Thursday 29 December 2016

A Third Hongkong DAB Broadcaster To Sign Off

Future for commercial digital radio looks bleak. Cannot match FM.
As we reported in August the Hong Kong Digital Broadcasting Corp. applied to return its DAB license to the government, citing “unsatisfactory” developments in the digital radio industry. According to the management the move was not due to immediate financial difficulties, but a lack of prospects in digital broadcasting and government policies that failed to help digital radio reach a wider audience, causing difficulties in attracting advertising. Now a third Hong Kong broadcaster gives up on DAB, as Metro Radio returned its DAB licence to the government, ending years of trying in vain to open up a new market – one that nobody really wanted – with little success according to South China Morning Post. 

Last year Phoenix U Radio closed its DAB venture. Left alone on the Hong Kong broadcasting scene with DAB is now the public broadcaster RTHK.

Luke Tsang Chee-wah is a veteran broadcasting professional who was with RTHK from 1978 to 2014 asks when the trigger will finally be pulled on this idea. The audience was small; advertising revenue was even smaller. He writes in South China Morning Post:

I am not sure if digital broadcasting should ever have started in Hong Kong at all. When I was working for RTHK in the 1990s, I attended an international conference on digital broadcasting in Europe.

Having gathered the latest information globally and analysed the trends, I came to the conclusion that it was not worth wasting resources to research digital broadcasting, and made this recommendation to management.

The reasons were plentiful. I don’t think there is any example of a success, while failures are everywhere, and for many reasons. Hardly any consumer would be prepared to spend up to HK$1,000 to listen to a new station, so there is simply no mass market. The rise of internet radio eliminates any advantage digital broadcasting might have, and it costs a fortune to build new radio transmitting towers to broadcast, writes Luke Tsang.
That puts Metro and RTHK in an awkward position, because the digital broadcasting market has shrunk to an embarrassing level. The huge investment the stations jointly made in building the radio transmitting tower may be totally wasted, while ongoing rent and maintenance costs run into hundreds of thousand dollars every month. With Phoenix U Radio and the largest participant DBC now gone, who can pay the bill?

Metro is a commercial station under Li Ka-shing’s group, and it needs to answer to shareholders. It does not make sense to run a radio service with a small audience and not much advertising income. For its management, the only rational decision is to close it down.

As for RTHK, it remains an embarrassing issue. Over a million dollars from the public purse are spent on digital broadcasting every month. It would make better sense if this money was used in more sensible channels of radio and television broadcasting. Indeed, the future of digital broadcasting is grim both from the government and commercial perspectives writes Luke Tsang. The only question is who will pull the trigger and when?

Chief Executive in Council approved termination of digital broadcasting licence of DBC October 15 and Metro Radio November 11, 2016.

Metro Radio continues broadcasting on FM 99,7 and 104 MHz and also on mediumwave 1044 kHz.

Also read
Hongkong DAB Broadcaster Can't Compete With FM - Signs Off (August 2016)
As another Hong Kong broadcaster gives up on digital radio, when will the trigger finally be pulled on this idea? (South China Morning Post)

China Goes For Its Own Digital Radio Standard