Written by Radio

D2 Bids: Further Thoughts

[Note: Updated following the publication of the detailed bid documents on the Ofcom website. Note that only parts of the applications have been made public. Other parts are confidential.

Sound Digital application hereListen2Digital application here.]

At a risk of boring everyone senseless about D2, I’ve got a few further thoughts that have come out of events and discussions since the big reveal yesterday:

  • Sound Digital is making a very big play of the fact that they have signed undertakings to ensure that, in the event that they win the licence, Bauer, UTV and Arqiva are financially on the hook for the full 12 years of their licence regardless of anything else. This provides Ofcom with certainty. Listen2Digital will need to similarly present a financial solid case.
  • Listen2Digital’s key point of difference is that it provides more choice in multiplex operator. i.e. Arqiva isn’t part of it. The question is whether or not Ofcom will take this into consideration.
  • Talkbusiness (I know UTV would prefer talkBUSINESS, but I capitalise proper nouns the correct way. It’s Easyjet as well on this blog!) has agreements with both Bloomberg and The Economist. Obviously there is currently Share Radio, available in London on DAB and part of Listen2Digital’s bid. And in the past there has been a Bloomberg radio service which was shut down (a US focused internet service lives on). This is a specialist area, and I suspect that it will be very hard to get ratings via RAJAR. I note that CNBC pulled out of BARB quite a few years ago.
  • I’m still unclear how Talksport 2 will fill all its hours. I’m sure that the radio rights for lower profile sports could be picked up relatively inexpensively, but there’s still a production cost. In a promotional video sports listed included rugby, cricket, F1, athletics and cycling. I wonder if horse racing is an interesting area with its obvious links with betting? (I’m not sure going exclusively with Channel 4 has worked well for the sport). Picking up radio rights to something like the IPL might be interesting though. Having two services could allow them to try interesting things with some of their commentaries though. If you had rights to, say, the Merseyside derby, could you put a Liverpool-skewed commentary on service and an Everton-skewed commentary on the other? To be fair, this sort of thing happens quite a lot in local radio where two local stations are broadcasting the same match for their respective supporters. And Absolute Radio, in the past, broadcast a comedy commentary for England rights that they had. The BBC has done the same with Chris Moyles and even a kids’ commentary.
  • Virgin Radio is going to target 25-44 year olds. Which is essentially the same target it had before. And is the same target that Absolute Radio has. I still see this as a direct competitor which makes things a bit strange, and perhaps uncomfortable in the bid meetings. We are promised some big names, although none have been proffered. The obvious radio personality currently without a berth is Chris Moyles. But prior to Bauer buying Absolute Radio there were rumours of a bid featuring Jonathan Ross going back to radio as well. But names like these aren’t cheap, and that’d be making a massive bet. It’s fair to say that most new digital-only music services rely heavily on pre-recorded voice links and generally cheaper talent. [See also the Updated section below]
  • Talkradio has an agreement with Comedy Central. How that will fit in will be interesting. Comedy has a strong radio heritage, but nobody really offers pure comedy for extended periods. Half hour shows are dropped in after the news. Presenters with comic chops still use lots of music in their shows. Anyway, it’ll be interesting to see what they do.
