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A SHORT GUIDE TO DIGITAL

SWITCHOVER FOR UK RADIO

Contents

  • What is digital radio?
  • What are the ways of listening to digital radio?
  • What are the industry arguments for switchover?
  • What are the industry arguments against switchover?
  • What are the consumer arguments for switching to digital radio?
  • What are the consumer arguments against switchover?
  • What's happening in vehicles?
  • What would be the environmental impact?
  • What are the options for a switchover timetable?
  • How would switchover happen?
  • How much would switchover cost and who would pay?
  • Who decides and who advises?
  • What conditions need to be met?
  • What might stimulate a faster take-up of digital radio?
  • What is the timetable for switchover?
  • Who would need assistance with switchover?
  • What is the future for FM?
  • What about DAB vs DAB+?
  • What would happen if there was no switchover?
  • Some basic data

    • What is digital radio?

    Digital radio is radio broadcast in digital (discrete noughts and ones) format as opposed to radio broadcast in analogue (continuous wave) format.

    The process of adding audio information to a radio wave is known technically as modulation

    There are two analogue methods of modulation:

    There are two main digital methods of modulation:

    What are the ways of listening to digital radio?

    1. Over a digital radio set which might be in the home or office or in a car
    2. Through a digital television set - but this is not as portable as listening on radio sets
    3. On a computer connected to the Internet – but current networks cannot sustain mass listening on PCs
    4. On a mobile phone connected to the Internet – but current bandwidth constraints limit the amount of live listening that is possible on mobiles

    What are the industry arguments for switchover?

    1. It would save transmission costs because there would no longer be the need to maintain two transmission platforms. Currently, for commercial radio, the analogue network costs just under £20 million a year to operate, while the digital network costs over £30 million a year to run. The BBC has similar duplicate costs. Therefore the total extra cost to the industry of dual transmission is around £50 million.

    2. It would remove the pressing need to make new investments in analogue transmission infrastructure much of which is now dated.

    3. It would release some spectrum which could be sold by Ofcom for other purposes – although, compared to digital switchover for television, the spectrum involved is very much less and very much less valuable.

    4. It would stimulate the market for new receivers. Radio listeners would have to buy new, more expensive sets.

    5. It would stimulate the market for new services. For the commercial sector, it would provide the opportunity for greater parity with the BBC national services, since FM is full, no more national FM stations are possible, and currently there are no commercial digital stations at national level, .

    What are the industry arguments against switchover?

    1. The cost - Parts of the commercial radio sector – especially those currently only broadcasting in analogue format – see no need for a total switchover to digital radio which would impose a cost that to them is unnecessary. Building a local network of DAB transmitters (and improving national coverage) is expensive. Ultimately stations will have to bear some of this coast, so they need to consider if this is economically viable.

    2. Coverage issues - In the vast majority of cases the type of geographical coverage provided by local multiplexes (typically county-wide) will be very different from the licensed area of local stations, so will require a shift in their sales operation, business model and most likely their output.

    3. Limited consumer demand - There is little evidence that radio listeners are converting in large enough numbers to digital listening to make the prospect of a switchover desirable for all stations.

    What are the consumer arguments for switching to digital radio?

    1. It provides better sound. At least, this is the strong claim of the industry, although some listeners dispute this. In an independent survey of current DAB users, 85% rated the sound as clearer. Certainly there is none of the hiss and crackle one often has with analogue radio because with digital radio the signal is either very good or not available at all (unlike analogue radio where the signal strength gradually deteriorates over distance), so reception is clearer on digital.

    2. It provides more choice. As well as the FM and AM stations that one receives on analogue radio, there are a range of digital-only stations - both BBC and commercial - offering especially more choice of music and sport. Currently, in most areas of the country, there are around 20 such additional stations. Also a digital radio enables UK consumers to access the BBC World Service.

    3. It offers more functionality to most consumers (blind and partially sighted consumers do not gain these benefits). Tuning is by name and not frequency with an electronic programme guide; live text is available giving information such as the name of the music and artist; and on selected models of digital radios one can pause, rewind and record and experience what is called visualisation (typically pictures or video).

    4. It enables the provision of hybrid radios such as those using Wi-Fi for text and graphics.

    What are the consumer arguments against switchover?

    1. We are well short of the 50% of radio listening on digital platforms which the Government has set as a trigger for switchover and growth in listening on DAB radios especially is growing only slowly.

    2. Switchover to DAB would make largely obsolete all analogue radios (only local & community stations would still be accessible) and require consumers to purchase new DAB radios and be especially problematic for vulnerable consumers and car owners.

