At the EBU’s Digital Radio Summit in February, this was the question Patrick Hannon posed to the audience – “how do we get more private broadcasters to embrace the benefits and opportunities of DAB?” The first thing to recognise is that many commercial broadcasters have already embraced digital radio - launching new services, building brands and reaching audiences that simply would not have been possible on capacity-constrained FM. But it’s also true that some remain sceptical, believing that DAB is a platform with limited prospects (and IP holds the answers for radio’s long term future), or worrying about the perceived threat of new competition or the increased costs of dual transmission.

1. How do we encourage more private
broadcasters to embrace DAB?
Patrick Hannon, President, WorldDAB
Geneva, 8 February 2017

2. 1
Some private broadcasters love DAB radio
• Opportunity to
- launch new services
- extend brands
- grow audiences
- increase revenues

3. 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

4. 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

5. 4
Why might private broadcasters be concerned about DAB?
Don’t believe DAB+ is core future platform for radio – it’s all going IP1
Concern about costs3
Don’t understand the risks and opportunities2

6. 5
56% of Europeans can
receive DAB / DAB+
Source: WorldDAB
DAB is here to stay

7. 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

8. 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

9. 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

10. 9
Why might private broadcasters be concerned about DAB?
Don’t believe DAB+ is core future platform for radio – it’s all going IP1
Concern about costs3
Don’t understand the risks and opportunities2

11. 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

12. 11
Opportunities for growth are significant
Analogue and digital Digital-only services
Audience up 136% in seven years

13. 12

14. 13
DAB also creates opportunities for smaller radio groups, e.g. Wireless Group

15. 14
Four national stations on DAB
Sept 16 acquired by
… for £220 million

16. 15
Why might private broadcasters be concerned about DAB?
Don’t believe DAB+ is core future platform for radio – it’s all going IP1
Concern about costs3
Don’t understand the risks and opportunities2

17. 16
Concern about increased distribution costs
Illustrative
Pre-DAB Simulcast Post-DSO
Analogue costs Digital costs
Area of concern
Total distribution costs

18. 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

19. 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

20. 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

21. 20
Next steps
Is there anything more we can do?

22. 21
We can stop selling analogue-only radios in Europe
FranceBelgiumAustria DenmarkCzech
Italy PolandNetherlands 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

23. 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 Europe3
Public and private broadcasters should compete on content, but work together
to secure long term future for radio
2

24. 23
Thank you
For further information, contact:
www.worlddab.org