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| The Tryvann Tower, Oslo. |
I travel a
fair amount and often speak to people about distribution related issues around
the world. In most countries the attitude is that it will be very
expensive to introduce digital radio via DAB+.
- Because
we already have an FM network, and building a new digital network is much more
expensive, they say.
They are
wrong. Why? Because they forget to take into account that it costs a lot of
money to run an FM network. You can build it, but it will not run for free. Far
from it. An FM network costs more to run than a DAB+ network, a lot more if you
want a selection of channels. FM needs one transmitter for every radio
station while one DAB+ transmitter can broadcast up to 20 radio stations.
A real life example
I will
exemplify, using figures from Norway, where FM will be switched off in
January 2017. Digital radio via DAB/DAB+ is already in place covering more than
80% of the population. By the end of 2014, DAB+ will cover more than 99.5% of
the population with almost 20 radio stations (only one radio station (NRK
P1) currently covers the same amount of people).
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| Table: See the comparisons year by year. |
Let us say
that to transmit NRKs radio stations on FM costs 1,000 USD a year (the real
figure is many thousand times higher). This gives one station (P1) to
99.5% of the people while P2 reaches 99% and P3 reaches 95%. Two additional radio
stations (NRK mP3 and NRK Always News) reach 30% of the
population and only those in the biggest cities.
population and only those in the biggest cities.
FM upgrades
needed if not phased out
Of course,
FM would need a total makeover if it were to be continued past 2016, and the
price would then increase to 1,400 USD per year from 2015. This is a cost that is almost always forgotten by those not in favour of digitalization.
DAB/DAB+
now
To transmit
up to 20 radio stations (NRK still has not decided exactly how many radio
stations they will offer) to 99.5% of the people will then cost 1,030 USD, only
3% more than FM now but with up to 300% more stations and all those stations to
everyone.
Do note that this is 36% cheaper than if staying on FM! And I repeat, with DAB everyone gets the same stations, and many more so than with FM. Much more democratic and much more friendly to those living in the countryside.
Double
distribution
Of course
you will also have to take into account double distribution, of both FM and
DAB/DAB+. The FM costs will be the same as mentioned above, although somewhat
reduced the last two years as it is being phased out, saving 1400 USD as opposed
to continuing with FM only. NRK currently has 15 radio stations that reaches
over 80% of the population via DAB (coverage increases monthly and will reach 90%
by the end of 2013 and 99.5% by the end of 2014).
To transmit
DAB in addition to FM costs 250 USD in 2012, 600 USD in 2013 and 870 USD in
2014 (before reaching 1,030 USD per year from 2015). This additional cost of
DAB for the five years of 2012, 2013, 204, 2015 and 2016 adds up to 3,780 USD.
NRK will however save 1,400 USD in the same period on FM as it is being phased
out. The real extra cost of double distribution for those five years is
therefore 2,380 USD.
As DAB
(1030 USD per year) is cheaper than an upgraded FM (1400 USD per year), NRK
will start paying less per year already in 2017, while the accumulated costs will be lower five and a half years later, in June 2022. With
a much more modern network with many more stations to everyone. And modern
radio that can handle parallel and additional services too. Both NRK and the
listeners win.
Governmental
reassurance is needed
Of course,
NRK could not gamble on increasing DAB coverage to 99.5% unless the
Norwegian government had actually decided to switch off FM in January 2017
(they decided to do so in May 2011). That decision made it possible for NRK to plan how to manage its
distribution costs in order to give a much better offering to its
audiences. Governments and broadcasters in other countries may find a useful
lesson in the Norwegian example.
Work together and save more
What if you do not need up to 20 radio stations? Well, work with someone and cut your costs in half or less! Again, with FM, you will need one transmitter for each station, with DAB+ you can have 20 stations per transmitter. If you need 10 stations, work with someone else on the technical distribution and save 50%. If you need fewer stations than that you can save even more. Work together on distribution and technical issues, compete on content. Your costs will go down, your margins will go up.
Note:
For this example's sake, a price of current FM distribution was set to 1,000 USD per year. All other figures can be seen in relation to this. They are based on NRK figures.
