Dead and Buried? Not a bit of it
Posted on Saturday, October 11th, 2008 at 9:26am. #
The news yesterday that Channel 4 have withdrawn from the ‘4 Digital Group’ (the consortium that was to build the second national DAB commercial multiplex) is disappointing, but inevitable. But it doesn’t mean any lack of faith in the technology behind DAB.
Critics of DAB were quick to seize on GCap chief Fru Hazlitt’s rather unscripted “withdrawl from DAB” at the beginning of this year as a lack of faith in the technology as well. In fact, Fru was keen to point out that DAB was a great technology; just that the economics were a bit difficult right now.
For many of us the recession only started in the last few weeks as we’ve watched seeming unassailable banks going bankrupt; but for the advertising industry, that recession started a good few years ago. Downturns in the advertising market always precede recessions; and in commercial radio, that advertising downturn has hit badly in the last few years. Media companies are in a recession; and have been for a good few years now.
So it’s not surprising that, just as GCap were looking at cutting costs, so Channel 4 – a company already cutting 15% of its workforce – has made the decision not to launch new radio stations. Indeed, Channel 4 were already freely admitting that the stations would not make money for some time; for a broadcaster with designs on a slice of the licence-fee, it would have been foolish to have launched a number of loss-making radio stations and then wandered cap-in-hand to Ofcom for a little extra money.
This is purely a business decision. It doesn’t reflect on the technology behind DAB.
But it does, however, show the UK radio industry in sharp relief from the Australians. Here, Ofcom advertises for a company to run a multiplex. That company goes to a transmission provider to run the network for them. So, the transmission provider takes a healthy profit; the multiplex owner takes a healthy profit. Add the peculiar service areas that multiplexes must cover, normally dictated by a commercial radio heritage station’s FM coverage area, a requirement that overspill is kept to a minimum, and European harmonisation of frequencies and power strengths – and you normally end up with a number of DAB transmitters to cover an area. In London, the area ably covered by one transmitter like 102.2FM, you need ten DAB transmitters to cover the same area. The result is that capacity on DAB Digital Radio is eye-wateringly expensive in the UK. Little wonder that some stations need to make the decision to cut back on audio quality to pay for what little space they can afford.
By comparison, the Australian radio industry, when it goes live in May next year, own the transmitter towers itself – so there are no multiplex owners, nor transmission providers, to pay. They’ve bought the bits, and are running sensibly high-powered transmission chains which mean transmission costs are similar to FM. (The DAB+ bit doesn’t even enter into it, since stations each have 128k of capacity to do with what they will).
Perhaps the exit of Channel 4 will result in a re-examination of the UK’s business model for DAB.
But, given the tremendous audience figures and receiver sales for DAB, it needn’t, and shouldn’t, result in a re-examination of the platform itself.
The BBC’s national multiplex does not follow the above model; and this post is, as ever, a personal view. Photo: Dave Wild. Used under licence.
