DAB Digital Radio: Licensed To Fail [Paperback]

There is nothing wrong with DAB (Digital Audio Broadcasting) radio. The technology, the motivation to widen listener choice and the opportunity to improve broadcast audio quality are all fine objectives. The only thing wrong with DAB radio is its specific implementation in the United Kingdom.

A large part of this problem was the timing. When DAB was first demonstrated at the Radio Festival in 1993, the majority of us did not have mobile phones, did not have computers, and compact discs were in their ascendancy. Since then, the technological world around us has changed almost beyond recognition. Nearly two decades later, the very fact that the industry is still debating how to implement DAB radio successfully demonstrates that something went badly wrong with the timing. So badly wrong that, in my opinion, the window of opportunity for DAB has now passed. Marketing DAB radio in 2010 is like trying to persuade the consumer that a Sinclair ZX80 computer is `cutting edge'.

Another part of the problem was the initial motivation. The commercial industry stakeholders seemed driven to invest in DAB infrastructure, rather than content, because it created an opportunity to control this new broadcast platform. Radio stations might be good at radio, but that does not mean they will necessarily be good at running other businesses. Capital Radio's diversification into restaurants served as a salutary lesson. Because the radio industry's motivation to invest in DAB did not focus on the consumer, the outcome was that the consumer became lost in the execution strategy.

Finally, commercial radio's lack of competitive get-up-and-go let it down. Control of DAB was handed to a cartel of the biggest broadcasters. There are good reasons why the law forbids cartels, and one of them is that they may not produce outcomes that are in the consumer's interest. This was the case with DAB. Being king of the DAB castle might have been great for radio sector egos, but it proved a disaster for radio sector balance sheets. Power was exercised ruthlessly and the regulator turned a blind eye. A digital station start-up like PrimeTime managed to attract DAB radio's biggest audience but was thrown on the scrapheap because it was not cartel-owned.

Now it looks as if the radio industry has been sat in a DAB waiting room for the last three years. There has been lots of talk but no action. When you are a monopoly or a cartel, you expect success to come knocking on your door, rather than having to go out and make it happen yourself. The new Digital Economy Act changes nothing. The government will not create automatically successful radio stations and hand out `licences to print money' on a plate ....

Or maybe it will, as the government's renewal of the Classic FM national licence in the Digital Economy Act was just that. As long as such practices persist, parts of the commercial radio industry will never learn to grow up and compete for licences, listeners, revenues and profits. Therein lies the problem with DAB.