There are some ferocious optimists in digital radio. You could
argue that this almost goes without saying - but they're a feisty bunch
alright.
When you put a mischievous question such as "Will digital radio be
cancelled due to lack of interest?" to them, they don't laugh. There's a
sharp intake of breath, a worrying silence, and then they begin giving
you a more or less friendly ear bashing.
"Where does that come from?" Quentin Howard, the chief executive of
Digital One, GWR's digital radio joint venture with the cable company
ntl, responds. "That sort of doom and gloom is just absurd. It's like
saying ..."
There then follows an elaborate analogy drawn from the long history of
technologies that faced an uphill struggle yet triumphed in the end.
Howard settles on air travel but he could have chosen old-fashioned
cat's whisker wireless sets, television, the motor car, computers,
dishwashers or the internet. Many of his colleagues plump for the
internet. You not only have to be an optimist to be in digital radio,
you also have to be good at analogies.
But here's a thing. This year's "digital radio Christmas" has already
been cancelled. There are, at the time of writing, just over 40,000 bits
of digital reception kit out there in the UK market. About 15,000 are
Psion Wavefinders, which you have to plug into your PC, and the other
25,000 are either hi-fi tuners or car radios. Unless you have a very
strange domestic routine, you can't listen to digital while brushing
your teeth in the morning because there are no portable sets (the
equivalent of analogue "transistor radios) yet on the market.
Every few months there's a rumour that one of the big Japanese companies
is going to change everything with a stunning breakthrough offering.
This Christmas, sets retailing at £99 were due to flood the market
with heavy promotional backing. It's not going to happen - though many
sources are confident it might happen for Christmas 2002.
The car manufacturers are behind schedule too. It has long been argued
that even the humblest marque will "soon" have a digital car radio as
standard. But the commitments, such as they are, by the major
manufacturers have been ambiguous at best. It's not going to happen
until 2004 at the very earliest. 2006 is far more likely - and we're
still in optimist country.
"This is just not a valid argument," Howard counters. "There is
absolutely no doubt that we will have products in volume next year.
We're still in the early adopter phase but the products that are there
are selling out as fast as they can be made. The commitment of the radio
industry is there. It will happen."
Diane Wray is another conspicuous optimist. She's the marketing director
of MXR, a joint venture between Chrysalis Radio, Capital Radio, GMG
Radio, Jazz fm, Soul Media, UBC Media, Psion and Ford, which operates
four regional digital licences.
"We're very buoyant here," she says. "We've been launching stations over
the past couple of months so it's just been one positive development
after another. Now I think we're on the verge of something big, with a
new volume manufacturer about to open up the market and the BBC getting
its new channels agreed."
Ah, the BBC. This too is a classic response. Back in September, the
Government awarded five new digital licences to the BBC on condition
that it increased its efforts in promoting digital radio services and
equipment. Who better to underwrite the digital radio's marketing budget
than a recession-proof state broadcaster? On the other hand, you might
question the wisdom of anyone putting any faith whatsoever in the
ability of the BBC to deliver the future.
But Mike Spencer, the marketing director of the Digital Radio
Development Bureau, argues that all these factors add up. The DRDB
represents media owners but is staffed by people with backgrounds in the
consumer electronics business, so it has a grasp of the big picture.
Spencer believes that, for all of the reasons above, digital radio has
reached its "tipping point" - when a number of small factors combine to
spectacular effect.
"The sets are getting here. The thing is that digital radio is
contagious. It's like once you heard CDs there was no way you were ever
going to buy vinyl again. Its spread will begin to accelerate," he
argues.
Others are far more sceptical. Some believe that both the BBC and the
commercial sector have paid lip service to digital. They're only
pretending to do something because the Government has leaned on them. In
a recession, surely digital will be no more than a distraction.
Others point at woolly thinking. Jonathan Gillespie, the director of
radio at OMD, says he's far from alone in believing that the progress,
or lack of progress, is a concern. "For me, one of the most worrying
things is that the radio industry does not seem to have a workable
model. For instance, does it think it will be possible to ask people to
pay a premium for a service they've traditionally received for free?" he
ponders.
The business model question is one that even the optimists are finding
troublesome. John Naughton, the author and futurologist who now chairs
the Radio Advertising Bureau's digital wing, RAB-eye, uses an internet
analogy to argue that digital radio is an inevitable evolution. But even
he concedes that few in the industry have attempted to pin down a killer
application that will drive it forward over the short term.
He states: "Content is important in a push-based medium where a small
number of people decide what will be wanted and then pump it out.
Digital allows not just for the specialisation of content but for
interaction.
The trouble with both TV and radio currently is that they have no real
idea how to handle it when people speak back to them in real time. I
think we're already seeing the slow, painful and at times gibbering
decline of push media. But I don't think the current generation of media
owners will recognise that. We might have to see some biological leakage
before that happens."
Isn't this the crux of the matter? Isn't this a fundamental problem?
Not really, Howard responds . "I think all of this talk is premature, I
really do. Digital radio won't have just one killer application, it will
have several wounding applications. We've only just begun to scratch the
surface of its potential. Be patient. When digital radio comes, it will
blow your socks off," he concludes.
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