Digital radio ’switches-off’
Posted on Sunday, February 10th, 2008 at 6:31pm. #
So, the Sunday Times is reporting that GCap’s Fru Hazlitt is switching off digital radio. When the sub-editor doesn’t bother reading a story to make a headline, it’s a concerning time for journalism.
If the story’s true (and you and I will find out tomorrow morning at 7.30am) then GCap are dropping their majority shareholding of Digital One - the commercial DAB Digital Radio multiplex - and switching off their digital-only radio stations.
Their existing analogue brands will continue on digital radio. This is not a switchoff of digital radio, whatever the headline says. It’s also not a lack of confidence in the technology: just the economics surrounding it.
In the middle of an advertising downturn and a general lack of confidence in the radio industry, it’s my guess that removing these stations won’t actually make any difference to GCap’s profits (I’d expect these channels are just breaking even). However, it’ll make a good difference to GCap’s profit margin, since radio traditionally operates on a high profit margin (at least 50%, if not higher).
If you’re trying to impress analysts, this is exactly the way to go.
Next thing in digital radio’s future: the DRg local London multiplex apparently needs ten transmitters, yet the FM coverage for that area is done by just one. Perhaps now’s the time to make the industry realise that the transmission providers get money based on how many big sticks they convince you to put up…
Photo: me. It’s from a Jon Ronson book.


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