  • It does sound like there is still room on Sound Digital for some extra services. Their DAB+ slot has not been announced, and I’m not sure they’ve actually got a station lined up. And there could be more than one DAB+ service. They’re keeping their powder dry on this one. I still think that consumers will need quite a compelling option to actually replace older DAB radios with DAB+ capable models. But then as I’ve mentioned before, I think getting a really good handle on how many DAB+ sets are being used is really hard to do. Having at least one live service means that a mux owner could conduct extensive research to see who is able to hear it, using those findings to determine whether or not to later shift services from DAB to DAB+. Publicly at least, nobody has talked about making that transition over time, but it has to remain an option.
  • There is a significant difference in what each bid is offering in terms of coverage and a lot of people are confused about how Listen2Digital can have fewer transmitters but better coverage. Well I don’t know, but they’re not using all the same places. Fuller bid documents will be released later next week, and they may go some way to explaining that.
  • The more I think it about, the more dangerous it is that Bauer is proposing to move Absolute 80s from D1 to D2. I said prior to the announcement that I thought it’d be Absolute Radio 90s that’d make a reappearance nationally. Absolute 80s is a station with 1.4m reach and 6.8m hours. Not to be sniffed at. Yet the DAB coverage will be significantly worse, and that means listening will fall. Not everyone currently listening on DAB can be easily shifted to internet apps. On the other hand, it does provide a big draw for the bid.
  • Neither bid is making any commitment to extend their coverage beyond what they are saying in their bid documents. They could expand coverage, but it’ll be down to any agreements they have with their service providers, since each extra transmitter will end up costing service providers extra money.
  • Both groups have presented Ofcom with some comprehensive research backing up their bids and explaining why audience are interested in their offerings. Some of this research should become available next week on the Ofcom website, although some will remain confidential.
  • The new Magic spin-off station is definitely called “Magic Mellow” even though the programme strand it comes from is “Mellow Magic.” I think that’ll take quite a while for fans to adapt to!
  • I think a lot of people find the idea of a food radio station interesting. It’s easy to poo-poo the idea, but I was pointed towards Chef Radio by a commenter, and it’s worth noting that an awful lot of radio listening happens in the kitchen. Trying new formats is only to be encouraged.
  • If I’m honest, I’m disappointed that nobody is holding a space open for pop-up radio. I can think of all sorts of use cases, and commercially it could be a really interesting proposition. There are issues with the ease of getting new services on and off quickly with regard to the regulator, but Smooth Extra rebranding back to Smooth Christmas for a month isn’t really enough. Listen2Digital has the closest service to this with their Upload service which itself is interesting as I mentioned previously. But I’d love to see a permanent space carved out for pop-up services.
  • Anyone else notice that Global Radio, the UK’s biggest commercial radio group, isn’t anywhere in any of these groups (unless they’re a confidential supplier)? They have promised at least one further service on D1 though.
  • And perhaps less surprising, there’s nothing from the BBC. Last time around in 2007, BBC Asian Network was going to be on the NGW bid. Of course today there’s a tougher licence fee settlement and there’s the prospect of BBC Three going online only to save money, so the idea that the BBC might launch a new linear radio station is unlikely. Even though it could free up some space by moving a current channel over, you run into issues about reduced coverage. And with their Olympics, Eurovision and upcoming Country pop-ups, it has shown it can shift its “bits” around to accommodate services as need be (at a cost to stations like Radio 3 and Radio 4).
  • Finally, it’s worth noting that just because these stations are the ones that have gone in the bids, it doesn’t mean that things won’t change between now and launch. Come back in a year or so’s time to compare and contrast.

