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Dig deep! Radio asks taxpayers for blank cheque

You'll have to pay for more DAB - we can't afford it

Internet Security Threat Report 2014

Timing is everything, comics say. So it is in politics, too. With the UK flat broke after Labour's nine-year drunken spending splurge, the taxpayer is now being asked to pay for lots of new radio masts, and associated infrastructure.

The anointed successor to analog radio doesn't have anything like the infrastructure required to match analog's coverage, and neither the BBC nor commercial broadcasters want to spend any more than they have already committed over the years.

So, dear taxpayer, that means you. This requires "massive public funding" according to one broadcaster today. Read on for some interesting new figures, and the first signs of creative rule-bending to meet the switchover requirement - all gleaned from a very lively Westminster Forum on Digital Radio this morning.

The radio industry's appeal for funds is unprecedented not just because the timing is awful. It's also unusual for another reason: the industry is asking for a blank cheque.

Nobody has published an independent analysis of how much the additional digital radio infrastructure will cost to achieve certain coverage thresholds. (The DAB industry claims coverage is now 86 per cent national coverage for BBC digital channels and 90 per cent for commercial channels - and much lower for local.) So much for "evidence-based policy making".

So far we only have the word of mast monopoly Arqiva, which has a horse in this race, having acquired the Digital One DAB multiplex in 2009. It's hardly an unbiased source. While Ofcom's director of radio Peter Davies is supposed to be working on this, until he reports, we only have best-guesstimates.

The radio industry again pressured culture secretary Ed Vaizey for funds last week - talks have stalled for a year now - but he isn't inclined to budge. In today's climate - with household income set to fall for the first time in 30 years - which politician would be?

Today, speaking at a Westminster Forum event, Arqiva's radio chief Paul Easton hazarded a figure: £100m, he said. But I've heard much higher estimates required to bring DAB up to FM coverage, which start at the astronomical and go up from there. Given the UK's finances, £1bn isn't going to fall out of the sky onto an industry which has made a mess of its digital strategy.

So the debate has stalled for a year over who should pay the costs. Last week culture minister Ed Vaizey hosted a summit for the various parties. Unfortunately for the radio chiefs, Vaizey is perhaps the minister least likely to approve of corporate welfare for media workers. And if he viewed it as a matter of national priority, something would have been conjured out of last October's license fee settlement, which fixed BBC income for the next six years. It wasn't.

The people at the top of the radio industry seem to be in a strange denial about digital radio. CEO of trade body RadioCentre Andrew Harrison touted a new DAB station this weekend - Radio 4 Extra. But it's simply DAB stalwart Radio 7, rebranded.

Ford Ennals (who is not a car, but chief executive of DAB trade group Digital Radio UK), proclaimed that "the programme [for switchover] was on track", added that he could "certainly see [listenership criteria] being met in the next five years" - before concluding "the future for DAB is very bright."

Yet that message was undercut by a succession of commercial broadcasters.

Absolute Radio's strategy head Adam Bowie warned that "the most dangerous thing is ignoring consumers and driving down cul de sacs" and said "hybrid radios" - meaning FM, DAB and Internet - were "going to be key". Absolute already delivers 65 per cent of its broadcasts digitally, but he pointed out the largest growth is in internet streaming. Bowie saw promise in IP-delivery for high-quality streaming that neither FM nor DAB were able to deliver, and commercial targeted 1:1 advertising of the type Spotify had used.

Jimmy Buckland, his counterpart at UTV Media, which owns Talksport and a dozen locals, also had some interesting observations. He said the future of DAB was assured… but "as a secondary platform" and there wasn't the investment case to spend more on DAB infrastructure. Like Bowie, Buckland said there was little business case for large expenditures on more DAB infrastucture.

Travis Baxter, external affairs director for Bauer, said we "still don't understand what the consumer pull is; or that the push about DAB can really be achieved without massive public funding." DAB was an "uphill struggle", he said. Three years ago we would have found the same broadcasters bullish about DAB - and thoughts of describing it as a "secondary platform" were unthinkable. Not any more.

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