Radio: Radio’s Digital Future - Net surfers are already listening to digital radio on the web, though it will be some years before digital sets become commonplace, Richard Cook reports

Radio is finding its way into the digital world. Internet users are tuning into stations on their PCs and radio owners are investing in various forms of digital radio. It may not have launched with the same fanfare as digital TV, but with strong brands and a more flexible offering, radio could fit well into the new-media order.

Radio is finding its way into the digital world. Internet users are

tuning into stations on their PCs and radio owners are investing in

various forms of digital radio. It may not have launched with the same

fanfare as digital TV, but with strong brands and a more flexible

offering, radio could fit well into the new-media order.



None of the same conditions were in place for the launch of digital

radio last November as they were for digital TV. The Government is

committed to turning off the analogue service for TV within the next six

to ten years and operating companies have been subsidising equipment

costs for consumers. Digital radio sets are coming down in price but, at

a time when portable analogue sets can be given away in cereal packets,

pounds 500 or so still represents a considerable investment and one that

only the new technology early adopters are likely to take.



Prices of digital radios are falling faster than CD player prices when

they were launched in the early 80s, and the BBC has stuck its neck on

the block and forecast that more than two-thirds of us will have a

digital radio by 2008. That might err on the side of optimism, but the

digital multiplex licences do run for 12 years, and the operators are

confident that the digital platform will, by then, have transformed the

way radio is broadcast, if not necessarily the way people listen to

it.



’Digital radio will have near-CD quality sound and more information, but

it’s true that it will really only take off once the hardware is

miniaturised and integrated into other electronic goods,’ Quentin

Howard, the chief executive of the consortium, Digital One, explains.

’Manufacturers will build digital radio chips into Walkmans, PCs, car

stereos and mobile phones. I’ve seen prototypes - so imagine a world

where you can listen to digital radio over your mobile phone and you can

have interactivity.’



For many in the industry, digital radio will change little about the

complicated relationship listeners have with their sets. Digital radio

sets may look more futuristic but the same sonic brand triggers that

advertisers use now can still be employed. ’The screen on a digital

radio doesn’t mean that we are becoming a sort of lo-tech TV,’ Howard

stresses, ’just the same radio but with better sound and different

opportunities for listener competitions and for advertisers and so

on.’



James Smythe, the Radio Advertising Bureau’s project manager, downplays

the upheavals that many in the industry attach to digital: ’To be honest

I don’t think it has done us any favours calling it digital radio.

Because there is a misapprehension that digital involves a shift in the

way that people consume media. And that this shift necessarily involves

a change from a lean back to a lean forward medium. There aren’t going

to be dramatic changes in the way it is consumed or indeed in the way it

is planned and bought by advertisers. While there is a data capacity on

digital radio and screens, it doesn’t mean that the medium is going to

be a sort of dumb TV.’



Adam Smith, Zenith Media’s head of knowledge management, agrees: ’I’m

not sure that digital radio is going to have a profound effect on the

way the medium is consumed. Forms of multimedia have been growing up

around us for at least ten years and the young have lapped it up - the

same young people who have been tuning into commercial radio in

increasing numbers and who comprise a third of its audience.’



Other advertising luminaries have been at pains to stress the same

message, that radio is, to a large extent, insulated from the seismic

shifts of fragmentation that are predicted in other media. The RAB asked

the Institute of Practitioners in Advertising’s president, Rupert

Howell, to its conference on the future of radio at the end of last year

to help provide a corrective voice and guard against complacency in a

medium that was the biggest advertising share winner in the 90s. Howell

delivered an incredibly upbeat message, telling self-satisfied delegates

that radio was in fine shape and that other new-media developments such

as the internet were, in truth, opportunities for radio to grow still

further. That the internet, in other words, certainly didn’t represent a

real threat to the medium in the same way as it does to, say, the

newspaper market.



In fact there may be some confluence between the internet and digital

radio technologies. There is already some evidence that consumers are

happy with the idea of using their home computer for accessing the

medium despite the internet’s uneven quality. Recent research by the

specialist research consultancy, Continental, suggested that a third of

all UK online users had already accessed a radio station website and

that two-thirds were aware that radio could be listened to over the net.

And, although only 22 per cent had listened online when the survey took

place at the end of last year, 71 per cent said that they had heard a

radio station talking about its website on air.



Continental estimates that internet transmission of radio will grow at

such a rate that it would have to be included in the Rajar listening

diaries within the next couple of years. By then digital radio chips may

even be built into computers.