[Additional thoughts, post publication of the bid documents]

  • Stereo? What is this stereo you’re talking about? None of the regular DAB services offered by either Sound Digital or Listen2Digital will be stereo. Every service on Sound Digital will be mono – 64k mono for speech services, and 80k mono for music services. With Listen2Digital, they’re promising stereo for their four DAB+ services. Their regular DAB services will likewise mostly be in 80k mono for music, and 64k mono for speech. Notably a couple of the services – the sports service and Share Radio – will be in 48k mono. No current national service is broadcasting in this format, although previously Traffic Radio used it. Expect quality closer to AM for these.
  • DAB+ mono? Well that’s what Sound Digital are saying. Noticeably, they’re using fewer CUs for their DAB+ service that Listen2Digital is suggesting. That limits them to a mono service. Like DAB, DAB+ is only as good as the bit-rate you give it.
  • There’s still space for services on Sound Digital as I hypothesised above. Every DAB multiplex is divided into 864 “capacity units” (or CUs). You can allocate these as you need, which in turn determines your audio bitrate (and error correction level). As it stands, Listen2Digital is essentially full, with just 8 spare units – which could only be used for data purposes. Whereas Sound Digital has 98 spare units, which could accommodate, say, two speech services (64k mono), or one music service (80k mono) and a DAB+ service (mono or stereo).
  • Listen2Digital says that for the services it has not named, there may be either a confidentiality clause preventing them from naming the service at this time, or they may not have a service lined up or, “to
    allow third-parties who may be currently constrained from working with us to be able to come forward in due course.” They would advertise for such services on winning the bid.
  • Only Listen2Digital has allocated space for an EPG. Sound Digital has no plans “at this time.” Few radios in the market currently use EPGs because they have mostly only been furnished with relatively small LED screens. Devices like the Pure Sensia have been few and far between – with colour screens that could show either Slideshow imagery, or pull other information from via IP. As Listen2Digital note, with expanded choice, it does become harder for listeners to navigate between services. (I retuned a DAB radio at home recently, and ended up with 79 services across national, London, and nearby local mulitplexes – I live on a hill). I would hope that in future more devices (not “radios”, but multi-functional “devices” that have radio tuners embedded) will have bigger screens, so an EPG makes sense. As noted above, Sound Digital has the capacity to include one, they’ve just chosen not to at the moment.
  • Sound Digital includes a table (Table 11.5) that details potentially overlapping stations for each of its proposed services. Curiously, the potentially overlapping services for Virgin Radio are Team Rock, Planet Rock, Absolute 80s, Absolute Radio 90s, Kiss, and Capital Xtra. Spot the missing station? The main Absolute Radio service isn’t mentioned. If Virgin Radio is going to overlap with all those other services – suggesting a fairly varied mix of rock and pop, then surely it must also overlap with Absolute Radio? “The all new Virgin Radio will play a range of the best rock and pop music from the 1980s to the present day, appealing particularly to those aged 25-
    44 and with a clearly defined slight bias towards male listeners. Programming will be carefully tailored to what this target audience wants to hear.” That all sounds familiar to me…
  • Talksport 2’s programming will include additional sports coverage for which rights would probably be cheap to acquire, and reruns of popular Talksport shows. Interestingly it also says: “It is expected that this will include independently produced content.” I wonder if this might include broadcast opportunities for, say, popular football podcasts? An interesting thought. And it will also work with William Hill who provide internet audio streams for horse racing and darts coverage. Again a good way to fill the station.
  • For both Planet Rock and Absolute 80s, Bauer is promising to write to Ofcom with the rationale behind moving them over from D1. Beyond that, there’s no public explanation.
  • Sound Digital says that it will formally advertise its DAB+ spot subject to winning the award. However a service could jump in and do a deal with them in the meantime. They say that they’re looking for a service that will drive uptake of DAB+ sets. If the advertisement doesn’t get the desired result, then the consortium will create a new service themselves.
  • Sound Digital includes some really interesting research from Mediatique, commissioned by Arqiva, to determine how many DAB+ sets are currently in the market. This report claims that by the end of 2013, 2.9m sets were DAB+ compatible out of a total of 20m sets in the market – 14.5%. Further, by the end of 2020, the majority of radios in car and home will be DAB+. Unsurprisingly, their work also found that DAB+ stations would need to be “highly appealing” to accelerate DAB+ ownership. (Unfortunately, the full research document doesn’t appear on Ofcom’s website as it’s probably considered to be a confidential part of the bid.)
  • Both Listen2Digital and Sound Digital are effectively subsidising DAB+ capacity at launch. However Listen2Digital is offering substantially more space at the start – six times as much space.
  • Both bids will use the same error protection level (3) for their services. You can get more error protection, but that uses up more space. You can also get lower error protection, but that makes signal break-up likelier. Both groups have taken the middle ground on this – which is what most multiplexes do.

As to which of these bids will win? Well the safe option is Sound Digital – whatever your personal choice, they’re the consortium with two big broadcasters and the tried and tested transmission supplier. But what will Ofcom do? I did have a quick look over at the “special bets” on Betfair, but it seems that there’s not sufficient demand for a betting market on who wins the D2 licence.

Read my initial thoughts on Listen2Digital and Sound Digital.

Disclaimer: These are my personal views, and don’t represent those of my current or past employers. Probably not any future ones either!