MEDIA SPOTLIGHT ON: DIGITAL RADIO - Will consumers see the point of the digital radio revolution? Any investment in digital may not result in greater profit, Alasdair Reid says

The BBC has been transmitting digital radio since 1995. That’s another one of those ’not a lot of people know that’ little gems. The BBC has obviously been keeping quiet about it because no-one can receive digital.

The BBC has been transmitting digital radio since 1995. That’s

another one of those ’not a lot of people know that’ little gems. The

BBC has obviously been keeping quiet about it because no-one can receive

digital.



The receivers aren’t on the market yet - it’s what’s known in the trade

these days as a ’soft launch’.



Last week, though, we moved a step closer to a slightly less flaccid

launch when the BBC announced that it had persuaded five companies to

begin building and marketing digital receivers. Sets should go on sale

sometime in the autumn and the BBC will set the digital bandwagon

rolling (it hopes) with a digital awareness day on 9 July.



Is it time to get excited about digital radio? BBC Radio clearly wants

us to think so - but last week, there were some very mixed signals from

the corporation’s commercial rivals. Capital continued its confusing

Hokey Cokey dance with digital by confirming that it was talking with

Emap about possibly bidding for local digital licences. A couple of

weeks ago, Capital was ruling digital out (no prospect of revenue in the

medium term); next week, the company will no doubt plump for the ’shake

it all about’ option.



Meanwhile, Ginger Media Group was ruling it both in and out. While the

group is withdrawing from the Digital One consortium which will bid to

run national digital services, GMG confirmed that its Virgin station

will still take up its place on the main national digital multiplex.



So, confusing signals there. But what about the advertising

industry?



Is it getting excited? Derek Morris, a founding partner of Unity, agrees

that the BBC agreement with manufacturers is good news but it isn’t

exactly an excuse for dancing in the streets.



’Whatever forecast you look at, the conclusion has to be that this will

be a long time coming. The key to this is the hardware. If you could buy

a digital radio for pounds 25, it would happen. I keep looking for the

consumer benefit. More channels, yes. CD quality - and apparently the

signal won’t be disrupted when you go into tunnels. But what it comes

down to is clearer Chris Tarrant. I might be willing to pay pounds 25

for that, but not pounds 250.



’With satellite television, they may have been asking pounds 200 but in

return I could get football. Digital radio might be able to provide

added value information services, but by the time it’s ready, other

technologies - like mobile phones - will be providing that sort of

service.’



And there’s an equally pertinent question: when did you last buy a

radio?



The answer is that you’ve probably never bought a radio. Not a radio

and, as they say in financial services commercials, nothing else. You

may well have acquired one when you bought a car or a new sound system.

You may even have been given a gimmicky radio as a public relations

freebie. But the point is that they are hard to market. And the other

thing about radios is that we don’t throw them away when we get new

ones. They just accumulate until there’s one per room - including the

wireless (valves, bakelite, Hilversum on the dial) that Auntie Ethel

left in her will.



Many believe that the greatest driver (no pun intended) will be that

luxury cars will soon have digital radios fitted as standard. But even

if that does stimulate the home market, there will still be a massive

amount of non-digital radio listening for decades to come.



’This is a very long-term proposition,’ Tim Schoonmaker, chief executive

of Emap Radio, admits. ’It will be five years before there is a

reasonable number of sets out there. We’re talking to everyone because

if there is any chance at all of this going anywhere, we have to be with

it. But at the moment there’s no revenue in our digital business plan -

only cost.’



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