Blogging Nick Piggott

So here’s my brief contribution to the flurry of analysis of Lord Carter’s Digital Britain report.

The biggest news is that we get a target date for switchoff (sorry, “Digital Upgrade”). 2015 is the year we should be flipping the OFF switch on (almost all) analogue radio, and offering universal coverage of DAB. That date can now be plugged into business plans, and financial projections, and hopefully provide the necessary laxative effect to the recently sluggish developments around DAB in the UK.

So, rather than dissect all of the Radio section of the report, which others will do better than I, here are the bits I particularly noted:

It’s a full switch-off (”upgrade”)

Some summaries have suggested that the 2015 deadline only applies to national radio. It doesn’t – it applies to all services being carried on both national and local multiplexes (3b.10). The only thing left on FM post 2015 will be very small scale services; either commercial or community. There is not going to be a dual-speed changeover, which leaves local radio dragging along for years with a foot on each platform. That’s good.

Support for WorldDMB Profile 1

There it is, snuck away in 3b.20 – receivers sold in the UK should be at least WorldDMB Profile 1 compliant. The box on the following page is a little more explicit in saying that we are giving ourselves a migration path to DAB+, which is the smart thing to do. Nobody seriously considers DMB-A (the Frankenstein bodge invented to make an ill-informed decision seem at least slightly less ridiculous) for radio, so let’s ignore that. Some commentators have, incorrectly, said that Profile 1 includes DRM. It doesn’t, and DRM needs to mature a great deal more before it can earn a guaranteed place alongside DAB and DAB+.

Improving Signal Quality

It’s no secret that I don’t believe DAB should be crippled by being forced into universally super-serving a small fragment of the audience that expects ultra-high-quality audio from every radio station. The market can and will decide what audio quality is right for which stations and bearers.

But I do believe that we need to offer robust indoor and handheld coverage to everyone who currently enjoys that from FM now, and by crikey, it’s not rocket science to do it. Australia’s got the right idea – power. And more of it.

There’s some more crypticness in the report. It talks a lot about achieving equivalent coverage prior to 2015, but only in 3b.23 does it explicitly recognise that indoor coverage must be more effective. It also recognises that there’s some cost in achieving network upgrades, but notes that there is opportunity for negotiation between the BBC, multiplex operators and transmission providers. That’s timely, as many of the initial multiplex transmission contracts come up for renewal soon, and knowing with certainty that it’s worth spending money on the infrastructure is very valuable.

Replanning the network

This wasn’t as explict as I had hoped for. There is reference in 3b.26 to giving OFCOM the powers to re-plan and amlgamate multiplex areas, but I would really would like to have seen a more definite commitment to re-plan at a spectrum level to get a step-change in coverage (up) and costs (down). At least there’s a statement that sorting out coverage shouldn’t be as expensive as some people might have made out it could be.

And now – drum roll – the best bit…

In fact, it’s so good, it’s the only bit I’m going to quote verbatim from 3b.31:

Functionality and interactivity must become central to the DAB experience.
EPGs, slideshows, downloading music, as well as pause and rewinding live radio
must be developed and brought to market on a large scale. Broadcasters and
manufacturers must seek to develop and implement digitally delivered in-car
content, such as traffic and travel information.

Well, we waited a decade, and now it’s a formal part of the plan to digitisation. Digital Radio must prove its worth by doing something… digital. If we don’t use the platform and spectrum we’ve been given (and will continue to get for free for a while – 3b. 27) to evolve radio, what’s the point of doing it? Same value, different platform?

If the other parts of Digital Britain are designed to create confidence in building transmission infrastructure, and writing long-term financial plans that support transitionary investment to achieve that, then this is the statement that should create the confidence in investing in a new kind of digital radio, and it’s about a content led experience that’s enabled by a universal, free-to-air technology. If the rest of the report stabilises the ship, and gives it a shove in the right direction, this is the bit that signals the start of true innovation and digital change for radio.

