DAB+ business case and critical success factors

Report
DAB+ business case and
critical success factors
Patrick Hannon
Poznan: 10th April 2014
Contents
1. Introduction to WorldDMB
2. Radio today
3. Business case
4. Critical success factors
1
WorldDMB – who we are
• Not-for-profit membership organisation
• Developed DAB technical standards
• Promote digital radio (DAB / DAB+) around the
world
2
Over 80 members from 22 countries
Broadcasters
Networks /
regulators
Technology
Devices /
equipment
Automotive
3
We work with players across the radio ecosystem
Policy makers
and regulators
Broadcasters
Network
operators
Silicon
providers
Devices
Automotive
Retailers
4
Contents
1. Introduction to WorldDMB
2. Radio today
3. Business case
4. Critical success factors
5
For broadcasters, the competitive landscape is changing
Online music services
• Digital music services
• Smart devices
• Competition for FM
radio
6
Younger audiences are listening less
Changes in youth per capita listening hours, 2006-101
-17%
-14%
-13%
USA
Italy
-9%
-7%
-7%
Germany
France
Spain
-27%
Sweden
UK
Note: (1) Definition of youth varies by market; e.g. Sweden (9-19s), UK (15-24s); US data 2006-08 & 2009-11
(new methodology in 2009). Source: EBU (Europe), Arbitron (US).
7
In many markets, FM spectrum is full – difficult to innovate
• Overloaded airwaves
• No capacity for new
services
• Difficult to innovate
8
A digital radio wave is moving across Europe
Norway
Sweden
Denmark
Ireland
NL
UK
Bel
Germany
Poland
Czech
Slovakia
France
Switzerland
Austria
Hungary
Slovenia
Italy
Portugal
Spain
9
Four core markets: UK, Norway, Denmark and Switzerland
Established
markets
Norway
Sweden
Denmark
Ireland
NL
UK
Bel
Germany
Poland
Czech
Slovakia
France
Switzerland
Austria
Hungary
Slovenia
Italy
Portugal
Spain
10
Followed by Germany (2011) and Netherlands (2013)
Established
markets
New
markets
Norway
Sweden
Denmark
Ireland
NL
UK
Bel
Germany
Poland
Czech
Slovakia
France
Switzerland
Austria
Hungary
Slovenia
Italy
Portugal
Spain
11
Several potential markets
Established
markets
New
markets
Norway
Sweden
Denmark
Ireland
NL
UK
Bel
Germany
Poland
Czech
Slovakia
France
Switzerland
Austria
Hungary
Potential
markets
Slovenia
Italy
Portugal
Spain
12
Poland: first services on air
Established
markets
New
markets
Norway
Sweden
Denmark
Ireland
Poland?
NL
UK
Bel
Germany
Poland
Czech
Slovakia
France
Switzerland
Austria
Hungary
Potential
markets
Slovenia
Italy
Portugal
Spain
13
DAB+ distribution costs about 10% of FM for a single service
Annual cost of transmission1, $k
FM
DAB+
1645
-92%
925
-89%
385
-82%
68
98
Owned site
Regional site
128
Metro site
Source: Harris Broadcast
Note: (1) Opex costs; on DAB+, assumes 18 services on multiplex
14
DAB / DAB+ radios now mass market
Prices
from $29
15
Digital radios now consume 20% less power than FM devices
Power consumption of in-use devices, W
20% lower
4.69
3.75
FM radio
DAB radio
Source: DCMS / Intertek Technical Report, March 2013
16
Automotive brands offering DAB – increasingly as standard
17
Contents
1. Introduction to WorldDMB
2. Radio today
3. Business case
4. Critical success factors
18
How can digital radio build value for broadcasters?
Innovation
1
2
Increase
audiences
Increase
revenues
19
How can digital radio build value for broadcasters?
