself as the first country to be able to confidently say that we will be able to provide an all digital radio future.
Per Borgå, Teracom AS
In Sweden, the government has appointed a special digital radio co-ordinator to draft a switchover plan from FM to DAB+. The plan is to be presented in November 2014 and shall take the position that a switchover is possible in 2022. The co-ordinator is currently in discussions with broadcasters and other major stakeholders to find common grounds for the switchover. Today, there is a broad Parliamentary consensus in favour of digitisation of radio, but an actual decision has not yet been taken. Meanwhile, public service broadcaster Swedish Radio (CSR) reaches 35% of the population with DAB/DAB+ transmissions and all major commercial broadcasters have applied for digital radio licenses. I expect the commercial licenses to be issued before summer this year.
The future of Digital Radio in Sweden
I believe that in 5 years’ time the DSO process will have started and a decision on an exact date for DSO will have been taken in Sweden. In my mind, Sweden is more likely to be in the “digital radio introduction stage” than in an “analogue radio phase-out stage” at that time.
It is important to have clear rules for the market so that the industry can make proper plans, ultimately for the benefit to the consumer. One such strong and clear message is setting a date or a set of criteria for a DSO. For me, a digital switchover is inevitable, it is a natural shift of technology and it gives undeniable consumer benefits. But, a switchover is a long process and to be able to execute such a plan, the radio industry needs the politicians to provide the necessary framework and conditions.
Having said this, for broadcasters such as community radio stations setting a switch off date for FM is probably not important. If they are only broadcasting on FM today and not concerned about rolling out digital radio or the cost of parallel distribution, why should they bother with a switch-off date? There is no demand for the FM frequencies from what we know today, so why not use them as long as the broadcasters see a need? For larger commercial radio stations and public service radio stations which are in the process of rolling out digital radio, they are facing costs for parallel distribution and setting a date for DSO is critical for them.
Important factors for DSO to take place
The most critical and crucial factor is to get long term support (financial models, regulatory framework etc.) from the politicians. Like other questions on infrastructure (railways, roads, telecommunications), digitalisation of our broadcasting infrastructure is a decision for the Parliament. In this process it is central that the radio industry in itself first unite on the way forward. If there are strong opposite opinions within the radio industry, you will certainly not make the politician’s job easier and you will not get the directives you want.
One of the major challenges for DSO is the issue of “awareness gap” – the “common” opinion that “no-one listens to radio anymore” and that “it is all going to be IP, so why bother?” The fact of the matter is that radio is hugely popular and there is noone arguing that radio in the future should only become a pay-service for fixed and mobile broadband subscribers. The costs are too high for such a scenario and for me it would be highly undemocratic to put public service radio behind such a “pay-radio wall”. I believe that radio has a strong future on all platforms including broadband, but just like today we are still going to need a terrestrial backbone network, and for an indefinite future. When you have come to this conclusion, it is natural to recognise that the terrestrial network also needs to be modernised and streamlined using digital technology.
Second, there is a misunderstanding among some that digital radio will bring huge costs and poor services for the consumers, when all available fact point in the opposite direction. The cost rhetoric’s seems to be that since there is an existing analogue FM radio network, someone have already paid for it and therefore there are no costs for using it. Fact of the matter is that Teracom spends millions a year keeping the analogue radio network up and running. Going digital means we can cut our yearly costs (up to 80% per channel), lower our power consumption (up to 75%) and get spectrum to substantially increase the number of channels (up to 800%). At the same time consumers that invest in digital radio receivers will get more power efficient devices in their homes (up to 20% savings), can enjoy more services, get services that are more specialised and get better reception. For me, these arguments alone are substantial drivers for going digital. The opposite arguments I hear are like saying to a house owner, – ‘You should not invest in a more efficient heat pump that will lower your power consumption with 80% so you can get a return of investments in 2 years. Stay with your old heat pump and keep paying high electricity bills so you can avoid the investments’… Well, that’s just silly.
To bridge the gap and get support from your politicians you will need to show proper and correct consumer upsides with the shift of technology. In the case of commercial radio you will need to show that digital radio presents major opportunities to them, both current and new players. In the case of public service you need to show lower costs and at the same time get more channels. In the case of players outside the radio industry you will need to show that putting resources into a modernisation of the terrestrial network is no threat or contradiction to putting resources in radio via broadband or for that matter staying on FM if that’s what you prefer.
In short: You need to have the facts and the arguments ready to bridge the awareness-gap and you cannot underestimate the task.
Terracoms’ role in an effective DSO
Teracom is a broadcast network operator and as such we have the competence and the organisation to plan and execute the technical part of a DSO. As the radio industry’s technology partner we can also act as a natural coordinator for players such as retailers and the car industry and take an important role in informing the consumers about changes in coverage and service offerings etc. In the historical switchover from analogue to digital television in Sweden 2003-2007, Teracom took a major role in executing the communication plan and making sure the consumers got all the necessary information. The communication activities at that time were synchronised in a joint organisation between broadcasters, retailers, regulators and government. From my understanding, this is much like how organisations such as DRUK and Digital Radio Norway operate today.
Ford Ennals, Chief Executive Officer Digital Radio UK
Digital radio launched in the UK 15 years ago. After initial slow take-up, digital radio listening has accelerated and over 50% of the population now listen to digital radio every week.
In the UK nearly 20 million DAB digital radios have been sold, and 48% of homes have a DAB radio. There are 20 national BBC and commercial digital-only radio stations, supplemented by a range of local digital stations. Current DAB coverage of BBC national stations is 94% and coverage of commercial stations is 90%. DAB coverage of local stations is 72% which is being expanded to 90% over the next 2 years. In 2010, less than 10% of all UK cars had digital radio, but now 55% of new cars come with DAB digital radio as standard. Digital Radio UK was created by broadcasters to accelerate the growth of digital radio take-up and listening, to get digital radio into cars and to work with the UK Government and media regulator Ofcom to plan a future radio switchover.
The future of Digital Radio in the UK
The UK Government has set listening and coverage criteria before a switchover decision is made and a firm timetable is set. We are likely to achieve these in the next 3 years, and would anticipate a switchover in the next 6-8 years. A clear switch-off date and a strong digital offering provides valuable consumer and market momentum. Ultimately without this a transition to digital radio will not be completed. In most cases it is necessary to achieve a sufficient roll out of digital radio to first gain political and consumer support. The best case scenario to set a realistic date for DSO is for the UK Government to set a date when the criteria for DSO have been met.