Change Is Exciting, Consequences Unnerving

Michael Hedges September 17, 2018 Follow on Twitter

Most media operators know that a key to success is staying a half-step ahead of the audience. Being a whole-step ahead, figuratively, risks confusion. People will seek familiarity. Following by a whole-step is worse. People will get bored and race to a more interesting alternative. Knowing where, exactly, that half-step is at any given moment is no mean feat.

Throwing off accepted digital canon German private broadcasters association VAUNET radio director Klaus Schunk declared, “DAB+ is no longer the sole digital future,” in a statement (September 11). “For a long time, our listeners have received digital radio through mobile apps or web radio, also increasingly with their smartphone.” (See edited VAUNET statement here - in German) DAB is the acronym for digital audio broadcasting, originally developed through the European Broadcasting Union (EBU) thirty years ago, and DAB+ is the 2007 upgrade. German private and public radio broadcasters have adopted, tacitly, a platform-neutral distribution strategy, every possible digital option in use, with little near-term interest in shutting down FM analogue distribution.

At the end of last year Media Broadcast, the primary German FM distribution supplier, effectively quit the business, selling the transmitters and antenna farms to five or six investor groups. A few months later the company indicated to private radio broadcasters the need to quickly contract with the appropriate new supplier. Broadcasters, understanding the new operators would raise the service fees, resisted. Media Broadcast, seeing a greater financial future in providing DAB+ and DVB distribution, threatened to simply shut-down the FM networks.

Herr Schunk has not forgotten. “The threat of a shutdown of the FM transmitter networks by their new owners must have consequences. It is unacceptable that constitutionally protected material will be at the mercy of economic interests. (New distribution service) owners should be required through the Telecommunications Act to ensure the operation of the transmitter facilities.”

A shift from FM to DAB (or DAB+) distribution for radio broadcasting, inevitably shutting down FM transmission, has been widely discussed in national legislatures, where the final decision would be made. Receiver manufacturers, seeing a whole new market, have encouraged this switch-over, automobile manufacturers not so much. German radio broadcasters, long unhappy providing - and paying for - multiple distribution systems, continue resistant to a government mandated switch-over.

“That simply does not work,” said Herr Schunk. “A change from FM to DAB+ makes sense only if the analogue radio use has actually dropped to less than 10 percent. The current development in Norway after the forced switch to DAB+ shows how a rushed political process can damage a radio market.”

Norway’s government mandated in 2016 a progressive switch-over of national radio channels. It was completed at the end of 2017. Local and regional stations are exempt until 2022. No other European country has mandated a switch-over except Switzerland, both Denmark and Sweden withdrawing from previous switch-over mandates.

The effect on listening levels from the withdrawal from FM distribution in Norway has been widely examined. By the time the Norwegian national channels vacated FM distribution the weekly PPM audience estimates from Kantar TNS showed slightly lower overall listening levels. It was expected that would rise as late adopters bought DAB receivers and automobile converters. By the first week of September, according to radionytt.no (September 12), listening levels had not returned to 2016 levels. Daily listener reach had dropped to 56.5% of the population from 69.4% in 2016. Radio channels of public broadcaster NRK, on aggregate, dropped to 37.1% daily reach from 49.0% in the same week of 2016.

Weekly PPM reach estimates are interesting but, in truth, inconclusive just six months into the Norwegian switch-over. What certainly gets the attention of all radio broadcasters is the rise of online and mobile distribution of audio products. The first Online-Audio-Monitor in Germany, produced by Kantar TNS for private and public broadcasters and released September 8, shows 58% of Germans using online audio services, among 14 to 29 year olds it is more than 90%.

“Trends such as podcasts and the smart speaker support this development and are tailwinds for traditional radio,” said Bavarian private media regulator BLM president Siegfried Schneider, quoted by radiowoche.de (September 8). “It is up to the creators of the radio continue to take advantage of these trends. The online audio monitor provides important information for future regulatory challenges media politics.”

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