News story about a report published by Lord Smith recommending that state subsidies be made to UK local commercial radio stations to assist their migration from analogue to the DAB digital radio broadcast platform, written by Grant Goddard in September 2005 for The Radio Magazine.

1. NEWS: LORD SMITH SUGGESTS
STATE SUBSIDIES FOR LOCAL
COMMERCIAL RADIO STATIONS
TO MIGRATE TO DAB
PLATFORM
by
GRANT GODDARD
www.grantgoddard.co.uk
September 2005

2. Former culture secretary Chris Smith has suggested that local radio stations
receive financial subsidies to help them make the switch from analogue to
digital transmission. In a report commissioned by the Digital Radio
Development Bureau [DRDB], Lord Smith recommended that the smallest
analogue stations who attract 7% of UK radio listening would not have the
financial means to migrate to DAB unless the government uses the proceeds
from licence fees paid by larger stations to cross-subsidise their technological
upgrade.
"It is a situation that may just about be tolerable in a developing marketplace,
where there are still many FM sets in most households and in cars, but it is
self-evidently not a sustainable position," Lord Smith said. “Incomplete
coverage of local radio services represents the greatest obstacle to the move
to an all-digital environment.”
One solution would be to re-organise the existing frequencies of DAB networks
to use the bandwidth more efficiently, thus freeing up space for smaller
stations. "If you get the network properly in place so that you achieve the
overall coverage for local radio that you want, which could be in a year or two,
at that point it could be possible to set a date [for analogue switch-off]," Lord
Smith said.
The report also recommends that:
 newly available frequencies should be assigned to DAB radio rather than
non-radio purposes
 complementary technologies such as DRM should be used alongside DAB
 the use of DAB for data transmission should be factored into Ofcom studies
 Britain’s presidency of the European Union could be used to persuade
other countries to develop DAB
 the government should act as champion for migration to DAB
 the government should pay for a campaign persuading the public of the
advantages of DAB over analogue.
DRDB chairman Ralph Bernard said: “Digital radio is the most important
development in UK radio broadcasting in more than thirty years. The move to
an all-digital future is inevitable and this important report starts the process for
setting a timetable for analogue switchover. I agree with Lord Smith that we
should be working towards an analogue cut-off date.”
New DRDB forecasts predict that 40% of households will have DAB by 2009,
and that the number of homes with DAB will increase from 1.2m to 20m by that
date. The digital radio market is predicted to be worth £456m by 2009,
compared to £87m last year. Bernard said: "It is encouraging news that
consumers are continuing to buy new receivers to enjoy the new digital
stations on offer".
[First published in 'The Radio Magazine' as 'Smith Proposes DAB Subsidies', #700, 7 September 2005]
News: Lord Smith Suggests State Subsidies For Local Commercial Radio Stations To Migrate To DAB Platform
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©2005 Grant Goddard

3. News: Lord Smith Suggests State Subsidies For Local Commercial Radio Stations To Migrate To DAB Platform
Page 3
©2005 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