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ftm Radio Page - May 11, 2012

Spinning digital radio, future or else
“People buy a benefit, not technology”

A clear path to a digital radio transition has existed only in the eyes of a few. The logistics – not to forget the laws – have not come easily. And, pushing into a third decade of pushing digital radio, none of it gets easier.

The four horsemen of French commercial radio broadcasting – Lagardère’s Denis Olivennes, NRJ’s Jean-Paul Baudecroux, NextRadioTV’s Alain Weill and RTL’s Christopher Baldelli – have made no secret of their opposition to any speedy remedy to digital radio, particularly media regulator CSA’s plan to let the licensing begin. Last month the CSA opened digital radio applications for Paris, Marseille and Nice. Applications for digital channels in twenty more cities opened this week (May 10).

“There is no economic model (for digital radio),” said M. Olivennes in a group statement (May 9), quoted by Les Echos. “Nobody has proved that there is.” The four major French commercial radio broadcasters have a combined 53% market share. (See recent French audience survey trends here) What’s needed, say the big guys, is an economic impact study and another round of debates on standards.

And, too, “it’s strange,” said M. Baldelli, to go forward with these digital radio applications before President-elect François Hollande takes office. Out-going President Nicolas Sarkozy helped keep digital radio on the back-burner and M. Hollande has stayed out of the discussion except to note that French public radio hasn’t the funding to take on such a project.

“It is very unlikely that we will respond to this call for applications,” concluded M. Olivennes.

That digital radio has found scant success in other countries, audience shares are still tiny, is part of the argument posed by the big French commercial broadcasters for keeping digital radio on ice. In Germany, for example, broadcasters face a similar divide; public broadcasters favoring a push toward DAB+ and private sector broadcasters participating only tepidly. (See more on digital radio here)

At the Central German Media Conference (Medientreffpunkt Mitteldeutschland) in Leipzig (May 8) broadcasters and policy makers peered into the future, post-DAB. Because the FM band has been exhausted, said Bremen State Media Institute (Bremische Landesmedienanstalt ) director Cornelia Holsten, DAB+ is “certainly an interim technology.”

Platform doesn’t matter, said Deutschlandradio technical director Chris Weck, because it’s all about the money. Digital radio transmission costs, he said, about one-fifth that of analogue radio transmission.

“If newspaper publishing keeps going as it is, radio will be the last local medium, “offered Regiocast spokesperson Boris Lochthofen. “People do not buy a technology; they buy a benefit.” (JMH)

A non-linear model for pay radio
Different from FM

It’s possible that a subscription-based radio service will appear in France sometime in the next year. Onde Numérique president Franz Cantarano told Les Echos (May 8) more than 50 channels will be offered first via the Web then, if media regulator CSA approves, its on to the L band and nationwide 3G/4G coverage.  He’s looking for 4 million subscribers.

“We really want to differentiate ourselves from FM in the formats we offer,” he explained. “We want to go with formats the FM (broadcasters) cannot go with because they do not interest advertisers. The subscription business model gives us greater editorial freedom.” The plan includes linear streaming plus, for some channels, the more interactive pause, skip and fast-forward functions. Introducing subscription radio in France would compete with the yet to be discovered terrestrial digital radio. (See more on satellite radio here) (See more on digital radio here)

Whether or not radio by subscription is a viable business has challenged some of the toughest, smartest and most entrepreneurial minds. WorldSpace founder Noah Samara raised a lot of money, developed specialized technology, launched satellites and, after twenty years, gave it up. Cantarano was WorldSpace Europe director.

The two struggling American subscription radio services were allowed to merge and now, under the leadership of legendary US broadcaster Mel Karmazin, SiriusXM is considered quite the success. Spanish company Ondas Media made plans in 2007 for a pan-European satellite radio offering but recently abandoned the idea due to current economics. (JMH)

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