95.8 Capital FM iPhone Application

My joining GWR Group coincided with an explosion in the use of music research to decide what songs got played, and how often. The data drove a new format – the “Better Music Mix” that rolled across Southern England in the mid and late 90’s. Hundreds of listeners were surveyed every week to track their changing interests on a track-by-track basis.

Despite that intensive process, there was one thing research couldn’t do. It couldn’t tell you if a new song was going to be a hit with the audience or not. Only after people were familiar with a song could they give you an opinion – virtually all new songs scored badly, simply because they were unfamiliar. The only way to see if a song was popular or not was to take an informed decision, use a bit of “gut feel” and start playing it – albeit gently at first. After about 6 weeks of exposure (assuming a few other stations were also playing it), and you’d start to see the opinions form and polarise, and you could decide to bin it or stick with it.

That experience from the analogue world is equally applicable digitally.

A lot of Digital Radio’s attributes are simply extensions of analogue radio; more stations, improved sound quality, better reception, easier to tune. They all address familiar radio functionality that listeners have found wanting in analogue. It’s not surprising, then, that these are the messages that have most impact with listeners when they’re thinking about reasons to go digital. And in turn, these become the headline messages of a marketing campaign for digital radio.

It’s interesting to compare the motivators people have for purchasing a digital radio with the attributes they say they most value having bought one. Pre-purchase, the concept of text information scores virtually nowhere – nobody buys a Digital Radio to get text information, and it seems to be an utterly valueless attribute. However, post-purchase, it soars to be one of the top five things that people love about their Digital Radios. Before they experience it, they can’t understand it, and so can’t value it. It only takes a short experience to get the benefit, and, even more interestingly, for it to become a differentiating factor between radio stations. Shortly after the launch of Core, research showed that listeners loved the real-time text information on the display, and absolutely slated Radio 1 for not doing the same. (Annoyingly, the BBC fixed that far faster than we expected them to).

We were lucky that text was a de-facto inclusion on almost all digital radio devices, even if the implementation is pretty ropey, on poor displays. (If anyone can show me a DAB Digital Radio that implements the “Clear Message” command in DLS, I’ll be amazed).

The problem is that we need to go further in using Digital Radio to create new functionality and better differentiation between analogue and digital, and between digital and on-line streaming services. And a further problem is that our audience won’t understand what the heck we’re on about until we show them.

I did a demo to the GWR Board in ‘98/’99 (along with Dirk Anthony) of our concept for a classic rock radio station called C-Rock (yes, ha ha). The demo consisted of an audio CD, brilliantly imaged by Scott Muller, and a series of HTML 3.0 webpages, which advanced using HTTP META REFRESH tags (this was the 90’s – AJAX was still a bathroom cleaner). It demo’ed our vision of what Digital Radio should be like – a fusion of audio and images. Of course the audio bit of that demo became Planet Rock, and very successful it is too.

But the visual bit of that got stuck for a decade. Listeners couldn’t understand it, so manufacturers wouldn’t build colour screen radios, so multiplex operators wouldn’t allocate capacity for it, and sales teams wouldn’t even consider selling it. Log jam.

Then the Apple iPhone changed that completely.

Quite unexpectedly, the iPhone has provided the catalyst to get visual radio taken seriously. It could (should) have been Nokia Visual Radio, 5 years earlier, but NVR was so horribly badly implemented, it never got any traction. (There’s a moral in there for Nokia, I’m sure). But it’s been the iPhone, and its colour screen that have provided a trial environment for visualised radio, and the feedback from listeners is overwhelmingly positive.

The Global Radio iPhone Apps aren’t the only radio apps that support visuals (although clearly, they’re the best). There’s Absolute Radio’s iAmp, TuneKast and the now last.fm has announced that they’re visualising their player as well. Collectively they’re providing data on listener appreciation (high) and the volumes of visuals delivered, which in turn sizes the commercial opportunity.

I find it ironic that Apple, having kept radio out of the iPhone, has inadvertently provided our best research source yet into a truly innovative change to radio, and one that our listeners could not possibly have understood or valued without experiencing it. Now the initiative lies with the radio industry to implement it and promote it before that innovation gets stolen by the on-line streamers.

