Commentary on the conclusions of a European Commission report published in 2002 that the benefits of DAB digital radio switchover prove "insufficient compared to its cost", written by Grant Goddard in May 2010 for Grant Goddard: Radio Blog.

1. EUROPEAN COMMISSION
REPORT CONCLUDED IN 2002
THAT BENEFITS OF DAB RADIO
"INSUFFICIENT COMPARED TO
ITS COST"
by
GRANT GODDARD
www.grantgoddard.co.uk
May 2010

2. European Commission Report Concluded In 2002 That Benefits Of DAB Radio "Insufficient Compared To Its Cost"
page 2
©2010 Grant Goddard
Sometimes it proves useful to take a look backwards to try and understand where you are
now. In 2002, a 236-page report was produced for the European Commission on the topic of
‘Digital Switchover In Broadcasting’ by BIPE Consulting. Re-reading it is a stark reminder that
the current problems with DAB radio implementation in Europe had been anticipated at least
eight years ago.
Firstly, the BIPE report admitted that a significant motivation for introducing DAB radio was so
that existing licensed European broadcasters could maintain market control in the face of
competition from IP-delivered radio content produced by pesky foreigners:
“Some radio broadcasters consider digital radio as a question of survival in the long
term … digitisation of content, transmission and multipurpose receivers could squeeze
out the possibility of having a dedicated radio platform with its own players, services
and listeners. The fact of having a dedicated [DAB] platform could maintain the
existing value chain. If not, alternative, third-party digital platform operators will enter
the game, and this could reduce radio specificity as it is understood today or even
break the radio business model.”
Many of the problems of implementing DAB were identified then:
“New frequencies have to be found to simulcast analogue programmes and new
expected ones (which is not the case with digital TV that can be simulcast in the same
bands); very high digital receivers prices create a chicken-and-egg situation; while pay
TV is a strong driver of TV digital migration, a pay-radio business model seems not to
be sustainable so far; RDS, data services and free-to-air multi-channel FM reduce the
attractiveness of digital radio.”
And the huge challenge of convincing consumers was made very clear:
“Analogue radio receivers are low cost devices offering numerous, free-to-air channels
and with FM audio quality. In this context, the benefits of digital radio as presented by
the DAB model so far are insufficient compared to its cost per user.”
The long period of consumer migration from AM to FM broadcasting in Europe was
recognised:
“More than 30 years of simulcast AM/FM were necessary to substitute nearly
completely AM by FM listening. This lengthy duration covered network deployment,
frequency release, launch of music channels (the killer application), and diffusion of
FM functionality through the installed base of all the receivers.”
The report identified the “major obstacles to digital radio migration” as:
 Receiver cost
 Low consumer awareness
 No pressure to release the FM band (“DAB is costly in terms of bandwidth used and
difficult to insert in existing radio bands. … But the quantity of spectrum released by
terminating analogue radio services is much less significant than the potential release of
spectrum following the turn-off of analogue terrestrial television broadcasting.”)
 No pay model driver
 No clear killer application (“Together, FM and RDS already combine a certain degree of
quality with important data services.”)
 Lack of interest for higher quality sound
 Lack of interest from carmakers
 Necessity of a European market (“Low cost receivers require addressing mass markets.
Different national timing in the digitisation of radio does not create the conditions or
incentives for achieving critical mass.”)
 The installed base of receivers (“There are between 3 to 5 radio receivers per household,
many of them being lower cost receivers. To replace such an installed base means
achieving low costs and/or to supply attractive, new services.”)

3.  Other standards than DAB are possible (“This competition may reduce the mass-market
achievement in Europe.”)
 Lack of radio spectrum capacity for DAB (“The DAB multiplex is much larger than one FM
channel: insertion in the FM band is not possible, spectrum efficiency is poor.”)
 Multi-channel is already a feature of analogue FM radio (“Additional services will have a
marginal effect.”)
 DAB licences have sometimes been delayed.
Finally, the report identified what it called “a chronic chicken-and-egg situation” whereby:
 “Receivers remain expensive because there are no scale effects. This reduces audience
and revenues of radio broadcasters who demand that manufacturers decrease receiver
prices in order to provoke a mass-market and to trigger mass audiences ;
 There is no specific advantages [sic] in digital radio, no killer application, nobody buys
digital receivers, the audience remains negligible, and prices stay high.”
There was even a graphic to illustrate the problem:
This all feels very much like DAB in Europe … eight years on. And, to hammer home the
impending fragmentation of radio delivery platforms, the report’s recommendations noted that:
“Digital radio will probably be delivered through a much larger variety of technologies
and platforms than analogue radio, which is essentially terrestrial. These will involve
broadcasting or point-to-point, online or on-air, satellite, terrestrial or cable delivery,
DAB, DVB or DRM technologies. These techniques will be competitors but very
complementary for consumers and broadcasters.”
The questions all of this raises are:
 How did the UK government’s Digital Radio Working Group spend one year (2007-2008)
considering how to make DAB radio a success in the UK but not reference this 2002
report?
 How did the UK government’s Digital Britain consultation spend much of a year (2008-
2009) looking for the answers to DAB radio implementation but not reference this 2002
report?
 Did DAB stakeholders in the UK read this report in April 2002? And, if so, did they simply
choose to ignore it?
[thanks to Eivind Engberg]
[First published by Grant Goddard: Radio Blog as 'Benefits Of DAB Radio "Insufficient Compared To Its Cost Per
User" Warned EU Report … In 2002', 1 May 2010.]
European Commission Report Concluded In 2002 That Benefits Of DAB Radio "Insufficient Compared To Its Cost"
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©2010 Grant Goddard

4. European Commission Report Concluded In 2002 That Benefits Of DAB Radio "Insufficient Compared To Its Cost"
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©2010 Grant Goddard
Grant Goddard is a media analyst / radio specialist / radio consultant with thirty years of
experience in the broadcasting industry, having held senior management and consultancy
roles within the commercial media sector in the United Kingdom, Europe and Asia. Details at
http://www.grantgoddard.co.uk