Digital technology is set to have the same dramatic impact on radio as in the world of TV.
Quentin Howard (pictured below), chief executive of Digital One, is convinced that the technology will bring a host of opportunities for radio stations to expand and enhance their brands and content. It will bring greater interactivity and targeting potential to advertisers as well as offering consumers all the portability of analogue radio, packaged with much greater functionality.
“Secondary platforms like satellite and web-based radio are obviously restricted by their lack of portability,” he says. “I get tired of the web radio argument because at the end of the day you can’t take your PC into the shower with you. But then each different medium has its own distinct appeal.”
The technology race
The usual suspects crop up when you look to the manufacturers, but they will be key to the speed with which digital takes a hold. A range of digital receivers are currently on the market from the likes of Grundig, Sony, Technics and Videologic.
One unusual name which has just launched a product into the UK market is Psion, better known for its palmtop devices. The WaveFinder (pictured above) is an interactive digital radio, which picks up wireless digital radio signals (both audio and visual), and sends them direct to the PC. Launched last month, it takes another step towards mass affordability (at £299) and is a telling sign of what digital technology is capable of.
“The broadband broadcasting capabilities of digital radio mean there’ll be partnering with mobile phone operators,” says Howard. “Put all that functionality into one box – carrying images in a few years as well – and you have a very compelling argument.”
Geoff Kell (pictured right), UK commercial director for Psion Infomedia agrees. “In many ways it’s because it’s early days that we wanted to get into this marketplace,” he says. “While the medium has been around for some time, we can see the opportunities inherent in creating that truly mobile space. And the data capabilities, not just the enhanced audio, are very complementary with next-generation mobile technology.”
Howard has a clear argument in favour of the potential hybridisation digital radio offers. “No mobile phone operator is going to be able to charge users to listen to Terry Wogan on their mobile. Consumers won’t accept it and it would eat up valuable bandwidth. It would cost the phone companies about £40 million to deliver an hour of Wogan to their users. It costs £75 to deliver an hour of Wogan to as many people as required with digital.”
Having said that, no-one developing digital radio expects long term listening across mobile phones. Rather than being a constant companion, the technology will allow for a range of on-demand services.
“Fast forward to 2006 and by that stage mobile video phones will be streaming images,” says Kell. “Consumers following the World Cup will expect to be updated with scores but also see the goals and action. And say half a million people want that information, even the UMTS system will grind to a halt. But if they broadcast the service digitally they won’t run out of bandwidth.”
The radio industry is certainly embracing the technology and is eager to explore its potential. In October the industry launched the Digital Radio Development Bureau specifically to promote the new medium.
Commercial Radio Companies Association chief executive Paul Brown is acting as temporary chief executive of the DRDB. The body will work with manufacturers and have the support of media owners and hopefully advertisers to create a framework for the further development of the medium.
And late last month the Radio Advertising Bureau launched RAB-eye, an initiative designed to create an authoritative think tank on the future of radio, and become a first port of call for information on digital technologies in radio.
The medium is certainly moving quickly and forcing media planners and clients to examine the advertising potential of radio in a clear new light.
“Digital radio is attractive because you can put information like numbers and URLs on screen, which gets away from the standard ad’s need to repeat them,” says Digital One’s Howard. “Alongside that the next generation of radio could have the potential to store data like ads and programmes”. Driving past a supermarket you could be alerted to in-store offers through a digital radio with storage capacity and a GPS unit which registers your location.
The medium could deliver the same sort of highly targeted interaction currently being trialled with SMS on existing mobile telephony technology, but Howard insists that radio is simply a far more friendly medium.
Psion is also working hard on the future of digital radio. Partnered with UBC Media, which earlier this year floated on the AIM, raising £5 million for investment in digital radio, Psion is developing digital content.
And the WaveFinder’s connection through a PC hybridises the two main bets for the future of radio to create something new already. “We’re very excited by the click-through radio feature on the WaveFinder,” says Kell. “In future we could use the back channels of internet connection to provide highly targeted ads to generate instant response and allow instant changes to campaigns.”
The right pace
But Kell is keen to point out that the job is to find how the technology can help radio, not radically alter it. “Radio is a great passive medium, but it can be remarkably active,” he says. “We’re not talking about relearning the experience – we’re talking about enhancing it.”
And the message on regulation is similarly relaxed. You’d be hard pressed to find anyone who is pushing digital radio forward who favours a regulatory body established for the medium.
“I think we’re well set at the moment,” says Howard. “I think it’s right that licence holders, who are clearly the experts, decide the balance on issues of context. And with the up-coming Communications White Paper, I think it would be strange for analogue to be penalised with more regulation. The days of heavy-handed regulation are definitely gone.
While the future of digital radio is clearly bright, Quentin Howard at Digital One does have one Christmas wish, which could make it even brighter even quicker. “The medium provides for clever, tactical campaigns, and we need to work with planners and buyers now to establish what they want and need,” he says. “But we also do need the Government to provide an indication of the analogue switch-off date. It may not want to say a date, but it could specify the conditions under which switch off would occur. It’s happened in Germany and made a massive difference to the manufacturers.”