    3. Switchover to DAB would make largely obsolete all analogue radios and require consumers to dispose of their analogue sets in a legally and environmentally acceptable manner.

    4. It can be argued that the claim of better sound is over-sold. Much radio listening is background when sound quality is not so important and many radio listeners cannot tell the difference between FM and DAB in terms of quality. There is, however, a small minority of "audiophile" consumers who do not consider that the sound quality available from the current DAB technology is satisfactory.

    5. It is argued that the extra choice provided by digital radio is not particularly wanted or appreciated because consumers are very satisfied with analogue radio offering and the new digital stations have very limited offerings. Some point out that before digital television consumers claimed to be content with the then existing television choice, but others highlight that there are far more analogue radio stations available in most cities than the five analogue television services that were provided on analogue television.

    6. It is argued that so far the extra functionality is of limited attractiveness and use to the consumer. Indeed some consumers find the functionality of digital radios worse than on analogue radios.

    7. The vast majority of models available are less usable than analogue radio for some disabled users. For instance, those with visual impairments find it difficult to navigate the radio because of its reliance on on-screen information and menus. This can be remedied by the provision of text to speech output for on-screen information, but currently no manufacturing plans for this type of solution are known.

    8. As it is new technology, many older and some disabled people will need assistance to learn to use it.
    What's happening in vehicles?

    What would be the environmental impact?

    As regards usage of digital radios, if you buy a new digital radio today and compare it to a similar analogue product, it will be more efficient. There is no longer any investment going in to making FM radios more energy efficient, but substantial R&D investment is being made to continue improving the efficiency of digital radios. It is claimed that listening to a typical DAB radio all day long consumes less power than boiling a kettle for a cup of tea.

    A recent independent study funded by DCMS (May 2011), which compared the energy efficiency of 57 models of digital and analogue radios, showed that digital products were more efficient on stand-by. It also showed that, for example, the average in-use power consumption of portable DAB radios had improved by 33% in just one year compared to only a marginal improvement in analogue.

    As regards disposal of old radios, not all analogue radios will have to be disposed of. In many cases, radio is embedded into another device, such as a CD player or stereo system, and those devices will not be disposed of as they are used for other purposes. Furthermore, FM radios will still be able to receive the community and small local radio services still on FM.

    But for those people who do want to replace their radios, it is hoped that the environmental impact will be minimized through responsible disposal and recycling. The infrastructure and facilities for this are already in place under the Waste Electrical and Electronic Equipment Directive (WEEE Directive) which requires manufacturers to pay for the sustainable recycling and re-use of electrical goods.

    As regards transmission, digital uses much less power than analogue services. Figures from network operator Arqiva show that transmitting nationally via DAB uses less than 6% of the electricity of transmitting the service via FM. For local and regional radio services, digital radio uses around half the electricity per service compared to FM.

    What are the options for a switchover timetable?

    1. Retain current arrangements with dual analogue and digital transmission which would mean most transmission would remain on FM with digital as a supplementary marketplace for the forseeable future
    2. Switchover of all national and most local services (except for very local radio)
    3. Switchover of all national and some local services (e.g. in largest cities)
    4. Switchover of all national radio to DAB but retention of all FM local radio
    Option 2 would appear to be the Government’s favoured position at this point (although there is no indication of which services would remain on FM and the criteria). If this option is pursued, there are a number of possible ways in which a decision could be made: Whatever the date decided there are further sub-options: One more consideration is whether to switch all stations at once or (as with television) switch some stations before others. There would be a case for switching AM stations before FM stations as a 'push' to consumers.

    How would switchover happen?

    This has not been decided but the industry is discussing a programme involving three phases with different parts of the UK included in one of the three phases, the whole programme taking perhaps three years.

    Even after switchover, there would remain some radio stations broadcasting on analogue: small local and community stations using FM (probably roughly 200 out of a total of around 300).

    How much would switchover cost and who would pay?

    The cost of transmitters for local coverage build-out from 2012-2017 is budgeted at £21 million (compared to £700 million for switchover of television). Both these figures exclude costs of marketing and the Help Scheme. This would be in addition to the costs of continued analogue transmission.

    In July 2012, a Memorandum of Understanding was agreed providing for an equal three-way split of costs between the BBC, the multipex operators and Government. This is not a legally binding document and a legal agreement will now be negotiated. In both cases, the period covered is until March 2017 when a new BBC licence free settlement will come into operation.