BBC Radio Holby co-shares with Classic Gold - from a Casualty shoot in 1999

John Myers’ report “An Independent Review of the Rules Governing Local Content on Commercial Radio” was published yesterday, and it’s well worth committing time to read through in detail.

If you’re outside the UK (or even outside the UK Commercial Radio Industry), you might be wondering why a report into the regulation of local content on commercial radio should involve Digital Radio.

I will very briefly précis 95% of John’s report. Commercial radio has got into a perilous state financially, through a combination of over-farming (too many new licences, not enough associated audience/revenue growth) and increasingly burdensome costs. The currently regulatory system promulgates this situation, and without urgent change, there is a real risk of sectoral failure.

John’s remit was to consider the regulatory environment surrounding local content, but Digital Radio (and digitisation in general) is brought to the report in a number of places. (I’m not going to talk about the issues and suggestions in respect of local regulation that John raises in his report).

A key tenet of the report is that the current regulation of localness is wholly inappropriate for the media environment of 2009 and  onwards. John mentions several times that it should be considered unreasonable for licensed radio operators to work under local content regulation when Internet radio does not. In my opinion, John has somewhat over-played the threat – current and future – from Internet delivered radio to support this argument. I believe the issue is that listeners are seeking choice and innovation, and that if the licensed industry can’t/won’t provide that, people will find it from new operators. In this respect, the method of delivery is largely irrelevant. Existing operators stream over the Internet, and new services can start on DAB (but see below too). It probably depends on how much choice you have to deliver to remove the incentive to buy IP-connected radios to seek out new stuff, and your estimation of the value that exists in the “long tail” of radio. In my view, radio operators have all the tools the need to reach out further down the long tail if they believe it’s profitable to do so, and have a unique advantage of doing so on both IP and into protected spectrum which will deliver universally into the fixed and mobile domains (that would be DAB then). Even with broadband penetration heading towards 80%, Internet listening is very very small, and dwarfed by DAB listening.

Whilst outside the direct remit of his report, John clearly identifies that costs and revenues are a problem for the radio industry. Growing numbers of stations have raised sectoral costs, and revenues are declining. Changing the regulation of localness would relieve the industry of some costs, but John is right to identify that the implementation of DAB has saddled the industry with burdensome long-term costs that it can’t support in the current environment. I agree. He reviews the rapid licensing policy of DAB, and notes that many of the multiplex areas licensed were barely able to profitably support one or two local FM services, let alone the addition of a local multiplex. Understandably, John has avoided detailing why DAB is so expensive, but you’ll know from my previous posts that I have a much more unequivocal view – the multiplex spectrum plan was too complex which drove up the infrastructure complexities, and the transmission provider offered prices that now look very unattractive. John suggests that the costs of DAB can be made more realistic by re-planning into a less complex configuration – which I hope also translates into fewer sites running at realistic power levels. This is a sound recommendation which I hope OFCOM and DCMS take note of and get moving on quickly. Sadly, DAB+ still isn’t mentioned, meaning it remains taboo in the UK. That’s a mistake in my opinion, but as I’ve said before, it’s an issue of frightening complexity, and I can understand its omission.

The most contentious recommendation, in my view, is this. John recommends that one of two things should happen; EITHER Broadcasters should not be allowed to run multiplexes OR the cost of multiplex access must be more directly regulated by government to ensure it remains at or below the equivalent analogue cost. I’m very much hoping that John made the first suggestion for it to be roundly and loudly rejected from all sides, leading adoption of the second approach. In all honesty, I don’t think either is optimal. It has long been an issue that the gatekeeper regulation of multiplexes included a loophole that allowed the gatekeeper/broadcaster to attempt to cross-subsidise the carriage of their own stations. This probably made sense in the heads of the accountants, but was a dismal failure on the ground. The high cost of DAB carriage deterred many new entrants (although that could also have been policy – deliberate or accidental) and thus multiplexes lost money in reality, even if the paper accounting looked OK.

