Comment from Peter Saxon

Phil Dobbie, Director Loudmouth Communications certainly knows how to get attention for himself and his business. Yet, here we are giving him even more. Well done Phil! 

Nonetheless, the headline Commercial radio industry’s “juke box” approach is “killing the medium” which appeared in ADNews last week was always going to cause a stir among those who have toiled tirelessly for the past six years to make a success out of DAB+. 

Phil’s article can’t go unchallenged.

In fact, here’s a challenge for you Phil. Let’s you and I go into business together – using your money, of course. We’ll go to one of the networks with spare DAB+ bandwidth and like MRN’s MTR did with Pacific Star’s 3MP, let’s make a deal. 

And since it’s your money, let’s be adventurous. Like you said, “Take the DAB+ opportunity seriously and start delivering genuine choice.”

Let’s do something exciting and new that’s never been done before like, I know, a digital only station that’s for kids under six and their parents. Oh wait, SCA’s already doing that by partnering with Kinderling.    

Alright, let’s try something more mainstream, like maybe, Urban Contemporary. Nobody does that, right? Actually, they do. You heard of ARN’s The Edge96.ONE? It’s anything but a jukebox with Mike E and Emma on breakfast and a full announcing roster. Not to mention 150,000 facebook likes from listeners.

Okay, Nova Entertainment’s Coles Radio and ARN’s Chemist Warehouse Remix are not exactly dripping with personality. But they are commercially sound and if it was my money, that’s where I’d put it. Remember, we’re talking about commercial radio and at some point we have to make a profit – before our (your) money runs out.

How about a format that does nothing but introduce new music? Hang about. SCA’s done that too. Remember RADAR? It was SCA’s venture into new music on DAB+ when it was launched in 2009.

“Guy Dobson is passionate about wanting me to do things differently,” Jaime Chaux”

Austereo Digital Radio Content Director at the time Jamie Angel, told radioinfo, “Right now it’s not about making money. Look, we’re a commercial entity and at some stage of course it will be. But digital is going to take a long time to turn a profit. In the meantime let’s put something together that’s really good and that we’re all really excited about and will help us get to profitability that much quicker.”

No one, except perhaps you, Phil, could accuse SCA of not giving RADAR a red hot go. But by November 2013, it was gone. It hadn’t worked out. Shit happens – especially in the commercial world.

You may say, ahh but Apple has launched Beats 1 which has a new music format. True. But that’s a global enterprise. My guess is it will attract maybe one percent of the potential audience – which on a planet of 6 billion would get you cumes of around 60 million a week. One percent of Australia is less than 250,000. And guess what… that’s about the reach that Triple M’s Classic Rock gets nationally right now.

Rightfully pleased with last week’s digital survey results, SCA’s current Digital Radio Content Director Jaime Chaux – anyone who’s ever met him knows he lives, eats and breathes digital – told radioinfo that the strategy is to “deliberately build a diverse portfolio to deliver new audiences to our company… we have to try doing things in a new way,” he says.

In fact, his boss, Guy Dobson, says Jaime, is “passionate about wanting me to do things differently,” which inspires him and his small team to push the boundaries.

I’ve got an idea, Phil. Instead of racking our brains over a suitable format, let’s secure some high profile talent who will attract listeners in droves. Who do you have in mind? Howard Stern’s the only one that comes to my mind that’s coming off contract. We have two choices; pay millions to known talent and lose our (sorry your) money quickly if it doesn’t work or develop fresh talent and lose your money slowly if it doesn’t work.

Anyway, Phil, I’m sure we’ll come up with something else that’s untried and untested. I’m willing to risk every last cent of your money on it!
 

“Much of what Phil Dobbie opined is simply wrong,” Joan Warner

In his AdNews article Phil warned, “Traditional stations face a far bigger competitor. Ratings released in the UK this week show that, over there, AM and FM accounts for just 60% of all radio listening. DAB (with more than 60 stations to choose from) accounts for a chunk of the remainder, but online and apps make up 6.4% of all listening. With digital radio yet to get the foothold it has in the UK, where half of all households have a set, online could quickly grab a higher share of the market here.”

CRA Chief Executive, Joan Warner offers this reply, “It’s not particularly relevant to make comparisons between here and the UK. Digital radio launched in 1995 in the UK so has been part of the market far longer than the six years it’s been operating in Australia. 

“Moreover, Australia uses world-leading DAB+ digital technology which is superior to the DAB system adapted in the UK.

“Much of what Phil Dobbie opined is simply wrong.

“While streaming is complementary to broadcast, it does not have significant cut-through here, especially compared to DAB+ uptake. Nor is it practically or technically possible for mobile networks to take over all live and local radio listening – as the Coutts Report so clearly pointed out last year.

  “GfK surveys continue to show that audiences are listening to DAB+ digital radio at more than two and a half times the rate that they stream, in terms of both the number of listeners and the time spent listening.

 “Listeners don’t want to drain their batteries and exhaust their data limits when they could access free-to-air broadcast – this has been proven through research here and in the UK and across Europe.  Streaming is, as most people are aware, also demonstrably less cost-effective and less spectrum-efficient,” says Ms Warner.

Above: One thing Phil and I agree on. Screenshot: Twitter

In his article Phil gets carried away with the fact that, “Nearly 3.2 million people listen at least once a week across the five state metropolitan cities. That means, more or less, digital radio has achieved a quarter of the reach of AM and FM radio. Yet the truth is, the majority of people are listening to stations already available on AM or FM.” 

Umm, well, yeah, Phil. The overarching idea was always to move the current stations from analogue to digital, just like television – and eventually turn the analogue off, just like they have with television and just like they’re doing in other countries. The extra channels are a bonus. Also, given that your best talent, content and resources are tied up on your existing stations, what would you expect? 

Phil goes on to accuse the government of “cow-towing to the incumbents’ demands. The industry has, of course, every right to fear the consequences of open competition. Imagine 32 entrants programming stations that could dig-in to the cosy arrangement that has seen no new FM or AM players since 2005,” he says.

Phil, the government could hardly be accused of cow-towing. In fact, like a Mafia Godfather, it made the industry an offer it couldn’t refuse. You either take on digital and build the infrastructure or we’ll give it to someone else. Now imagine you were dmg who had paid around three quarters of a billion dollars for seven broadcast licences over just the past eight years on the understanding that you were buying a limited resource. Threatened with dilution of your investment by a factor of 32, as a businessman with our money at stake, what would you do?  

First, you’d bite the bullet and take the deal. If you were smart, you’d understand that digital radio is not going to be a get rich quick scheme. Of course, commercial radio is about making money. At the same time, every major operator I know also understands that content is king. It’s what attracts listeners which in turn drives revenue. 

Here’s the conundrum. You can’t afford to put resource intensive content onto a platform that has little penetration in the marketplace. And without high value talent and content, it’s hard to compel people to buy new DAB+ sets.

Note: While there’s some attraction in more stations and more diverse programming and some new technological features, radio had no slam dunk like television had. While TV had similar features too, that’s not what people were buying. They were buying big, hi-res screens – digital was merely smuggled in on the back of them.

​In the meantime, with up to six digital signals or more to develop at once you devide your resources carefully and experiment to see what works and what doesn’t.

After 6 – 10 years, once you’ve reached critical mass with DAB+ penetration, you survey the market and start selling the numbers as you beef up the content.

Wouldn’t that be a good plan, Phil? Partner. Funny, that’s pretty much what the commercial radio industry seems to have done.

Frankly Phil, in my opinion what digital radio in this country has achieved in just six years compared to the UK’s 20 is nothing short of remarkable.

Peter Saxon