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DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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Page 1: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

DAB+ business case and critical success factors

Patrick Hannon

Poznan: 10th April 2014

Page 2: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

2

Contents

1. Introduction to WorldDMB

2. Radio today

3. Business case

4. Critical success factors

Page 4: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

4

Over 80 members from 22 countries

BroadcastersNetworks / regulators

Technology AutomotiveDevices /

equipment

Page 5: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

5

Policy makers and regulators

We work with players across the radio ecosystem

BroadcastersNetwork operators

Devices AutomotiveSilicon providers

Retailers

Page 6: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

6

Contents

1. Introduction to WorldDMB

2. Radio today

3. Business case

4. Critical success factors

Page 7: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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• Digital music services

• Smart devices

• Competition for FM radio

Online music services

For broadcasters, the competitive landscape is changing

Page 8: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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Changes in youth per capita listening hours, 2006-101

-27%

-17%-14% -13%

-9% -7% -7%

Sweden UK USA Italy Germany France Spain

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).

Younger audiences are listening less

Page 9: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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In many markets, FM spectrum is full – difficult to innovate

• Overloaded airwaves

• No capacity for new services

• Difficult to innovate

Page 10: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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A digital radio wave is moving across Europe

UK

Norway

Sweden

Germany

France

Spain

Italy

Switzerland

NL

Bel

Denmark

Poland

Czech

Austria

Ireland

Portugal

Slovenia

Slovakia

Hungary

Page 11: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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Four core markets: UK, Norway, Denmark and Switzerland

UK

Norway

Sweden

Germany

France

Spain

Italy

Switzerland

NL

Bel

Denmark

Poland

Czech

Austria

Ireland

Portugal

Slovenia

Slovakia

Hungary

Established markets

Page 12: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

12

Followed by Germany (2011) and Netherlands (2013)

UK

Norway

Sweden

Germany

France

Spain

Italy

Switzerland

NL

Bel

Denmark

Poland

Czech

Austria

Ireland

Portugal

Slovenia

Slovakia

Hungary

Established markets

Newmarkets

Page 13: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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Several potential markets

UK

Norway

Sweden

Germany

France

Spain

Italy

Switzerland

NL

Bel

Denmark

Poland

Czech

Austria

Ireland

Portugal

Slovenia

Slovakia

Hungary

Established markets

Newmarkets

Potentialmarkets

Page 14: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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Poland: first services on air

UK

Norway

Sweden

Germany

France

Spain

Italy

Switzerland

NL

Bel

Denmark

Poland

Czech

Austria

Ireland

Portugal

Slovenia

Slovakia

Hungary

Established markets

Newmarkets

Potentialmarkets

Poland?

Page 15: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

15

Annual cost of transmission1, $k

385

925

1645

68 98 128

Owned site Regional site Metro site

FM DAB+

Source: Harris BroadcastNote: (1) Opex costs; on DAB+, assumes 18 services on multiplex

DAB+ distribution costs about 10% of FM for a single service

-92%

-89%

-82%

Page 16: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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DAB / DAB+ radios now mass market

Prices from $29

Page 17: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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Power consumption of in-use devices, W

Source: DCMS / Intertek Technical Report, March 2013

Digital radios now consume 20% less power than FM devices

4.69

3.75

FM radio DAB radio

20% lower

Page 18: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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Automotive brands offering DAB – increasingly as standard

Page 19: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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Contents

1. Introduction to WorldDMB

2. Radio today

3. Business case

4. Critical success factors

Page 20: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

20

Increase audiences

Increaserevenues

Innovation

How can digital radio build value for broadcasters?

1 2

Page 21: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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Increase audiences

Increaserevenues

Innovation

How can digital radio build value for broadcasters?

