Subscription-Radio only 5 Years Away

Ralph Bernard, the chairman of GCap Media, the commercial radio group formed from the merger of GWR and Capital Radio, has said that subscription-radio could only be 5 years away.

Ralph Bernard said that "the BBC has listeners who listen to it because they don't have commercials", and he also cites the success of subscription-radio in the United States where the XM and Sirius satellite digital radio systems have attracted 5.4 million listeners since they launched in 2001 and 2002, respectively.

Ralph Bernard is obviously ignoring the fact that BBC radio simply carries far better content, and the commercial radio industry doesn't help itself by broadcasting heaps of tripe. But then again Ralph Bernard isn't the BBC's biggest fan, because he's one of those individuals that is regularly quoted in the press saying that the BBC shouldn't be allowed to transmit popular programmes, because such programmes should be reserved for the commercial sector, as well as making other, similarly-motivated complaints, aimed at limiting what the BBC can do in order to improve revenues for the company he chairs so that he can buy another yacht.

Ralph Bernard is also one of the main people behind DAB in the UK, because he was chairman of GWR when they won the licence for, and rolled-out, the national DAB multiplex operator, Digital One, and GWR also went on to operate more local DAB multiplexes than any of the other commercial radio groups. Some might applaud him for such "vision", but he's also the chairman of the DRDB (Digital Radio Development Bureau -- partly-funded by BBC licence-fee money), whose remit would best be described as consistently lying to the general public about the audio quality on DAB, and Mr Bernard's protege, Nick Piggott, once admitted to me via email that "the broadcasters will do anything rather than increase the bit rates" (the emphasis was added by Nick Piggott), and "DAB will never be a hi-fi medium, so you might as well look elsewhere if that's what you're after", and who delighted in the fact that so long as the general public believe that the audio quality on DAB was better than on FM then it doesn't matter at all that the audio quality was actually worse!

However, although I obviously don't have a great deal of respect for a man that thinks that providing audio quality far worse than on FM is acceptable on digital radio, for once I do agree with him that subscription-radio is the best way forward for commercial radio, for two main reasons:

Listeners Hate Adverts

In what must have been a worrying result to the commercial radio industry -- whose income is mainly derived from adverts -- Ofcom undertook some market research, titled "The iPod Generation, Devices & Desires of the Next Generation of Radio Listeners", into what younger listeners like and dislike about radio, and the overwhelming response was that they detest adverts and will do anything to avoid them.

Let's face it, everybody hates radio adverts to a larger or lesser extent; what sane individual would listen to the radio primarily to listen to adverts?

Also, with emerging technologies like podcasts; the thousands of advert-free internet radio stations available (all of which will be available via ubiquitous, wireless broadband within the next decade) that provide higher audio quality than you get on DAB; TV appearing soon on our mobile phones, as well as established markets like computer games, bought or rented DVDs, and obviously multi-channel digital TV all vying for our time, the traditional advertising-revenue-led business model of commercial radio looks like it will be in terminal decline over the long-term.

Advertising-Revenue-Led Radio Only Offers Lowest Common Denominator Stations

For all the hype surrounding the choice available on DAB, when you actually look at what stations are available and the genres they cater for, the choice of genres on DAB is actually dreadful. There's winners and losers, of course, because if you like teenage pop music or rock music, then you'd be relatively well catered for. But if you want something away from the mainstream then you're very unlikely to find what you want on commercial radio on DAB. This is solely caused by the fact that niche genres don't attract large audiences, by definition, so they will never get a look-in on commercial radio while its main source of revenue is from adverts that require as many people listen as possible.

So, the obvious solution is to change to advert-free subscription-radio so that niche stations can be provided.

How Would They Provide Subscription-Radio?

The MediaGuardian article mentions that SES Global (who operate the Astra satellites that carry Sky Digital) is looking into launching a satellite to enable a European subscription radio system. More details of this can be found here, and such a satellite would transmit significantly higher power signals than the signals people receive on their Sky dishes so that reception is possible in cars. A problem with satellite signals is that they can only be received if the receiver has a line-of-sight path to the satellite, so there has to be a network of terrestrial repeater transmitters -- most of which are needed in urban areas, and this is the setup that both XM and Sirius use in the United States.

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