Has radio blown the future?

Australia got a policy about digital radio in 1998, but no digital radio services. Then it got another policy in 2005. In January next year, it will finally get digital radio services, 14 years after the UK. But one of the biggest commercial radio operators there has just announced it is quitting the medium. In its view, Digital Audio Broadcasting [DAB] “is not an economically viable platform for the Company”.

Some are interpreting this as a dreadful vote of no confidence in digital radio by a commercial organisation uniquely placed to understand its possibilities and pitfalls. Others are suggesting the company is jumping just as digital radio is finally starting to work.

The UK is not the only market having problems. In Canada, where services started in 1998, the communications regulator concluded a year ago that “the adoption of the new digital radio technology by consumers and the switch-over by the radio industry to digital is now effectively stalled”. Some digital stations had ceased operations, the extension of services had halted, and promotion of them was token.

Across the border in the United States, two operators have been fighting for subscribers to digital radio delivered by a mix of satellite and terrestrial transmission. Charging $US12.95 a month each and offering a total of more than 300 channels, they’ve both been growing rapidly, and now have more than 8 million subscribers each. But they are losing a fortune (one just announced a loss of $US565 million for 2007) and are planning to merge if regulators will let them.

What went wrong with radio’s digital future? And should Australia’s radio stations, currently investing millions of dollars to embark on their own DAB mission, be worried?

When Australia’s policies about digital TV and radio were released in March 1998, the two were treated like urgent, overdue twins as the Dot Com boom approached its zenith. All media were going digital. TV and radio would have to be part of it.

Existing broadcasters would get extra spectrum to introduce digital services alongside their continuing analogue ones. They also got a guarantee of no more commercial competitors for several years. Analogue services would be shut down sometime in the future. The spectrum would be handed back and reallocated for new kinds of service, although that expectation was much more clearly stated for TV than for radio.

Free-to-air digital TV services started on time in 2001. Digital radio dropped off the agenda. Commercial stations couldn’t see where the extra revenue was going to come from to pay for the transmission infrastructure. The ABC couldn’t imagine a hostile government giving it more money for anything. Non-profit community radio stations were flat out paying for the technology they already had.

Audiences, however, got new radio services without the need for digital transmission. Since the early 1990s, about 100 new commercial stations, 200 community stations and more than 250 special interest “narrowcasting” services have been licensed to use mainly FM frequencies. The ABC and SBS established new networks and expanded existing ones with hundreds of new transmitters. These operators all had an eye on the prospect of digital transmission, but were more worried about making their new analogue stations successful.

Doing without digital radio didn’t mean Australian audiences had to do without new digital listening choices. The Internet increasingly delivered streamed and podcast audio files from anywhere in the world to personal computers and portable MP3 players. This was a boon for the creators of music and talk as well as the listeners, although it presented profound challenges to music and radio industry incumbents.

The radio industry was terrified of an audio future where radio is much less central, and where someone other than incumbent radio broadcasters might be allocated the spectrum they want to keep available for digital transmission. Some radio broadcasters particularly feared the emerging powerhouse of broadcast transmission in Australia and the UK, Macquarie.

In 2005, the Government announced another policy about digital radio. It gave the commercial industry most of what it wanted. From January 1, 2009, listeners in Sydney, Melbourne, Brisbane, Adelaide, Perth and Hobart should be able to tune in to digital radio services. They’ll start asking themselves the same question broadcasters have been asking for a decade-and-a-half: why would you want it?

Publicity material in the UK highlights five reasons: "No Hiss and Crackle, Spoilt for Choice, Tuning Without Numbers, Stay Tuned and Read All About It."

That means better quality sound; new digital-only stations; the ability to identify stations on the radio dial by name instead of frequency; single frequency networks for national stations so you can stay listening to the same station on a long drive without having to locate different frequencies in different areas; and extra textual information, like song titles and artists, displayed on a screen.

This has been enough to sell 6.5 million digital radio receivers, roughly one for every ten people in the UK. Half a million were sold last December alone. Those who listen to digital radio are big radio consumers, listening on average to five hours more radio each week than analogue listeners. About 9-10 per cent of all radio listening is now digital radio, although less than half of that is digital-only stations.

The optimists say the medium is now developing well after a slow start. A second national commercial operator has been licensed to deliver a further ten national stations, and unsurprisingly is much more upbeat. Led by television broadcaster Channel 4, it will launch in the northern summer and promises “to put radio back where it belongs - at the heart of a multi-media, multi-platform UK”.

It is harder to find such optimism in Canada. The local terrestrial broadcasters’ digital radio services have had to compete with the US subscription satellite services offering many more channels and able to be received along the highways connecting the cities as well as in the cities themselves.

