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Shutting Down AM

Today, Ofcom published a short consultation based on a request from Absolute Radio to shut down a number of AM transmitters and reduce the power on some others.

In essence the request, which I confidently expect to be quickly agreed to, has three main details:

So for a relatively small reduction in coverage, Bauer saves a lot of money for a service that is largely also available in one or more of DAB, FM, digital television or the internet in all the affected locations. I think it’s only fair to note that there are FM alternatives wherever the BBC is shutting down an AM station. But the point is still valid, especially with regards to music stations.

Bauer points out that the BBC has been shutting down a number of AM transmitters across its local radio network, and that AM music listening in particular is in massive decline.

This all seems eminently sensible to me. Indeed there’s a fairly incendiary line in Ofcom’s consultation:

“Absolute Radio has made these proposals in the context of declining listening to AM radio and increasing transmission costs and noted that, if it is not able to make these changes, it may have to consider shutting down Absolute Radio’s entire AM network and surrendering its national licence.” [My emphasis]

In the interest of full disclosure, I should say that when I was previously employed by Absolute Radio, I too looked very closely at the AM transmitter issue, and we were also very close to shutting down the AM network and handing back the national licence.

While that might seem dramatic, in reality the business is driven by digital and FM. At the time FM was only in London, but Bauer switched its West Midlands licence to FM as well. And it had always been in the interests of first Virgin and later Absolute to transition its listeners to DAB as quickly as possible.

For me, the larger question is whether the entire AM network shouldn’t be shut down, allowing Bauer to make savings of those other 50% of AM costs?

Lots of stations are on lots of platforms, but there is a cost to every additional platform a station goes on, and most stations will try to break down those costs to come up with some kind of cost per listener-hour by platform.
For the average local station, for example, FM is relatively cheap. In many cases it’s a single transmitter somewhere on a hill, and the kit and running costs are relatively. For any transmitter you also have to factor in electricity costs, and these are also relatively low for FM.

AM transmitters require vastly more power, and the costs can be significant. DAB is relatively cost efficient, but it usually requires more sites than FM, with the advantage that digital transmission lets you “fill in” gaps without causing interference. You can’t do that with AM or FM, hence secondary analogue transmitters have to be on different frequencies.

It’s not always easy to figure out those costs per listener-hour since RAJAR doesn’t break things down to quite a low enough level. For example, if you broadcast on both AM and FM, RAJAR can’t really differentiate beyond making assumptions using geography. Similarly, there are several TV platforms (Freeview, Freesat, Sky, Virgin Media etc), but RAJAR just reports “Digital Television” in general. If your favourite station isn’t on your preferred TV platform, it might well be because the station can’t really work out whether it’s worth going onto that platform.

Returning to AM, and Absolute in particular, there are some interesting things in the consultation document. The sites that are proposed to be closed are largely in rural areas, those close to FM coverage, or those with high DAB penetration. Obviously Bauer has done a fair bit of analysis to come up with this list.

They estimate that 19,000 current listeners on AM will lose access to the AM signal following these changes. A small cost in listeners compared to monetary savings.

Ofcom notes that this represents 4% of the total AM audience of 472,000. But I think that Ofcom’s figure is slightly misleading, and it’s to do with the way that RAJAR is measured.

I would hypothesise that the actual number of AM listeners is much lower than this for a few reasons:

When you take into account all of that, I think you could substantially reduce the number of true AM listeners that Ofcom suggests Absolute has. Indeed it’s notable that Bauer doesn’t make this claim itself.

That’s not to say that these closures and reductions won’t have any affect. In rural areas, particularly those with lots of hills, AM (and LW) signals are about the only ones that get through. While the DAB has been built out to reach a large part of the population, there are still pockets with either only the BBC DAB multiplex or perhaps no DAB coverage at all. While satellite TV can fill in the gap at home, that’s not much use if you’re in a vehicle – especially one without DAB.

So turning off the AM network entirely would lose some listeners. But I suspect that it’s far fewer than the RAJAR numbers Ofcom suggests.

Finally, if Absolute was to hand back its AM licence, what would that mean? Well probably not a great deal for the station. It would continue on DAB and all the other platforms. It wouldn’t affect its FM listening in London or the West Midlands. Those are entirely separate licences.

But I believe that Ofcom would have to re-advertise the licence. I think primary legislation would require them to, whether or not they really wanted to. And I suspect that there would be a taker or two. The most obvious would be a Christian station – they often crowdfund their running costs. But there are others who would have a look.

This wouldn’t be a cheap option. Those electricity costs alone are significant. And it’s true that having that licence does allow the owner to get onto the D1 national DAB multiplex. That might be problematical in itself, since the mux is basically full!

And then there are the kit costs. One of the reasons Bauer gives for shutting down many of these transmitters is that the transmission kit is now very old. It dates from BBC ownership prior to the launch of independent national commercial radio, when those frequencies belonged to Radio 3. Replacing that kit is going to cost money, and it seems like an odd investment to be making in 2018.

By the way, have you actually tried to buy an AM radio recently? It’s not that easy…

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