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The end of DAB is nowhere near nigh?

Posted in Media, Digital, Latest reporters' blogs, Russell Parsons February 12th, 2008 by Russell Parsons

For years it was an often expressed mantra that the future of radio was digital audio broadcasting (DAB). It is easy to believe, with DAB radio sales on the up and radio groups; commercial and publicly funded alike, throwing money at the format like it was a nailed-on success story.

However, this morning’s announcement from GCap’s that it is closing two digital-only stations, Planet Rock and TheJazz, and selling its stake in national commercial digital radio operator Digital One to Arqiva, strikes a rather more portentous tone.

With the UK’s largest commercial radio company running to the hills, branding DAB as “not economically viable”, where does that leave the suddenly maligned format? An experiment which is proving burdensome and expensive when set against internet radio or a misunderstood medium that is growing in popularity quarter on quarter?

GCap seem to have taken a lead role in the harbingers of digital doom camp but it is not alone. A recent report by media and telecoms specialist Enders Analysis also struck a note of caution, stating the high cost of broadcasting transmission and slow growth in revenue had undermined confidence in DAB. Couple this with the closure of two national digital radio stations, Core and Oneword, and the future does not seem so bright.

The thing is the facts and figures belie GCap and friends’ negative outlook. DAB digital radio sales are on the up, a report by GfK showing that sakes of DAB radios were up 22 per cent in December to over half a million and fourth quarter Rajar data showed DAB now accounts for nearly ten per cent of all radio listening.

GCap has put its faith in broadband, along with FM, at the expense of DAB but that decision seems brave especially after fourth quarter Rajar’s revealed internet radio accounts for just fewer than two per cent of all radio listening at the moment.

SO, is GCap being impressively prescient, predicting the ultimate decline of DAB and the rise and rise of internet radio is there something else behind its decision?

I suspect there is a little of this foresight but there is a lot more short-term cost-cutting behind the decision. GCap, let us not forget has been underperforming of late, and a little belt-tightening will be welcomed by shareholders eager to see profits boosted, especially whilst the company is being eyed by Global Radio.

DAB is far from dead; indeed I would go as far as to say it is in rude health at the moment. Reports of its death have been greatly exaggerated.