Radio stations are, indeed, taking the internet very seriously. They see

it as a way of introducing some of the potential benefits of digital

radio - such as interactivity and giving information on the band playing

the music or the track being played, or the product being advertised -

by having a website.



Chrysalis Radio, which has unveiled a pounds 31 million investment fund

for new-media opportunities, also has websites for its two Heart and

five Galaxy formats, and its five other stations. A deal with the

internet retailer, Yalplay, gives listeners the chance to buy tickets

and CDs online.



Virgin, which was a pioneer of internet broadcasting, has expanded its

services to deliver the same sort of interactivity and real-time links

to advertisers’ websites that will - in the future - become a staple of

digital interactivity.



According to John Ousby, director of Ginger Online, this has been the

breakthrough on the path towards new digital, and new interactive

digital services on radio. The infrastructure is now in place, he says,

to enable Virgin and the other major players to provide added-value

content to other outlets. This could happen through the use of wireless

application protocol - receiving digital radio through a mobile phone -

or through digital TV sets or conventional digital radio receivers.



BSkyB has opted to carry radio broadcasts on its Sky Digital television

service. Since November, 20 radio stations made themselves available to

Sky Digital subscribers and provided a sort of halfway house to full

digital radio. For the stations involved, the partnership enabled them

to offer listeners their first taste of the CD-quality sound which, in

the short term, will be digital radio’s best selling point. AM stations

such as Capital Gold, Virgin and TalkSPORT, whose medium-wave analogue

frequency has needed perseverence and patience from listeners, had the

chance to broadcast a national digital quality signal for the first

time.



This provided new digital channels a potential audience of some 1.8

million from launch. GWR, which took a leading role in setting up

Digital One with Talk Radio and NTL, has applied for a licence to

operate up to ten national digital radio channels. So far there is

Planet Rock, the soft rock station aimed at 35- to 55-year-olds, The

Core, a dance music station, plus a third GWR service called The Mix,

which combines 80s and 90s music with programmes such as Late Night

Love, which are already broadcast across the GWR analogue network.



The relationship between the commercial and publicly funded broadcasters

is also changing. With the advent of digital, commercial radio now has

six national stations against the five of the BBC. Commercial radio,

which already captures the bulk of 15- to 44-year-olds, is confident

that this age group will be the most responsive to digital.



’One thing I don’t think you will be seeing is subscription radio,’

Smythe says. ’The only area that might have been able to offer something

like that, which has become a staple of digital TV, is sports. But the

presence of Radio 5 will keep that from happening and the integrity of

the radio offering will be maintained.’ Only the delivery and the

reception will really be affected.



In the meantime, the pace will be almost stately. Emap, which will

operate the London licence together with Capital, says it doesn’t expect

to return a profit on this, arguably the jewel in the digital radio

crown, before 2005 at the earliest. By 2009, 40 per cent of the one

billion listening hours of all radio will be accounted for by digital,

the companies estimate.



That may be. Our progress there will be a slow and dignified one, as

perhaps befits a medium that didn’t need digital to re-invent itself as

the medium of the future.



OWNERS AND MAJOR RADIO HOLDINGS

Border Radio Holdings

Century, Sun

Capital Radio 95.8 Capital FM, Capital Gold

Network, Xfm, Life, Invicta

Chrysalis Radio

Galaxy, Heart FM

Emap Radio Kiss 100, The Magic Network, The Big City Network

Ginger

Virgin

GWR Group Classic FM, Classic Gold, The Core, Planet Rock, The Mix

Scottish Radio Holdings

Clyde, Downtown, Forth, Northsound, Tay, West Sound

The Wireless Group

The Independent Radio Group, TalkSPORT, Lite AM, Pulse, Valleys Radio,

Swansea Sound


TOP 10 STATIONS BY REVENUE FOR THE PERIOD JANUARY TO DECEMBER 1999

1   Capital 95.8 FM (London)       pounds 51,993,434

2   Classic FM (National)          pounds 38,141,402

3   Virgin 1215 AM (National)      pounds 20,191,027

4   Clyde1 FM (Strathclyde)        pounds 13,252,370

5   Talk Radio UK AM (National)    pounds 12,977,325

6   KEY 103 FM (Manchester)        pounds 11,870,321

7   LBC 1152 AM (London)           pounds 11,703,334

8   Heart London FM (London)       pounds 11,321,438

9   Capital Gold1548 (London)      pounds 11,244,262

10  Magic105.4 FM (London)         pounds 10,976,522

TOTAL for Top 10                  pounds 193,671,435



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Digital marketing executives oversee the online marketing strategy for their organisation. They plan and execute digital (including email) marketing campaigns and design, maintain and supply content for the organisation's website(s).