Private radio want transition subsidies and sales ban on FM receivers. Public service not onboard. Community radio: DAB is an outdated technology.
Because the market outlook for terrestrial digital radio in Austria is bad, private radio companies want drastic measures: The sale of non-digital radios should be banned, and DAB+ should be mandatory for all new cars. However, in a study released last week the Austrian regulator RTR gives little hope for a viable development of the digital radio market: In the currently existing framework there are no prerequisites for a profitable business case, according to the document.
Therefore, the private radio operators want to change the conditions radically. In addition, automakers will be forced to install in every new car with a DAB+ receiver. The private radio operators, also want much higher subsidies for a transition to DAB+. Also requirement for compulsory equipment of DAB+ in new mobile phones is discussed.
The commercial operators see the end of FM broadcast, but not too fast, because without the FM commercial stations immediately will go bankrupt.
There is enough interest now for the telecom authority to allocate frequencies already in the end of 2017. Overall, 19 broadcasters and four potential infrastructure operators have reported to be interest in a transition, but the public service corporation ORF is not. The economic risk is high and the Austrians is not waiting for digital radio. Surveys show that they are satisfied with the FM radio offer.
The study notes that Among technical and structural point of an FM broadcast network is more reliable use in crisis communication as a digital broadcast network.
For several years there have been DAB+ trials in Vienna. Yet, people continue to purchase only conventional FM receivers. The sales percentage for DAB receivers is not at this fifty percent, but at two percent.
The non-commercial private radio broadcasters are not keen for DAB+: Given the technical realities, the wireless terrestrial broadcasting of programs on DAB + a moribund, obsolete technology, says the community radio association Verband Freier Radios Österreich (VFRO) to heise onine. DAB+ is "economically completely nonsensical". And digital radio would not contribute to diversity of opinion neither better program quality. FM prohibitions and switch-offs would not drive the listeners to DAB+ rather to streaming and podcasts says VFRO.
The radio usage in Austria is high, but declining since 2002. The private radio stations sold in 2014 even nine percent less advertising airtime than in 2005. And as DAB+ will allow more radio programs, the advertising pie would be further divided. When introducing DAB+ Austrian radio broadcasters have to assume that it has no revenue in the market development phase in their real-case scenarios, the study notes, and even then it looks not good. In addition to the weak advertising demand is questionable whether Austrians want to pay subscriptions for extra radio channels.
At the same time the cost of most program providers would be significantly higher. You need both FM and DAB+ stations paying, and also investing in DAB+ additional services. In addition, a multi-year promotional expenses to make DAB + known. Considerable need for subsidies is the logical consequence. The taxpayer should have to put in millions for terminal, promotions, program production and the technical broadcasting.
The government via RTR will provide 2020 three million euros in prospect until 2020. But the private radio stations want this sum annually. The public service company ORF wants even 50 million euro per year, of which twelve million for the parallel transmission mode and the rest for "project-related costs". Without ORF DAB+ has no chance at all, so strong is its market dominance. With DAB+ ORF will introduce a whole range additional channels, but this will shrink the private radio market share even further.
The study has also looked abroad and noted that Switzerland and Norway are moving towards an FM switch-off. But noting that in the UK despite a nationwide distribution of a total of 300 digital programs broadcast decreed in 2015 only 54% of UK households have a DAB radio, after 20 years of operation. In Germany where DAB stands at ten percent with sharply declining growth rates DAB+ is again questioned. The state media authorities had indeed recently noted a growing acceptance for DAB+ and Internet Radio, but right now see no prospects of a FM switch-off.
Sweden has now given up plans for an FM exit. After 24 years of struggle for DAB/DAB + the transition plan was buried this year. Meanwhile, new FM stations will now be licensed in Sweden.
Considering the economics and also with public service and community radio not onboard there are frail prospects for a transition to DAB+ in Austria.
Download the report on transition to DAB+ in Austria:
Einführung von Digitalradioin Österreich - Rahmenbedingungen und Erfolgsvoraussetzungen
Report on broadcaster interest of digital radio in Austria:
Ergebnis der Interessenerhebung zur bundesweiten, lokalen und regionalen drahtlosen terrestrischen Verbreitung von Programmen über DAB+