    This sort of arrangement would only last until switchover. From then onwards, the industry would be expected to fund the extra costs of digital transmission from the savings generated by the closure of analogue transmission.

    The basic cost to the consumer will often be higher than for television DSO. Instead of buying a set top box for around £40 for a television, every radio will have to be replaced. While this could also cost £40 per set, a like for like replacement will be more.

    Who decides and who advises?

    The DCMS Secretary of State Maria Miller will decide on the advice of Minister of State Ed Vaizey and after consultation with other Government Departments.

    There are four advisory groups to the Department's Programme Management Team:

    1. Technology & Equipment Group – chaired by Laurence Harrison of DRUK (CEG members: Leen Petre and Margaret Grainger)
    2. Market Preparation Group – chaired by Jane Ostler of DRUK (CEG members: Tim Leech and Margaret Grainger with Robert Clark as substitute)
    3. Government Radio Policy Group – chaired by Jon Mottram of DCMS (no CEG members)
    4. Coverage & Spectrum Planning Group – chaired by Peter Davies of Ofcom (no CEG members)
    The Consumer Expert Group (CEG) has been appointed by the DCMS Minister Ed Vaizey to advise him on a consumer view of switchover issues. The Chair is Roger Darlington and the Vice-Chair: is Gretel Jones.

    The organisation representing industry interests is Digital Radio UK (DRUK) which is 50% owned by the commercial sector (the three largest private radio groups plus the RadioCentre), 40% owned by the BBC, and 10% owned by Arqiva (which owns the transmitters). There is Board representation from the set manufacturers (Intellect) and the car manufacturers (SMMT). The Chief Executive of DRUK is Ford Ennals.

    The main manufacturers of digital radios are Roberts, PURE and Sony.

    What conditions need to be met?

    The Government has said that a decision to switchover will not be taken until two conditions are met:

    1. 50% of radio listening is digital - The rate of growth has been both slower than projected in the "Digital Britain" report of June 2009 and slower than desired by the industry which would have liked to achieve the 50% figure by the end of 2015. At the current annualised rate of growth of around 13%, the 50% level will not be reached until early 2016. The industry would need to boost the growth rate to a bit over 16% a year to hit a 35% figure by late 2013 (when a Ministerial decision is expected) and a 50% figure by the end 2015.

    2. National DAB coverage is comparable to FM (that is, 98% of the population) and local DAB reaches 90% of the population and all major roads. In the summer of 2013, there will be delivery to DCMS by Ofcom of a provisional Technical Switchover Plan and a provisional Switchover Implementation Plan.

    Note: In its September 2010 report "Digital Radio Switchover: what is in it for the consumer?" the Consumer Expert Group (CEG) proposed that the take-up test be based on DAB listening only, rather than all digital listening, and that "a digital switchover date should only be announced when no more than 30% of listening remains on analogue".

    What might stimulate a faster take-up of digital radio?

    1. A strategic communications campaign - Digital Radio UK is running a two-year campaign of this kind which started in December 2011.
    2. More national digital-only stations offering new or niche content - Suggestions have included dedicated country, folk and world music, a dedicated children's station, a 24-hour news station, a comedy offer, and non-English stations.
    3. Digital radio as standard in new cars - This is planned from 2013.
    4. A digital radio certification or tick scheme at the point of sale - This would be similar to the approach for digital television sets and is intended to be ready by the end of 2012.
    5. Government announcement of a firm commitment to switchover - This is likely in the final quarter of 2013.
    6. Government announcement of actual dates for switchover - This is unlikely until sometime in 2016.

    What is the timetable for switchover?

    There is none yet - but a possible timetable might be as follows:

    Early 2013 - Negotiations on a legally binding Framework Agremment on the funding of build out

    Summer 2013 - Delivery to DCMS by Ofcom of a provisional Technical Switchover Plan and a provisional Switchover Implementation Plan

    Autumn 2013 - Framework Agreement becomes legally binding

    Autumn 2013 - Government announcement on commitment to switchover and transmitter build out

    Mid 2013 - Launch of a certification scheme for digital radios

    June 2015 - General Election

    Early 2016 - Decision to switchover in two years time

    2018 - Switchover of block one: England

    2019 - Switchover of block two: Wales

    2020 - Switchover of block three: Scotland and Northern Ireland

    Who would need assistance with switchover?

    Blind and partially sighted people, some other disabled groups, and older people will not be able to manage switchover without assistance.

    In the case of digital switchover of television, there was a Help Scheme funded by an addition to the BBC licence fee. There will need to be a similar Help Scheme in relation to digital switchover of radio.

