Media: All about ... The second DAB multiplex
By Alasdair Reid, campaignlive.co.uk, Friday, 13 April 2007 12:00AM
4 Digital Group and National Grid Wireless face off.
All radio licence bids contain a certain amount of wishful thinking. You'd feel a right fool, after all, if you failed to blow your own trumpet anything less than forcefully - and a little creative licence can be forgiven when you're aiming to reinvent the medium.
As such, the bid document from National Grid Wireless for the second national digital radio multiplex licence is a cheeky little classic of its kind. NGW, in its proposed station line-up, has included two services from Channel 4 Radio.
But Channel 4 just happens to be the lead shareholder in 4 Digital Group, NGW's only rival in bidding for this licence - and Channel 4 says it has not discussed any such service, nor does it know whether it could supply them, whatever they are, in the event of NGW winning.
Meanwhile, although Channel 4 admits it has a limited track record in radio (it launched its on-demand radio website, channel4radio.com, less than a year ago in June 2006), its ambition is to "reinvent radio for the 21st century".
We'll soon see - if it wins. But the strangest thing about this latest licence giveaway is the absence of the usual hullabaloo and hoopla. There are, perhaps, good reasons for the muted coverage. First, the gloss has come right off commercial radio - in revenue terms, it has been in the doldrums since the GCap merger started to go wrong in the autumn of 2005. What's more, audiences are static and, from an advertising point of view, creative standards have stagnated.
Second, the whole notion of digital radio has failed to sustain the buzz it created a couple of years back when portable DAB hit the mass market. Music journalists have even been criticising the sound quality of DAB - often no better than FM, they insist. And the industry is still struggling to convince car-makers to fit DAB as standard. One way or another, the digital radio marketing message hasn't been getting through.
1. The first commercial national digital audio broadcasting multiplex was awarded to Digital One, a joint venture between ntl and GWR, in 1999, and led by long-term digital radio evangelist, the GCap executive chairman, Ralph Bernard. In exchange for making this early investment commitment, Bernard thought he had been given an effective monopoly on national commercial DAB for the foreseeable future, so he was enraged when, in a surprise announcement in October 2005, Ofcom announced that it was seeking bidders for a second multiplex of ten new national DAB stations. He threatened legal action, but desisted when he received assurances from Ofcom that the new multiplex would offer only complementary services to those already carried on Digital One.
2. The two benefits of DAB are (supposedly) improved sound quality and, in squeezing more out of the broadcast spectrum, space for more services. This, it was hoped, would encourage the emergence of new formats. Digital One includes (alongside the likes of Classic FM, Virgin Radio and talkSPORT) stations such as Core, Capital Life, Oneword, theJazz and Planet Rock. The BBC, which has also invested heavily in DAB, has launched 1Xtra, 6Music and BBC 7.
3. The 4 Digital Group consortium has the following shareholders: Channel 4 Radio, 55 per cent; Sky News Radio, 10 per cent; Emap Digital Radio, 10 per cent; UTV Radio (GB), 10 per cent; The Carphone Warehouse Group, 10 per cent; UBC Media Group, 5 per cent. Its innovative content ideas include a radio version of Emap's Closer magazine and a children's service supplied by Walt Disney International. The consortium is headed by its chairwoman, Nathalie Schwartz, a former strategy and development director at Capital Radio.
4. Days after submitting its bid by the 28 March deadline, National Grid Wireless was acquired by Australia's Macquarie Bank in a deal valued at £2.5 billion. Macquarie owns the UK broadcast infrastructure operator Arquiva, a shareholder in Capital One. The NGW bid has been guided by its senior adviser David Mansfield, a former GCap chief executive.
5. NGW's proposals include: a station from London Christian Radio, an as-yet-undefined offering from Radio Luxembourg and Fun Radio from Children's Radio UK. Plus, of course, the phantom Channel 4 offerings.
6. Having assessed the submissions, Ofcom will award a 12-year licence in July.
WHAT IT MEANS FOR ...
- The medium needs all the help it can get and the new multiplex licence award process should be seen as an opportunity to market commercial radio in the broadest sense possible.
- In theory, the emergence of a new wave of national radio brands should help commercial radio renew its battle with the BBC on more favourable terms. After all, the medium's last great leap forward came in the 90s when the commercial sector acquired three national analogue brands - Virgin, Classic and what is now talkSPORT.
- But Bernard's threat of legal action still casts a shadow over this whole process and makes some observers wonder whether the commercial radio sector currently has the confidence to make the most of this latest opportunity.
- These days, the advertising industry sometimes seems more optimistic and enthusiastic about radio's future than the media owners themselves. And in this particular case, they are particularly excited at the possibility of Channel 4 widening its radio interests.
- As Mark Middlemas, a managing partner at Universal McCann, puts it: "Yes, I'm very much hoping Channel 4 wins. There's absolutely no doubt that it has access to ground-breaking content and talent - and the commercial sector has been crying out for a credible non-music avenue."
This article was first published on campaignlive.co.uk
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