Sweden Switchover Seminar Stockholm

24 October 2013

Agenda

• Background to DRUK and UK Digital Radio - coverage - content - cars - communication• Government Digital Radio Action Plan• Radio switchover and timeline

Digital Radio UK

Composition:BBC and UK Commercial RadioCar and Radio ManufacturersWork with Government and Ofcom

Objectives:Accelerating the growth of digital radio Getting digital radio in cars Planning a future digital radio switchover

FMDAB

DAB+

DAB workingwith IP

Online/AppsRadioplayer

Digital Radio Multi-Platform Vision

Radio on TV

At the broadcasting level At the hybrid level (Radio DNS)

At the digital TV level(YouView)

At the online level(Radioplayer)

Background• Launch of Commercial National Digital Multiplex: 1999• Launch of BBC National Digital Services: 2002

• Digital Radio UK Established: December 2009• Digital Economy Act : April 2010• Digital Radio Action Plan: June 2010

• Radioplayer Launch : April 2011• Vehicle industry commit to fit digital radio: October 2011• Industry connected consumer campaign: December 2011• MoU for local DAB coverage funding: July 2012• Switchover decision and announcement: 16 Dec 2013

Expansion Of National/Local DAB Coverage

• National BBC DAB now 94%: building to 97% by end 2015

• Commercial national DAB now 90%

• Local DAB now 72%: expanding to 90%

• In the last 18 months coverage improved for 8.3 Million people

Strong DAB station line updigital digital-only

Foreign language stations

8

UK Radio In Robust Health

• Remarkable resilience in digital age• 91% of all adults listen • Radio share of audio 76%• Listening 50% BBC / 50% Commercial Radio Strong and strengthening radio brands

9

Radio: Second-Highest Time Spent

Multiple Devices And Options

UK Radio Online• Radioplayer: unique

industry collaboration• Common station radio

player and console • Available online ,

tablet and smartphones• Consistent advertising

opportunities • Opportunity to click and

buy

Digital listening update(Q2 2013 )

• Digital listening share now 37%, 16% up yr on yr• 52% of the population now tunes in via a digital

platform each week• 46% of the population now has a DAB set at home • Analogue listening in home less than 50%• 70% of digital listening is DAB • Listening on DAB 24% , up 18% yr on yr• Listening online/apps 6% , up 31% yr on yr• 15 -24 yr olds online / apps listening 15%

Digital stations show strong growth

• Top 9 digital stations are dual transmission

• BBC 6 Music the leading digital-only station with 1.8 million listeners

• Absolute 80s the leading commercial digital-only station with 1.2 million listeners

• Other digital only highlights - Planet Rock has 1.1 million listeners

Jazz FM has 758 ,000 listeners Capital Xtra launched in October

DIGITAL AUDIENCES (REACH): Q2 2013No. Station Digital Audience

('000s)Year on year

change

1 Radio 2 6,581 25.9%2 Radio 4 5,659 15.4%3 Radio 1 4,135 11.2%4 Radio 5 Live 3,063 8.9%5 Absolute Radio Network 3,000 17.4%6 Capital 2,692 30.8%7 Heart 2,404 14.0%8 Classic FM 2,149 12.3%9 Kiss 2,098 13.7%

10 BBC 6 Music 1,792 29.9%11 Magic UK 1,757 16.6%12 BBC Radio 4 Extra 1,565 9.5%13 talkSPORT 1,423 32.0%14 Planet Rock (inc Kerrang!) 1,140 N/A15 Smooth UK 1,126 8.4%16 Radio 1 Xtra 1,114 9.8%17 The Hits 984 10.1%18 5 Live Sports Extra 947 8.8%19 Smash Hits Radio 932 8.7%20 BBC World Service 911 15.0%

Most portable radios are DAB

Radio In Cars

• Primary listening• In-car is 20% of all listening• 41.5% of all new cars now have DAB/DAB+

digital radio as standard • 100% BMW, VW, Audi, Jaguar, Land Rover,

Mini, Lexus, Volvo • Majority of Ford and Toyota models• All cars can be converted