But it had a far more detrimental effect, and one that goes to the root of the slowdown of DAB in the UK, and the failure to see enhanced revenues from going digital. DAB did not grow and flourish with new and innovative services that consumers were expecting. And neither did it deliver new things to advertisers in any volume. In short, the policy hindered the very innovation that the industry needed from digital. The reason that no data services launched in the UK was due to an unholy interplay of effects around multiplex ownership, costs and infrastructure capabilities.

I can understand John’s call for broadcasters not to be gatekeepers, given the circumstances, and maybe it will always be an unresolvable conflict of interests for a broadcaster to try and encourage competition and innovation against its own stations. I think the Australian model of multiplex ownership and regulation bears careful inspection, to see if it can be exported to the UK. I don’t believe it’s right for there to be no involvement from broadcasters in the development and management of their digital platforms, and I don’t believe an infrastructure provider operating in isolation has the right incentives to manage costs, coverage and functionality appropriately.

In respect of costs, the evidence is that DAB, when deployed in a sensible configuration, is naturally lower in cost than the equivalent FM coverage. Indeed, that was the whole point of DAB; to replace 6 identical sets of infrastructure costs with one single cost carrying 6 stations – but we lost sight of this somewhere. If DAB is replanned properly, and if the cost is equitably shared amongst the users (without daft “uplifts” for functionality), it will be cheaper than FM. Of course, someone has to bear the risk of the whole cost before it’s shared out, and that’s a tricky one to answer. But if broadcasters want to address the long-tail with more services, they’ll have to bear more costs of infrastructure and spectrum, and it’s naive to deny that.

John’s report uses the opportunity to address many of the failures in the UK’s DAB deployment, and I’m glad to see his recommendations concurring with many of my own suggestions. Now the report has to be acted upon by OFCOM and DCMS, and swiftly.

Google’s exit from the radio arena this week wasn’t necessarily a huge surprise. It was a bold move to try and port their successful advertising business from the Internet to radio, and to do so without primary control over the inventory they were selling and the environment they were selling into. But it didn’t seem to be getting the prominence in the marketplace to make it successful.

Google created a relatively rich technology ecosystem in order to support the on-line trading of  radio airtime. They acquired dMarc, and set about re-branding and reworking that company’s playout system, to relaunch it as Google Automation, with integral support for Google’s APIs for advert insertion. They worked with the vendors of other major playout systems to extend the number of playout products supporting Google ad insertion. They created a pretty good, simple, on-line interface to allow people to book airtime campaigns, and monitor the performance of them. And the Google Creative Marketplace allowed advertisers to find creatives to make their radio adverts.

There are some things that I don’t think we’ll really miss. I was really disappointed with the Google Automation product, which I didn’t think was worthy of having the Google brand applied to it. When I think of Google, I think of innovative UI design, clever APIs, and rich-meta data. Google Automation didn’t live up to those expectations, and I think there are much more capable and exciting playout products in the market.

Google tried to sell radio advertising as a commodity; buyers didn’t know what stations their ads were going to run on, and they only had vague controls over formats, demographics and geographic area. That Google was unable to commoditise radio is probably good news. It means that brand values, production values and market prominence are still important, and that advertisers want to be heard in the right environments.

But there are some things that I hope radio can hold onto after Google has left. The principle of on-line trading of airtime is really interesting, and could mark a change in the way that radio is sold, in the same way that airline shifted their business from selling through travel agents to selling through websites. The cost of processing those orders and transactions could fall, which means more money going to programme making, and maybe even more money going to make better radio adverts. It might even open up radio to new advertisers, particularly in the small non-metro markets that find life particularly hard.

I thought the Creative Marketplace was a very cool idea. I wonder if it will live on in another guise? I like the idea of many individual, freelancing creatives being able to connect with so many prospective customers – a trading floor for creativity. Great idea, and a shame for it to get lost.