    What is the future of FM?

    Unlike switchover for television, when the analogue signal was switched off, in the case of radio we are talking about a switchover rather than a switch-off because there will still remain analogue radio broadcasting on FM. Indeed it is Government’s intention that a post-switchover radio market would include a strong tier of small-scale local radio on FM. This tier of radio would be a mix of community and commercial radio and would have a specific focus on the delivery of locally produced content.

    In Ofcom’s 2009 consultation "Radio – the implications of Digital Britain for localness regulation", the regulator set out a number of options for determining which services could remain on FM without risking the integrity of any future switchover programme. Of the options presented, the Government’s preference is to allow stations with Measured Coverage Areas (MCA), the local area in which a local licence is expected to be available which is smaller than 40% of the coverage area of the relevant local multiplex or multiplexes of which it overlaps, to remain on FM. In fact, a number of stations are technically ‘small’ but on DAB already and a number are operating in areas where there is not yet a local multiplex operating.

    The proposal for a cut-off is currently the subject of consultation and, if implemented, would probably mean that some 100 radio stations - out of the 300+ - would remain on FM. The Government's decision on the future of FM is due to be announced in the Communications White Paper expected in summer 2013.

    What about DAB vs DAB+?

    DAB is a technology currently used in the UK for for digital radios and proposed for digital switchover of radio, but many other countries are using or planning to use DAB+ and it is likely but not certain that at some point in the future the UK will upgrade from DAB to DAB+ which would involve some services being broadcast in DAB+ format.

    A dormant AACv2 decoder for future DAB+ services installed in a receiver sold today but not used because of a lack of DAB+ transmissions would still attract the royalty defined in the licence agreement. Therefore it is proposed that the minimum receiver specification (MRS) for digital radio provide that such radios be upgradeable to DAB+ but not necessarily already upgraded for such services.

    From a consumer point of view, there are no major benefits of DAB+ over DAB. However, if DAB+ could be used to increase significantly the bit rate used per service, this would improve the sound quality. Also, since other European countries seem likely to adopt DAB+ for their digital switchover, it would make the use of digital radios across Europe easier.

    From an industry point of view, however, DAB+ makes more efficient use of spectrum, allowing something like two and a half times more stations for any given slice of spectrum, so transmission costs are significantly lower.

    DAB+ would not replace DAB so there would not be a further switchover; instead DAB+ services would supplement existing DAB services.

    Upgrade from DAB to DAB+ could be:

    1. by building in the capability to DAB sets out of the box
    2. by downloading software from a web site
    3. by installing software through a USB stick
    4. by taking one's set back to the retailer
    5. by sending one's set back to the manufacturer

    What would happen if there was no switchover?

    The current licensing arrangements - which effective tie the industry into digital transmission - would need to be unravelled which would probably require primary legislation.

    By the time of any such decision, the BBC would probably have completed its investment programme on transmitters but it would probably cut back on its investment in digital programming.

    The national commercial multiplex (Digital One) would most likely continue but the investment in local commercial multiplexes would be more mixed. Indeed the case for continued investment in local multiplexes and transmitters would be difficult to sustain in most areas.

    Some basic data

    Value of UK radio sector - £1.1 billion

    The set universe is estimated by Ofcom at being 100M-113M. This estimate is roughly in line with DCMS presumptions of roughly 2.2 sets per household, as many households may contain more sets but do not use them.

    Share of UK radio set market:

    1. Roberts 34%
    2. Pure 28%
    3. Sony 10%
    4. Philips 5%
    Each week:
    - around 90% of population listen to radio
    - over 1 billion hours of listening

    Amount of radio listening in cars: about 20%
    Proportion of cars with a digital radio: 4.5%

    National coverage of digital:

    Local coverage of digital - 66%

    Penetration of digital radios as measured by RAJAR (first quarter of 2013):
    16 million DAB digital radios sold since 2000
    Household penetration: 44.3% (23 million adults)
    Proportion of radio sales which are DAB: 39%

    Penetration of digital listening as measured by RAJAR (first quarter of 2013):

    Links:
    Government's Digital Radio Action Plan click here
    DCMS consultation on methodology for cost-benefit analysis click here
    DCMS commissioned consumer research click here
    DCMS commissioned energy consumption research click here
    Ofcom consultation on DAB coverage click here
    Digital Consumer Expert Group click here
    CEG report on digital radio switchoverclick here
    Digital Radio UK click here
    Radio Centre click here
    Guide to choice of digital radios click here

    ROGER DARLINGTON

    Last modified on 16 May 2013

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