Innovation
1
2
Increase
audiences
Increase
revenues
20
Benefits for listeners
Benefits of
DAB / DAB+
Sound quality
Choice
Additional
features
21
Sound quality and choice are top two benefits
UK, % benefits of digital radio
65%
59%
35%
Sound quality Wider choice
Easy tuning
24%
23%
Text
information
Extra features
Source: Ofcom
22
Specialist music services – for niche audiences
UK
Australia
Germany
Classic Rock
Unsigned bands
Electronic music
Decade
Country
Classical
23
Specialist speech services – e.g. sports or archive
Sport
• Germany: live football
• Up to 5 matches
simultaneously
Science
• Germany: higher
education for younger
audiences
Drama & comedy
• UK: archive from the
BBC
24
Strong brands – key to success
25
Potential to extend geographic reach
Energy on FM
Energy on DAB+
Hamburg
Berlin
Rhein-Main
Nuremberg
Stuttgart
Munich
26
Extend the brand portfolio
Analogue and digital
Digital-only services
27
Absolute’s listening hours - up 95%
Weekly listening hours, m
Absolute Radio (core service)
Absolute digital-only services
25.3
+95%
22.8
18.8
15.8
13.0
1.7
11.3
Q4 09
10.2
13.0
7.6
6.4
9.5
11.2
12.6
12.3
Q4 10
Q4 11
Q4 12
Q4 13
Source: RAJAR
28
Rebranding as “Radio 4 Extra” added 37% listening
Weekly listening hours, m
• Radio 7 (DAB), sister station to Radio 4 (FM)
• Rebranded as 4 Extra in 2011
9.2
5.8
6.7
+37%
6.7
9.2
Q1 10
Q3 10
Q1 11
Q3 11
Source: RAJAR
29
How can digital radio build value for broadcasters?
Innovation
1
2
Increase
audiences
Increase
revenues
30
Sponsorship opportunities – youth audiences
31
Branded stations take sponsorship to new level
• Branded channels – aimed at
housewives target audience
32
Pop up stations – for range of events
33
Sponsorship opportunities – music tour & digital radio station
34
Sponsorship opportunities – music tour & digital radio station
35
Colour screen devices create new opportunities
Revo Pixis
36
Colour images for additional information
37
Hybrid radios with Bluetooth connectivity – from €59
John Lewis Spectrum Duo
38
New song
• Hear new song on radio
• Hit button
- for info
- add to playlist
- share with friends
39
Advertising
• Hear ad on radio / see
visual display
• Tag to interact
- access more
information
- register interest
40
Contents
1. Introduction to WorldDMB
2. Radio today
3. Business case
4. Critical success factors
41
Critical success factors
Policy and
regulation
Coverage
Content
Consumer
devices
Retailers
Cars
Consumers
42
Policy and regulatory framework
Policy
• Clear vision and commitment to a digital future from
Government / regulators
Public
radio
• Success of digital radio depends on active support of major
broadcasters – needs to be funded
Private
radio
• Link between commitment to DAB+ and renewal of FM licences
• For digital services, reduce regulation (fewer restrictions)
43
Coverage – work together to create cost-effective plan
Government
Network
providers
Regulator
• Start on major
population centres
• Define strategy for
major roads
Commercial
broadcasters
Public
broadcasters
44
Digital content proposition must be stronger than FM
Sydney analogue services
Sydney digital services
17 services on AM and FM
Over 40 on DAB+
45
Devices available from wide range of suppliers
46
Marketing activities must be co-ordinated and sustained
• Consumer advertising encourages footfall and inspires
confidence in retailers
Consumer
marketing
Retail activity
• Retail (with the right product, point of sale and trained
sales people) delivers sales
47
TV ads, heavy FM promotion and device give-aways
Source: BBC and Bayerische Rundfunk
48
Devices available in-store
• Must have strong retail
support for DAB+ radio
• Devices on shelves
• Training for staff
• Post-code checker
• Repeaters
MediaMarkt, Berlin, March 2013
49
Automotive – work with manufacturers to fit DAB+ as standard
• Educate local importers
and dealers
- consumer benefits
- coverage plans
- long term commitment
to DAB+
• Work with international
partners
50
Key to success is collaboration
Policy makers
and regulators
Broadcasters
Network
operators
Devices
Retailers
Automotive Consumers
Industry
stakeholder
body
51
Thank you
For further information, please contact:
www.worlddab.org
52
In UK, 45% of new cars have DAB as standard
50%
Standard
Cost Option
45%
40%
35%
30%
22%
20%
10%
10%
4%
0%
Q1 10
Q4 10
Q1 12
Q1 13
Q1 14
Source: CAP/SMMT
53

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