The technology behind the project was good, as you’d expect from Google. Radio airtime scheduling is still somewhat archaic, often involving the nightly transfer of flat text files, and it’s difficult to really deliver on radio’s ability to be immediate. Google created a set of APIs to schedule and insert adverts in near real-time, and get the reconciliation back almost as quickly. Ad breaks were filled just minutes before they were played out, which is the way it should be. We should keep that as the benchmark for airtime scheduling, giving us an almost unique position in mass-media.

Google have said that, whilst they’re withdrawing from radio, they will keep this technology and develop it for personalised advert insertion in on-line streaming. I’m not sure that will give them any more success. If the radio industry is smart, it will create formats which will deliver targeted demographics with low wastage, meaning that the efficiency gap between broadcast advertising and personalised advertising will be fairly narrow, reducing the financial incentive for advertisers to get into the altogether smaller, more complex and more opaque world of streaming advert insertion. (Let’s see how Spotify does with that one).

One thing I was surprised about. Google did some clever technology, but didn’t really introduce any innovation into radio advertising. They didn’t seem to offer a service that encompassed advertising on-air and on-line or on the radio station’s website, something that is more routine in radio companies own sales forces. Why didn’t Google see the opportunity for synchronising visuals, audio and interactivity and offer radio stations a streaming “tuner” that did all that for them? That kind of differentiation might have given them the edge they needed.

Maybe it’s unrealistic to expect Google to have a vision for innovating with radio advertising. That responsibility seems to rest with us.

Photo: What’s Google Doing With Radio by James Cridland @ flickr – amusingly taken at NAB in 2006 in Rome, IIRC.

I’ve been partly inspired by a post by Marc Ramsey entitled “Maybe the last time I’ll ever write about HD Radio“, and partly by a post by James Cridland entitled “CES 2009 – HD Radio’s Additional Channels“.

In different ways, they both make the point that HD Radio (in this example) is a technology capable of good things, of things that could rejuvenate interest in radio, but is being let down by some implementation errors. At face value, Marc seems unimpressed by the technology of HD Radio, but reading deeper, in his post he makes the point that the radio industry isn’t using HD to deliver any content that wows people. Similarly, James describes how multi-channelling, the technical capability that would allow HD Radio to deliver new content, is so appallingly badly implemented that it’s pretty much useless for consumers.

For HD Radio, read DAB Digital Radio.

Admittedly, multi-channeling in DAB isn’t a pre-requisite for delivering extra content, which is a tremendous relief, because the implementation of secondary services on most radios UIs is dismal. I don’t recommend trying to tune into BBC Radio 4 (LW) for the Morning Service on a two line LCD display with a rotary knob. It’s only because most DAB radios use a small handful of silicon providers that consistency has happened by mistake, rather than planning.

But in both cases, the failure to “wow” people isn’t a technological one. It’s a failure by incumbents to do radical things with a new platform, largely out of fear of disrupting the old one. Incumbent companies are big, and have lots of people who know how to “win”. If you’re a salesperson who knows they can pay the mortgage by hitting revenue targets, it’s potentially more sensible to stick on the side of visible decline, than leap headlong into the unknown world of change.

It’s no secret that I believe the ways we should be “wow”ing our listeners are:

• Commercially sustainable choice of radio stations that are clearly different from streamed music and jukeboxes.
• Visualised radio is an evolution of radio that listeners “get” the moment they see it (no pun intended). Sometimes listeners, who seem to have fewer preconceptions, get it more than people working in the radio industry.
• Interactive radio which recognises that listeners can’t actually interact most of the time they’re listening to radio.
• Mashable radio that makes it much easier to let listeners dip in and out of radio and consume it on their own terms.

Making this kind of change happen isn’t easy. There are challenging business, technology and content problems to overcome, and it’s not an easy win. It looks and feels easier to “win” on the Internet, as the Internet and connected devices are somewhat less frictionless in terms of technology and business models. But I think that the harder wins are more valuable, and whilst both HD and DAB are doubtless harder wins, they have unique value in preserving the role of mass-market radio in the world’s media mix.

Photo: (CC) Alpine HD Radio Car Display by fatcontroller @ flickr. My trip to CES was sadly not to be.