New cars with digital radio

End 2013 Approaching 50% of new cars

End of 201595%+ new cars

Sep 2013: 41.5% of cars now with digital radio as standard

2010 Q1

2010 Q2

2010 Q3

2010 Q4

2011 Q1

2011 Q2

2011 Q3

2011 Q4

2012 Q1

2012 Q2

2012 Q3

2012 Q4

2013 Q1

2013 Q2

2013 Q3

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% MVRIS

Manufacturer

2012 % Market Share

DAB % Standard - Current IDs

DAB % Optional - Current IDs

DAB % Not Covered - Current IDs

FORD 13.79% 76.97% 17.58% 5.45%VAUXHALL 11.36% 11.09% 30.47% 58.45%VOLKSWAGEN 8.96% 84.98% 14.57% 0.45%BMW 6.24% 99.28% 0.67% 0.05%AUDI 6.05% 70.60% 11.95% 17.45%NISSAN 5.18% 0.00% 0.00% 100.00%PEUGEOT 4.87% 20.78% 0.00% 79.22%MERCEDES-BENZ 4.49% 29.71% 61.86% 8.43%TOYOTA 4.14% 58.84% 0.00% 41.16%HYUNDAI 3.63% 0.00% 0.00% 100.00%CITROEN 3.60% 28.02% 1.45% 70.53%KIA 3.26% 0.00% 0.00% 100.00%HONDA 2.65% 26.42% 5.03% 68.55%SKODA 2.62% 36.91% 47.64% 15.45%MINI 2.51% 99.72% 0.00% 0.28%FIAT 2.44% 0.00% 15.08% 84.92%LAND ROVER 2.38% 100.00% 0.00% 0.00%RENAULT 1.99% 0.00% 0.00% 100.00%SEAT 1.90% 18.71% 18.71% 62.59%VOLVO 1.55% 55.10% 44.01% 0.89%

Conversion by 2020

Total parc 35m

Line fit 14.5m

Aftermarket 20m

Conversion: Focus on the aftermarket

Conversion SolutionsIntegrated adapters Fitted adapters

Radio app integrationSelf-fit adapters

Industry communications

• Cross-industry collaboration• Focus on digital radio• Heavyweight BBC and Commercial

Radio coordinated campaign led by Digital Radio UK

• Features D Love, the digital radio evangelist

• BBC TV, BBC Radio, Commercial Radio Retail

D Love Campaign

Communications Campaign• BBC TV, BBC Radio and commercial radio• D Love encourages digital radio lovers to share the love with their friends• Trails on Radio 1/2/3/4/5, over 100 commercial stations, and bespoke

station activity with BBC and commercial radio presenters

Car dealer communications

Government Digital Radio Action Plan

• Government Digital Radio Action Plan 2010• Government switchover announcement 2013• Government criteria:

- 50% digital listening- 90% local coverage

• Criteria to be achieved by end 2015

Chair: DCMS Chair: DRUK Chair: DRUK Chair: OFCOM

Government Digital Radio Action Plan

Government Decision 2013

Industry case for switchover • Government case for switchover:

– FM is full– Fairer access to broadcasters for spectrum– DAB expands consumer choice– Dual transmission unfair and inefficient– Digital is the future

• Broadcaster case for switchover: – Ends dual transmission– Enables roll out of DAB coverage– Ensures radio remains relevant– Digital is the future

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DAB penetration

Digital TV penetra-tion

Time

%

DAB household penetration : TV comparison DATE:TV Q4 2005Radio Q4 2015

IN-PRINCIPLE:TV Q3 2003Radio Q4 2013

SWITCHOVER:TV Q2 2008Radio Q3 2018

• DAB penetration until Q2 2013 = actuals, thereafter = projections• Assumes in-principle announcement Q4 2013, and date announcement Q4 2015 • Assumes switchover starts Q3 2018 (England)• DAB penetration in Q2 2013 is equivalent to DTV penetration in 2003 (46%)

2003/2013

2005/2015

2008/2018

• Platform for Government Announcement• 220 attendees registered to attend from:

• Broadcasters• Government and regulators• Retailers• Radio manufacturers• vehicle manufacturers

16 December: “Switchover’s on its way”

Government announcement

• A confirmation of radio’s digital future• Confirmation that switchover will definitely happen • Confirmation that timetable will be consumer-led

and that help will be available for those who need it• A confirmation that FM will be sustained and that

the future of local stations is secure• An announcement that national and local DAB

coverage will be expanded towards FM• Commitment to car conversion affordability• An announcement of a new national multiplex

Government car criteria announcement

“Before a switchover, we need to see significant progress on car conversion. All new cars will come with DAB as standard and we will ensure that converting your car is affordable, easy to do and that products are widely available”

Car conversion challenges• Having the right products available at a suitable price

• Ensuring products are widely available from a range of outlets and suppliers

• Outlets carrying out conversions are properly skilled and provide a good experience

• Ensure consumers understand what a switchover will mean, the benefits of digital radio and how and where to convert their car

• For industry, we need more new players in the market and to maximise the impact of 2013 announcement

Digital radio specification – DAB/DAB+

Certification Mark

Approved Product

Approved Adviser

Registered Installer

Certification Mark

Certification Mark

Future Outlook• UK Radio is in robust health • BBC / Commercial Radio

collaboration• Digital is the future of radio• Digital future is DAB and IP• Specification for UK digital radios:

DAB/DAB+• Importance of common technology

standards• Government decision 2013• Criteria achieved 2015• Switchover 2018 - 2020