Whilst not a substitute for those on the move, the increasing role of broadband for radio stations is evident in Gcap announcement that it is withdrawing from DAB radio, with the closure of its two national DAB stations and the sale of its interest in Digital One, the transmission “multiplex”, to its partner Arqiva for a “nominal” sum on which it was losing £3m pa. It is also abandoning its Xfm stations in Scotland, Manchester and South Wales.
According to the announcement by the Gcap CEO, Fru Hazlitt, the consumer uptake of digital radio had been slow and the costs of broadcasting on DAB had been too high. For context, this restructure comes against the backdrop of a hostile approach for Gcapmedia by Global Radio.
GCap claims it now has 1.7m broadband listeners as well an audience of 15m for its FM stations. Unlike DAB which requires access to physical infrastructure in the geographic locations one wishes to operate, “radio” via broadband can be transmitted globally for no incremental cost over providing it to one’s traditional local audience via broadband. Oddly enough, I remember friends in the radio industry telling me how hard it had been convincing radio executives to make the investment in putting output over the internet – they simply didn’t see there being any take-up in broadband, since anyone sitting at a PC all day was surely working, perhaps forgetting that radio in the workplace was not an uncommon phenomena.
However, if one judges the ipod/mp3/pc as a competitor for traditional radio in listening hours, then streamed radio over broadband supplemented by podcasts makes sense. Of course, broadband delivered radio also opens up listeners to a choice of global radio stations rather than the former geographically restricted choice – check out Winamp or Windows Media Player radio sections for evidence.
At first glance, this is a setback for DAB albeit Channel 4 still seems to have aspirations in that space. It will take away some content that might have enticed more people to switch to DAB. However, it may also compel Offcom, the regulator, to make the licence arrangement more enticing if there is to be choice in the sector and thereby bring in more new entrants with different formats.