Canada chose the same European transmission standard as the UK, but is using higher L-band frequencies than the VHF-band frequencies being used in the UK. The signals don’t travel as far and different receivers are required.

Then, several years after Canada’s services started, the United States’ decided to adopt a completely different, incompatible transmission standard for its terrestrial services. Canada has now decided to authorise services using the American standard as well, although broadcasters like the CBC who have already invested heavily in the European technology are worried about interference.

Australia has gone to school on these overseas experiences. Introducing legislation to implement the scheme last year, the minister said digital radio “may never be a complete replacement” for analogue. The European transmission standard was adopted and VHF frequencies will be used - the sliver between TV channels 9 and 10 known as 9A. The version of the standard chosen will be an upgraded one, DAB+, which allows two to three times the number of stations to be transmitted and more sophisticated multimedia content.

All the existing commercial stations are being given capacity of 128 kbits/sec to introduce a digital service (one ninth of the capacity of a “multiplex” transmitter). Some might get more, depending on the numbers of stations in different cities. The ABC and SBS will share a total capacity of about 1.15 Mbits/sec - a full multiplex - in each city. City-wide community stations will share 512 kbits/sec in Brisbane, Sydney and Melbourne, and half that in Perth, Adelaide and Hobart.

Broadcasters will not have to simulcast their existing service. On the contrary, the previous government emphasised the need for new services and enhancements to encourage the sale of digital receivers. The commercial sector says individual stations will decide how they will use the new technology, stressing the potential to offer “everything from ‘rewind radio’ to real time traffic images and downloadable songs”.

The idea is that the most listened-to parts of the existing radio industry will all use digital transmission to offer a range of compelling new audio content in the new year.

Some of Canada’s problems, however, will be Australia’s as well. Launching the services only in the state capitals means drivers will have to switch back to AM or FM as soon as they leave the city limits, say, on a drive to the Gold Coast from Brisbane or to Canberra, Newcastle or Wollongong from Sydney. There’s to be an inquiry about digital radio in non-metropolitan areas by 2011, and there’s a strong hint that a different technology might be required there. That complicates the decisions for manufacturers of radio receivers and cars.

There’ll be No Hiss and Crackle, but for many Australians, there’ll be no signal at all. Even in the areas covered by the initial launch, there are big questions about the consistency of signal coverage. There’ll be no satellite digital radio service, at least initially, although WorldSpace, which already runs a global satellite radio business with about 180,000 subscribers and uplinks to its Asian satellites from Melbourne, is “in active discussion with local partners”, according to the Vice President - Regulatory and Operations at its AsiaSpace subsidiary, Les Davey.

The six-year moratorium on new commercial competitors applies only to terrestrially-delivered services. Davey hopes it may be possible to use software upgrades to adapt receivers to handle different radio broadcasting technologies, although this will not be possible if the receivers do not already have suitable tuners designed for the frequency bands used by additional services, or are designed for a single technology only.

Spoilt for Choice? Hardly. The ABC has dig Radio, dig Jazz and dig Country already available online and via digital TV, able to be flicked on for terrestrial digital radio audiences. A lot of material created for Radio Australia only gets to Australian audiences via the Internet. But most new services from the national, commercial and community sectors are going to cost money. The cash for this content will need to be found on top of the tens of millions of dollars already being found for the infrastructure to get digital radio just to the state capitals. And the capacity available from Channel 9A won’t even accommodate all the existing city-wide community stations, much less the 100+ channels that satellite subscribers in North America have signed up to at loss-leading prices.

Tuning Without Numbers? Some FM stations already transmit this information if you have a receiver that can read it.

Staying Tuned to national networks? That’s an issue for the ABC and the SBS, but not for the commercial and community stations.

Read All About It? While you are driving? Showering?

Rewind and record? It’s called an iPod or an MP3 player.

Radio’s question is not whether the future will be digital. The present already is. Nor is it, apocalyptically, whether radio will survive. It will probably thrive, though as always, it will change. The question is a pretty mundane one: how much will a particular kind of digital radio future cost and will listeners who already inhabit a digital audio world think the benefits are worth it?

The delays about digital radio in Australia over the last decade have been entirely understandable. The business case has been highly speculative; the overseas experience intriguing but largely catastrophic. The price of that delay, however, is that a big part of the audio future has been built by people other than radio broadcasters. The danger for radio now is that audiences will judge the digital services launched next year not excitedly, against the standards of AM and FM services they are meant to enhance, but, quizzically, against the standards already established by online and portable digital audio.