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Radio’s “juke box” approach is killing DAB

The commercial radio industry’s juke box approach to digital radio is killing the medium and is a demonstration of how protected their industry is.

This week, for the first time, audience figures were released for DAB+ digital radio. On the face of it, it seems like good news. Nearly 3.2 million people listen at least once a week across the five state metropolitan cities. That means, more or less, digital radio has achieved a quarter of the reach of AM and FM radio.

Yet the truth is, the majority of people are listening to stations already available on AM or FM. Most likely, the push is from those who want better audio for an AM station, including ABC and talkback channels. If you want to listen to FM stations you’ll generally get better quality listening to FM.

Nothing more than a blocking mechanism

The results are what the commercial radio industry would have hoped for. It shows a platform that has extended the reach for their existing programmes without introducing any pesky competition.

The fact that less than half of all DAB+ listeners ever tune in to the myriad of digital only channels isn’t important to them. The licences for these extra channels were doled out to incumbent AM and FM broadcasters, who filled them with automated music programs, of which there are already millions of channels available online. The focus, clearly, was on preventing new entrants into the market, who would steal audiences away from their existing analogue channels.

Take Sydney as an example. Three quarters of the one million DAB+ listeners tune in to simulcast stations, most likely dominated by the nine AM stations simulcasting on DAB+. Then there are 32 digital only channels that attract a cumulative audience of just 469,000 listeners.

The most popular of these channels in Sydney is Triple M Classic Rock, which reaches 72,000 people – that’s less than Sky Sports Radio, an AM station with a 1.2% share of listening. So, the best digital channel is rating around 1%. Imagine how the other 31 are going. If they had to run on a stand-alone commercial footing, they’d all go broke tomorrow.

Understandable fear

It’s hard to call Australia’s DAB experiment a success. Small audiences with low cost services that offer little in the way of diversity. I’d say it’s been a massive policy failure on the part of the government, who cow-towed to the incumbents’ demands. The industry has, of course, every right to fear the consequences of open competition. Imagine 32 entrants programming stations that could dig-in to the cosy arrangement that has seen no new FM or AM players since 2005.

Yet, traditional stations face a far bigger competitor. Ratings released in the UK this week show that, over there, AM and FM accounts for just 60% of all radio listening. DAB (with more than 60 stations to choose from) accounts for a chunk of the remainder, but online and apps make up 6.4% of all listening. With digital radio yet to get the foothold it has in the UK, where half of all households have a set, online could quickly grab a higher share of the market here.

With that threat hanging over their heads, the radio industry needs to react. First, they need to take the DAB+ opportunity seriously and start delivering genuine choice. 3.2 million people is a large population to tap into and the more diverse the content available the more that reach will grow. It’s their one chance to slow the migration to online.

The government can respond too. It has earmarked spectrum for more digital services in capital cities. At the moment it’s lying dormant. It should call for submissions for another multiplex in each capital, asking each bidder how they will bring diversity to the Australian broadcasting landscape. They should instantly discount anyone whose approach is to plug a computer in and flick the auto switch.

That’s what’s been done in the UK. Earlier this year Sound Digital, a consortium of UTV, Bauer Media and Arqiva, won the bid to launch a second national digital multiplex, offering 15 new services in a crowded marketplace. They won by offering unique services that provided genuine choice.

A similar announcement here would give the commercial radio industry the lightning bolt it deserves. Unless, of course, existing players believe their industry has a right to protection. Otherwise, we should let new entrants shake things up. Surely one of them can reach more than 72,000 people in a city of four million. That’s digital radio’s market leader right now. The bar has been set pretty low. Curious how anyone could claim it’s a success.

First published in AdNews

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