The auction of third-generation mobile phone licences by the
Department of Trade and Industry and the Radio Communications Agency has
highlighted a potential side effect of the convergence of telecoms and
the web: digital radio could be smothered at birth by the growth of
While the licences ostensibly enable telecoms carriers to run
interactive services on phones, the potential for mobiles to become
internet radio receivers has not been lost on the industry.
The growth of internet radio has already been significant enough for
Radio Joint Audience Research to acknowledge its presence in its
quarterly survey this May - three years ahead of the date predicted by
Lee Roberts, acting sales director at Virgin Radio, comments: ’The
popularity of internet radio is growing all the time because the
capacity to use bandwidth is also constantly expanding. Compression
technology for streaming the voice data is improving and there is more
physical space available.’
Add to that the fact that there are no cost barriers to entry - you
don’t need a studio; a software package can set you up in minutes - and
the advantages over digital seem clear.
The benefits to advertisers are also obvious - consumers can surf the
internet, see the advertisement and hear the radio campaign all at the
same time. All in all, it’s enough to make you wonder whether GWR,
Capital and the others have been wise to spend millions of pounds on
digital radio multiplex licences.
Steve Cray, head of GWR’s Opus Digital arm, insists that the greater
proliferation of stations, better sound quality and the possibility of
masthead advertising mean that digital radio has clear advantages. But
then again, Betamax was a better video format than VHS.
In the battle for ’ear share’, internet radio will come into its own
when wireless access becomes more widespread. But if manufacturers and
content providers are already developing systems allowing consumers to
access digital music from the web via WAP-equipped mobiles, it should be
no great leap to stream radio through the same medium.
The high cost of internet access currently limits the number of
potential listeners. But if Alta Vista’s gauntlet of free access -
thrown down to BT last week - is anything to go by, that restriction
could soon be lifted.
As far as sales opportunities go, internet radio is up and running, with
an audience of early adopters begging to have advertisements aimed at
Digital radio, on the other hand, still has some way to go. With
receivers costing upwards of pounds 500 (the price of a web-ready PC)
and a lengthy wait before the analogue signal is switched off, it’s not
difficult to work out which option most people will take.