how can we encourage more private broadcasters to embrace dab?

How do we encourage more private broadcasters to embrace DAB? Patrick Hannon, President, WorldDAB

Geneva, 8 February 2017

1

Some private broadcasters love DAB radio

• Opportunity to

- launch new services

- extend brands

- grow audiences

- increase revenues

2

Others are more suspicious

• Already profitable

- based on preferential access to

scarce FM spectrum

• Fear of increased competition

• Increased costs associated with

dual distribution

3

Reality: world is going digital – and radio needs to innovate

• Key threat to radio (public and private) is

cloud-based music services

• Audience and advertisers require

innovation – difficult on FM

• DAB allows innovation without destroying

existing business models

Competitive landscape

4

Why might private broadcasters be concerned about DAB?

Don’t believe DAB+ is core future platform for radio – it’s all going IP 1

Concern about costs 3

Don’t understand the risks and opportunities 2

5

56% of Europeans can

receive DAB / DAB+

Source: WorldDAB

DAB is here to stay

6

Eight years ago, four DAB markets

UK

Norway Sweden

Germany

France

Spain

Italy

CH

NL

Bel

DK

Poland

Czech

Austria

Ireland

Portugal

Slovenia

Slovakia

Hungary

Finland

Estonia

Latvia

Lithuania

Established

markets

7

• Norway has started DSO

- 1st region: 11/01/17

- 2nd region: 08/02/17

• Switzerland 2020-24

Today: DAB is being established across Europe

UK

Norway Sweden

Germany

France

Spain

Italy

CH

NL

Bel

DK

Poland

Czech

Austria

Ireland

Portugal

Slovenia

Slovakia

Hungary

Finland

Estonia

Latvia

Lithuania

Date for DSO

Established

On the move

Trials

8

IP is not the answer – especially for listeners on the move

Issue DAB / DAB+ Internet

Free to air

(for listeners)

Cost-effective coverage

(broadcasters)

Reliable in emergency

(society)

X

X

X

9





10

% share of UK listening, top two private groups

15%

10%

20%

15%

Global (GCap) Bauer (Emap)

Q3 2006 Q3 2016

Fears of competition are overstated: incumbents are the winners

Source: RAJAR

• Growth combination of

- organic

- acquisition

• Bigger risk is not being on

the platform – leave door

open to new entrants

11

Opportunities for growth are significant

Analogue and digital Digital-only services

Audience up 136% in seven years

13

DAB also creates opportunities for smaller radio groups, e.g. Wireless Group

14

Four national stations on DAB

Sept 16 acquired by

… for £220 million

15





16

Concern about increased distribution costs

Illustrative

Pre-DAB Simulcast Post-DSO

Analogue costs Digital costs

Area of concern

Total distribution costs

17

The public authorities and public broadcasters can help

Government

and regulator

Public

broadcasters

Private

broadcasters Government contribution (subject to

State Aid rules) 3

Infrastructure sharing: public and private

broadcasters 2

Regulatory incentives, e.g.

• FM licence renewals

• relaxation of ownership rules

1

Digital radio partnerships

18

Case study: new ownership rules in Netherlands

John de Mol:

• “Radio is the most interesting medium -

interactive, dynamic and always live

• “We can create a strong radio company and

combine the radio brands…

• “… sharpen profiles of the stations so they are

maximally complementary and reach is increased”

• Jan 2016: ownership rules for private

radio in Netherlands were relaxed1

• July 2016: Talpa and TMG merge radio

operations

(1) Not directly linked to DAB+, but introduced at the same time

19

Case study: public / private broadcaster collaboration in Bavaria

• BR transfers excess capacity to the Bavarian Media Authority (BLM) and receives

compensation

• BLM licenses capacity to private broadcasters

Infrastructure

sharing

• The transmission costs are supported by the Bavarian Media Authority (BLM) and the

state of Bavaria

Public

funding

Background • BR (public broadcaster) has one multiplex for Bavaria plus six regional multiplexes

• The muxes are not full – excess capacity for 2 to 10 DAB+ services

20

Next steps

Is there anything more we can do?

21

We can stop selling analogue-only radios in Europe

France Belgium Austria Denmark Czech

Italy Poland Netherlands Slovakia UK

Germany

Stakeholders from 11 countries have

written to the Commission

• In Europe, over 50% of new radios

(consumer / automotive) are

analogue-only

• If rules are changed

- accelerate uptake of digital

radios

- generate revenues more quickly

- reduce time required for

simulcasts

22

Conclusions

DAB+ offers significant opportunities for private broadcasters – organic

growth and, potentially, through M&A 1

Now is the time to stop selling analogue-only radios in Europe 3

Public and private broadcasters should compete on content, but work together

to secure long term future for radio 2

23

Thank you

For further information, contact:

www.worlddab.org

how can we encourage more private broadcasters to embrace dab?

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