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Digital radio ’switches-off’

Posted on Sunday, February 10th, 2008 at 6:31pm. #

Jon Ronson

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.

5 comments

Adam Bowie said at February 10th, 2008 at 10:41pm

Better get up half an hour earlier James. If an announcement is made to the city ahead of Fru’s presentation, it’ll be at 7am!

Frankie Roberto said at February 10th, 2008 at 11:24pm

A bit unfair. The ’switches off’ is clearly metaphorical (although admittedly ambiguous if you only read the headline).

Selling a stake in a multiplex, and cutting two digital-only stations doesn’t exactly look good for ‘the industry’. But I’d agree that it’s more to do with GCap’s problems than with DAB per se.

Paul Miller said at February 11th, 2008 at 5:17pm

It’s certainly a “bold” move. The underlying problem doesn’t go away though. For an investor with a sum of money to play with, how tempting would GCap be? The company seems to have been undergoing constant re-structuring over the past few years, however they have not arrived at a stable strategy. As a result, this comes across as more of a “revolution strategy” which spells risk.

William T said at February 11th, 2008 at 5:51pm

What is the future for the BBC local radio stations that are on the Digital One multiplex if Digital One goes under? (it is not really clear to me, having read a variety of articles on this, if Digital One itself is likely to survive or not..)

Personally, I think that if all D1 can manage to broadcast is birdsong and BFBS (the latter I’m assuming for free, given the way it is described as a ‘trial’ on ukdigitalradio.com) then the BBC ought to be allowed to rent some more space on it - to improve the bandwidth of the music stations and have more flexibility with R4LW and 5LSE opts and maybe devote more bandwidth to data services.

Of course it probably wouldn’t help that the arrangement of the BBC national DAB transmitters and the commercial ones is completely different…

David Nolan said at February 12th, 2008 at 8:40pm

I think you are right to say that GCAP’s decision says more about their own business position than it does about DAB as a technology. If they really thought the web was the future then surely they would be continuing Planet Rock and the Jazz as web only stations? The fact that they are not, suggests that harsh business reality is forcing them to focus on where they can maximise profit fastest. It also suggests that web only stations are not viable yet, though the royalties folk probably have a lot to answer for that. I gather it is far more expensive to license a web only station than one which simulcasts on FM or satellite.

I feel a bit sorry for jazz fans. Whenever they get their own radio station it seems to get taken away from them. I’m not a jazz fan myself. I do like Classic FM though. So I’m not particularly pleased to hear what has been announced in a reply to those who have contacted “the Jazz” lamenting the stations forthcoming departure. Disappointed listeners have been told that from the end of February Classic will be airing two hours of jazz seven nights a week - admittedly those two hours are from midnight to 2 am! Still, I prefer speech to music at night so it wont inconvenience me too much, and I can hardly feel sorry for jazz fans with one breath and then take something away from them with my next. Apparently a jazz stream will also be added to the new “My Classic FM” audio on demand service, and the new midnight programmes will be available at any time of day via the station’s listen again facility. I hope they can find the cash to offer the ability to forward or rewind on listen again. Currently you can pause the stream but you can’t go forward or back. If your browser crashes half way through listening to a programme you have to go back to the start.

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