1 2

Page 22: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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Sound quality ChoiceAdditionalfeatures

Benefits of DAB / DAB+

Benefits for listeners

Page 23: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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UK, % benefits of digital radio

65%59%

35%

24% 23%

Sound quality Wider choice Easy tuning Textinformation

Extra features

Source: Ofcom

Sound quality and choice are top two benefits

Page 24: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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UK Australia Germany

Electronic music

ClassicalDecade Country

Unsigned bandsClassic Rock

Specialist music services – for niche audiences

Page 25: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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Sport Drama & comedyScience

Specialist speech services – e.g. sports or archive

• Germany: live football

• Up to 5 matches simultaneously

• UK: archive from the BBC

• Germany: higher education for younger audiences

Page 26: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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Strong brands – key to success

Page 27: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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Energy on FM

Hamburg

Berlin

Nuremberg

Stuttgart Munich

Rhein-Main

Potential to extend geographic reach

Energy on DAB+

Page 28: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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Analogue and digital Digital-only services

Extend the brand portfolio

Page 29: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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Weekly listening hours, m

11.3 9.5 11.2 12.6 12.3

1.7 6.47.613.0

15.818.8

22.825.3

13.010.2

Q4 09 Q4 10 Q4 11 Q4 12 Q4 13

Absolute Radio (core service) Absolute digital-only services

Source: RAJAR

+95%

Absolute’s listening hours - up 95%

Page 30: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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5.86.7 6.7

9.2

9.2

Q1 10 Q3 10 Q1 11 Q3 11

Source: RAJAR

+37%

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

Page 31: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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Increase audiences

Increaserevenues

Innovation

How can digital radio build value for broadcasters?

1 2

Page 33: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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Branded stations take sponsorship to new level

• Branded channels – aimed at housewives target audience

Page 35: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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Sponsorship opportunities – music tour & digital radio station

Page 36: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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Sponsorship opportunities – music tour & digital radio station

Page 37: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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Colour screen devices create new opportunities

Revo Pixis

Page 38: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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Colour images for additional information

Page 39: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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Hybrid radios with Bluetooth connectivity – from €59

John Lewis Spectrum Duo

Page 40: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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• Hear new song on radio

• Hit button

- for info

- add to playlist

- share with friends

New song

Page 41: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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• Hear ad on radio / see visual display

• Tag to interact

- access more information

- register interest

Advertising

Page 42: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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Contents

1. Introduction to WorldDMB

2. Radio today

3. Business case

4. Critical success factors

Page 43: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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Policy and regulation

Critical success factors

Coverage Content Retailers CarsConsumer devices

Consumers

Page 44: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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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)

Page 45: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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Government

Network providers

Regulator

Commercial broadcasters

Public broadcasters

Coverage – work together to create cost-effective plan

• Start on major population centres

• Define strategy for major roads

Page 46: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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17 services on AM and FM Over 40 on DAB+

Digital content proposition must be stronger than FM

Sydney analogue services Sydney digital services

Page 47: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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Devices available from wide range of suppliers

Page 48: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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Retail activityConsumer marketing

• Consumer advertising encourages footfall and inspires confidence in retailers

• Retail (with the right product, point of sale and trained sales people) delivers sales

Marketing activities must be co-ordinated and sustained

Page 49: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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TV ads, heavy FM promotion and device give-aways

Source: BBC and Bayerische Rundfunk

Page 50: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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Devices available in-store

MediaMarkt, Berlin, March 2013

• Must have strong retail support for DAB+ radio

• Devices on shelves

• Training for staff

• Post-code checker

• Repeaters

Page 51: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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• Educate local importers and dealers

- consumer benefits

- coverage plans

- long term commitment to DAB+

• Work with international partners

Automotive – work with manufacturers to fit DAB+ as standard

Page 52: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

52

Policy makers and regulators

Industry stakeholder

body

Key to success is collaboration

BroadcastersNetwork operators

Devices Retailers Automotive Consumers

Page 53: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

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Thank you

For further information, please contact:

www.worlddab.org

Page 54: DAB+ business case and critical success factors Patrick Hannon Poznan: 10 th April 2014

54Source: CAP/SMMT

0%

10%

20%

30%

40%

50% Standard Cost Option

Q1 10 Q4 10 Q1 12 Q1 13 Q1 14

4%

10%

22%

35%

45%

In UK, 45% of new cars have DAB as standard